by Maria Drew
Water. Energy. Food. Three vital components for sustainable development. The interaction of these factors is commonly referred to as the Water‑Energy‑Food Nexus (WEF‑Nexus).
Changes in population, urbanization, diets and economic growth drive demand within each segment—creating complex challenges around the globe. If one WEF‑Nexus component is mismanaged, the other two will ultimately feel the impact.
The linchpin of the WEF‑Nexus is water—as a finite resource, water scarcity has a direct impact on food supply. If a local WEF‑Nexus spirals out of balance, lack of water shifts from being a global, long‑term sustainability concept to a more local and immediate problem. As a result, a country’s water‑energy‑food balance can be a good indicator for the likelihood of greater environmental regulation.
Understanding how the three components interact provides a platform for identifying and analyzing potential effects on companies and industries, most notably through the nature and pace of resulting regulatory reform.
This paper analyzes the rise of WEF‑Nexus pressures across the globe and highlights how insights into the WEF‑Nexus imbalance in China is guiding our investment analysis across a range of industries.
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