Water
Investing across the fast-growing water value chain
The opportunity
Global water resources are increasingly coming under strain from the long-term effects of climate change such as prolonged droughts and extreme weather patterns, but also from overconsumption, wide-spread pollution, aging water infrastructure, and the growing demands on water resources from new industries, notably technology.
Take, for example, the semiconductor industry: an average chip production facility can use about 10 million gallons of ‘ultrapure’ fresh water per day, the equivalent daily water usage of 33,000 US households.¹ At a global level, total water consumption by the semiconductor industry is estimated to be comparable to that of a city with a population of approximately 7.5 million people. These amounts are expected to more than double from 2024 to 2028.²
Addressing these challenges will require significant capital investment in innovative technologies, products and services, in addition to greater policy support from regulators and governments. This, we believe, could support companies with high exposure to the evolving landscape of the global water value chain, offering long-term growth opportunities for investors.
Strategy highlights
Actively investing in environmental solutions³
Our water strategy offers a focused exposure to a diverse set of long-term growth opportunities across the water theme. The strategy primarily targets companies tackling global water and water-related challenges in areas such as water infrastructure, treatment and efficiency, and utilities.
Exposure to global water value chain
Selectively invested across regions⁴, end-markets and sectors, the strategy provides investors with a broadly diversified exposure to the fast-developing water value chain. This approach allows the investment team to construct a balanced portfolio containing both defensive and cyclical stocks, often with high exposure to fast-growing mid-cap stocks.
High-conviction portfolio
The investment team maintains a high-conviction, concentrated equity portfolio of carefully selected water theme-related names, with a high active share.⁵ It combines a top-down macro and theme-specific perspective⁶, with disciplined fundamental bottom-up analysis ‒ which integrates ESG⁷ factors ‒ to identify tangible solutions with attractive long-term growth prospects while seeking to make an environmental contribution.⁸
Sustainability
Our water strategy demonstrates portfolio exposure to selected United Nations Sustainable Development Goals⁹, including 6, 9 and 12.
The strategy invests at least 75% of its assets in global companies that conduct a significant part of their business in water and/or related sectors, including (but not limited to) water infrastructures (network, buildings, and industry equipment, infrastructure services and irrigation), water treatment (filtration, traditional treatment, efficiency, testing and monitoring) and utilities.
For illustrative purposes only. The use of the SDG logo, including the icons, does not imply the endorsement by the United Nations of BNP Paribas Asset Management, its products or services, or of its planned activities and does not constitute, explicitly or implicitly, a recommendation for an investment strategy. Trademark, copyright, and other intellectual property rights are and remain the property of their respective owners.
Team and expertise
Our water strategy is actively managed by our long-term partner Impax Asset Management since its inception (December 2008), with industry veterans Justin Winter and Harry Boyle serving as co-portfolio managers, both with deep sector knowledge. Justin has 22 years of industry experience, specialising in all-things water, environmental markets, and sustainable infrastructure across the industrials, utilities, and materials sectors. Meanwhile, Harry has 20 years of industry experience, primarily focusing on regulated energy, power, and carbon markets as well as infrastructure companies.¹⁰
Impax Asset Management is an award-winning, long-standing investor in environmental markets that has pioneered investment in the transition towards a more sustainable global economy, with offices across the globe. Their investment teams are supported by the firm’s Portfolio Management and Research Analysts team, with over 18 years average industry experience and extensive sector, regional and thematic expertise¹¹, its Quantitative Research Group and Impax’s dedicated Sustainability Centre, with a team average 14 years of industry experience.¹²
Investment risks
Investments are subject to market fluctuations and other risks inherent to investing in securities. The value of investments and the income they generate may rise or fall and it is possible that investors may not recover their initial investment. The strategy may be exposed to specific risks including Concentration Risk, Emerging Markets Risk, Extra-Financial Criteria Investment Risk, Equity Risk, Liquidity Risk, Risks related to investments in some countries, Small Cap, Specialised or Restricted Sectors Risk.
The strategy may also be exposed to specific risks related to investments in Mainland China, including changes in PRC taxation risk, and risks related to Stock Connect.
For a complete description and definition of the strategy’s generic and specific risks, please refer to the Prospectus and KID.
[1] The water challenge for semiconductor manufacturing: What needs to be done?, World Economic Forum, 19 July 2024
[2] Nature-related Issues in the Technology Sector. Dependence on water by the semiconductor and data centre industries. TNFD, 2026.
[3] Environmental contribution measurement and reporting is undertaken to provide post-investment evidence of the intention to help accelerate the transition to a more sustainable economy. Sustainable investment is defined as an investment in an economic activity that contributes to an environmental or social objective, provided that it does not cause significant harm to any of those objectives and that the beneficiary companies apply good governance practices.
[4] The sub-fund may be exposed to emerging markets (maximum 30% of its assets) including China
[5] Active share: Active share measures the percentage of stock holdings in a given portfolio that differs from the stocks held in the reference benchmark index.
[6] Investments are made in companies which have ≥20% of their underlying revenue generated by sales of products or services in environmental markets. These internal guidelines are mentioned for your information only and are subject to change. Prospectus and KID are leading.
[7] ESG: Environmental, Social and Governance. ESG analysis based on Impax’s proprietary ESG methodology.
[8] Following the new Sustainable Finance Disclosure Regulation (SFDR) that came into force on 10 March 2021, our water strategy is categorised under Article 9. Under this new regulation, financial entities such as BNP Paribas Asset Management that sell products in the EU are required to classify the products they manufacture or advise on into three categories: Article 9: products with a sustainable investment objective / Article 8: products promoting environmental or social characteristics / Article 6: non-sustainable products.
[9] Impax’s investment process does not identify alignment with United Nations Sustainable Development Goals (SDGs) as a specific objective. Instead, the nature of Impax’s investment philosophy may result in meaningful revenue exposure to some UN SDGs. The UN SDGs encompass 17 goals. For further information, please visit http://www.un.org/sustainabledevelopment/sustainable-development-goals.
[10,11,12] Impax Asset Management. Years of experience calculated as of 31 December 2025.
Important information
Marketing communication. For professional investors only.
Past performance or achievement is not indicative of current or future performance. Performance is calculated net of fees unless otherwise stated.
Any views expressed here are those of the author as of the date of publication, based on available information, and subject to change without notice. This material does not constitute investment advice.
Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial investment. There is no guarantee that the performance objective will be achieved.
Fixed income sub-funds may be exposed to other risks defined below:
CAPITAL LOSS RISK: The value of the investments in Financial Instrument(s) and the returns generated by the described funds may go down as well as up. Investors may not get back the amount they originally invested.
INTEREST RATE RISK: The value of an investment may be affected by interest rate fluctuations. Interest rates may be influenced by several elements or events, such as monetary policy, the discount rate, inflation, etc.
CREDIT RISK: This is the risk that may derive from the rating downgrade of a bond issuer to which the sub-funds are exposed, which may therefore cause the value of the investments to go down. Sub-funds investing in high-yield bonds present a higher than average risk due to the greater fluctuation of their currency or the quality of the issuer.
COUNTERPARTY RISK: This risk relates to the quality or the default of the counterparty with which the Management Company negotiates, in particular involving payment for/delivery of financial instruments and the signing of agreements involving forward financial instruments. This risk is associated with the ability of the counterparty to fulfil its commitments (for example: payment, delivery and reimbursement). This risk also relates to efficient portfolio management techniques and instruments. If counterparty does not live up to its contractual obligations, it may affect investor returns.
MMFs ARE NOT GUARANTEED INVESTMENTS. An investment in MMFs is different from an investment in deposits, there is a risk that the principal invested in an MMF is capable of fluctuation. The MMF does not rely on external support for guaranteeing the liquidity of the MMF or stabilising the NAV per unit or share. The risk of loss of the principal is to be borne by the investor.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) INVESTMENT RISK: The lack of common or harmonized definitions and labels integrating ESG and sustainability criteria at EU level may result in different approaches by managers when setting ESG objectives. This also means that it may be difficult to compare strategies integrating ESG and sustainability criteria to the extent that the selection and weightings applied to select investments may be based on metrics that may share the same name but have different underlying meanings. In evaluating a security based on the ESG and sustainability criteria, the Investment Manager may also use data sources provided by external ESG research providers. Given the evolving nature of ESG, these data sources may for the time being be incomplete, inaccurate or unavailable. Applying responsible business conduct standards in the investment process may lead to the exclusion of securities of certain issuers. Consequently, the Sub-Fund’s performance may at times be better or worse than the performance of relatable funds that do not apply such standards.
This is not an exhaustive list of risks. For a full description of risks associated with each fund, please consult a client relationship manager or the global BNP Paribas Asset Management website: www.bnpparibas-am.com.