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In one of my favorite summer memories, my older brother and I run along our suburban Phoenix street during a monsoon. It’s after dark and the rain pours down warm and the wind blows wildly. When we reach the wide-open expanses of the schoolyard, we twirl like Dorothy, whisked away, and fall on the ground drenched and muddy and laughing.

Like much of life back in the day, we took the monsoon rains for granted. They came most every year, a long-term average of 5.37 inches across Arizona between June and September, bringing moments of sweet relief from the heat, and leaving behind the sweet, earthy scent of desert rain.

This summer, their arrival cannot be taken for granted. In my home state and across the American West, summer’s coming has so far brought only record-breaking heat, drought and wildfires. Forecasters can’t say whether the rains will arrive to offer respite, but if the last couple of years are any indication, they won’t. In 2020, Arizona experienced its driest monsoon season on record — otherwise known as just a lot of hot wind — with a statewide average of only 1.51 inches of rain. And with Lake Mead, the key reservoir on the Colorado River, at its lowest level, the state is preparing for “painful” water restrictions.

Water scarcity has become a global crisis, one that will only worsen as the planet continues to heat up.

Concerns about water are not limited to the American West, of course. Water scarcity has become a global crisis, one that will only worsen as the planet continues to heat up. Despite how crucial water is to business, and to life itself, the risks that come with not having enough of it have often been overlooked by investors, who’ve tended to focus more on carbon.

That is changing, though, as severe, long-term droughts in important agricultural hubs such as California give investors mounting reasons to worry. Just a couple of weeks ago, analysts at Barclays identified water scarcity as “the most important environmental concern” for the global consumer staples sector, which includes foods and beverages, household goods and hygiene products. In fact, the analysts estimate that average EBITDA impact from water is three times higher than that of carbon for the sector.

This is largely because of its dependence on agriculture, which consumes the most water by far, slurping up roughly 70 percent globally and wasting about 60 percent of that, largely through inefficient applications. Industries including energy and manufacturing use up 20 percent more, give or take. And demand from agriculture, industry and municipalities will only grow — the United Nations projects a 20 to 30 percent increase by 2050 — as the world’s population rises to somewhere around 9.7 billion.

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