The question of whether managers should be prioritising innovation in water-focused impact strategies sparked disagreement among panellists at the Impact Investor Global Summit this week.
On the one hand, some panellists took the view that technology is of limited use in delivering water projects. “The important thing is that solutions exist,” said Josh Pickford, director at Sciens Capital Management. There is “no new technology needed. Solutions are out there. It’s just putting them in the right place.”
Sciens makes majority investments in US water infrastructure. Its Water Opportunities Fund closed in June last year.
“There’s an abundance of water, there’s no technical innovation required,” agreed Resonance Asset Management CEO Nick Wood. Resonance’s $320 million industrial water infrastructure fund closed in 2016 and invests in “outsourced industrial water treatment, waste to energy, and resource recovery infrastructure projects”, according to the firm’s website.
“We just need energy and money to treat water [and] to provide abundant water… it just needs energy and money to do it. The technology is already there,” Wood added.
Fellow panellist David Henderson had a different view. XPV Water Partners, where Henderson is managing partner, invests in high-growth companies that improve water resources, including a number of technology companies. He described the water sector as “one of the most innovative sectors on the planet” and cited developments around AI and machine learning in utilities as an example.
“It’s a great place to invest,” Henderson said. “We’ve been doing this for over 15 years and I would say this is the best environment we’ve ever seen in terms of putting money to work in water.”
Wood did acknowledge that there was a role for innovation, and that it can provide “incremental improvements” to operational efficiency. However, he said: “It’s not essential that [technology] improves incrementally… there’s already very good filtration systems. Yes, they can use less energy. Yes, they could involve less harmful materials in their process or lower chemicals, those sorts of things. But actually solving the problem we can do with today’s technology.”
This article has been updated to show that Sciens Capital Management closed its Water Opportunities Fund in June last year.