Blue Market. Blue gold undervalued on world markets

Blue Market

Water is the most precious natural resource, without which there would be no life on Earth. It also plays a key role in the development of strategic industries, namely agriculture, energy and industry. Over the past 100 years, consumption of global water resources has increased sixfold, and forecasts for the coming decades are ruthless and pessimistic. Population growth (according to UN projections, we will reach 9.8 billion in 2050) and the associated development of agri-food production (20-30% higher by 2050), intensifying climate change and natural disasters will cause the world to face a water crisis, threatening the entire Earth’s population. Water will become a luxury good. Not only people in Africa, but also citizens of European Union countries, people in the Middle East, Australia and the west coast of the United States already know about it. The global water crisis will reach people of all social strata and slow down the development of most countries. In response to these pessimistic forecasts in March this year. was organized in New York, the largest since the 1970s. In the 1970s. UN International Water Conference. The axis of the discussion of specialists from around the world was issues related to water as a resource essential to the survival of our civilization and its protection in the spirit of the Sustainable Development Goals.

Blue Market – a growing sector

Public awareness of what a valuable resource clean drinking water is is growing every year. Access to it is a guarantee of population health and economic development. The water industry and its related branches today make up the ever-growing Blue Market sector. It is water that is the focus of its interest, research and development and investment activities. More and more players from various industries are also recognizing the opportunity to engage in water marketing businesses. However, this is not only about water rights, but also infrastructure and technologies related to resource conservation and treatment. Financial markets are also adjusting to the challenges of the already observed global water shortage. The sector has developed a range of financial instruments in the form of water indices, ETFs and water futures. They provide investors with the opportunity to both hedge against the risks of water scarcity and participate in the long-term growth in the value of water management-related companies.

Water indices – the investment future

Water indexes are tools that track the performance of selected companies related to water management, such as suppliers, treatment equipment manufacturers and water infrastructure service companies. Entrepreneurs who want to invest in the water sector can use the indexes as benchmarks for their operations. The first listed water index was Nasdaq Veles California (NQH2O), which in 2018. was introduced on the Wall Street stock exchange. It is an index based on California water prices that tracks the value of contracts for the right to use the resource. The indicator is used as the basis for water futures in the state. There are now already several major indexes reflecting the value of Blue Market companies from around the world (e.g., S&P Global Water Index) or from a specific country (e.g., Nasdaq OMX US Water Index).

Water-related ETFs are instruments that invest in companies in the water sector. They allow entrepreneurs to gain broad exposure to the water market without having to invest in individual companies. Water-related ETFs offer diversity, reducing investment risk, and are easily traded, making it an attractive solution for investors.

Water futures are contracts that allow you to buy or sell a certain amount of water in the future at a fixed price. They allow both speculation in the market and hedging against price changes. Water futures are particularly important today in regions where access to the resource is limited and its price is subject to significant market fluctuations.

Blue Market – domestic market

On Polish soil, there are modern Blue Market players, while we lack financial instruments that are successfully developing in the world. The technological water sector in our country is in the development stage. Companies and start-ups in this industry are coming up with innovative solutions to existing problems. One such player in the market is Naiad Water Investments Sp. z o.o., a technology company based in Warsaw. The company’s guiding idea is water and its rational use in the face of the global crisis. In doing so, the Naiad team aims to technologically advance the agricultural industry in line with precision agriculture and Agriculture 4.0.

The main issue around which the company is focusing its efforts is the elimination of water waste in agricultural fields. Naiad Water Investments’ most important project is a mobile app for precision crop irrigation. Naiad Irrigation is a tool based on modern blockchain technology, artificial intelligence and the necessary sensors to make the information collected from the field up-to-date, authoritative and very helpful for irrigation decision-making. The application takes into account the type of crop, its environmental needs and growth stage, current and forecast weather conditions, and soil conditions. Ultimately, it is expected to handle all popular crops – at the current stage of development it is limited to wheat, corn and potatoes as model crops. Ultimately, the farmer achieves the most economically advantageous ratio of harvested crop to water used. The results generated are beneficial to the user and the environment. The application thus contributes to the elimination of the infamous waste in agriculture. The vast majority of water, consumed among other things. for artificial irrigation, is not assimilated by crops, becoming a costly loss for the entire population.

Idea 3W – a modern approach to investing

Naiad Water Investments wants to actively participate in protecting and safeguarding the water resources of Poland and the world for future generations. In pursuit of this goal, it is important for many people, entities and institutions to work together, going beyond existing frameworks and schemes. On Polish soil, such opportunities are provided by Idea 3W, which from 2021. is pursuing an innovative approach to water, hydrogen and non-energy coal projects. It is a unique platform that connects companies, academia and researchers, investors and public administration and third sector entities. The flow of knowledge and cooperation opportunities within Idea 3W supports and facilitates the multidimensional development of new projects and the promotion of the developed solutions in Poland and around the world. Thanks to the 3W initiator, Bank Gospodarstwa Krajowego, and the 3W initiative itself, Poland’s technology sector, linked to water, hydrogen and non-energy coal, is already becoming a reason to redefine the existing approach to managing strategic resources. It is possible that this path will be followed in the future by other countries and international organizations that already recognize the need for major systemic changes for a better future of our planet.

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