The report comes just after insurer Munich Re's findings that North America has borne the brunt of weather-related natural catastrophes, with 30,000 deaths and insured losses of $510 billion in the 1980-2011 period.
The ongoing drought is the worst in the United States since at least 1956, with 63 percent of the lower 48 states suffering drought conditions in August, says the BofA Merrill Lynch report, "Global Drought -- Opportunities and Risks."
While conditions are far from those in the Dust Bowl years of the 1930s, drought conditions are the new normal, the report said.
Previous reports in a series focused on obesity, energy efficiency and safety and security.
"Food, water and energy security are increasingly bigger issues, and as governments, businesses and other players struggle to adapt to and mitigate drought conditions, there will be an evolving set of opportunities and risks for investors," the bankers said in their findings.
For investors interested in the fight against drought and in promoting food, water and energy security, the financial group has introduced a screen that identifies liquid stocks exposed to global drought-related themes under the Bloomberg ticker MLEIARID.
The stocks included in the screen are those that it considers to be long-term solution providers in such areas as water, fertilizers, crop science, energy efficiency, second-generation biofuels and renewables.
"The severity of the global drought underscores the long-term challenges for national and global economies," said Sarbjit Nahal, a co-author of the report.
"Food, water and energy security are increasingly bigger issues, and as governments, businesses and other players struggle to adapt to and mitigate drought conditions, there will be an evolving set of opportunities and risks for investors."
The Munich Re report also cited conditions in which North American stakeholders could benefit by learning about the weather risks.
The study was prepared in order to support underwriters and Munich Re clients in North America, the world's largest insurance and reinsurance market.
"The North American continent is exposed to every type of hazardous weather peril -- tropical cyclone, thunderstorm, winter storm, tornado, wildfire, drought and flood. One reason for this is that there is no mountain range running east to west that separates hot from cold air," said the report.
Nowhere in the world is the rising number of natural catastrophes more evident than in North America, it said.
Munich Re's Geo Risks Research unit head Peter Hoppe called on all concerned to "collaborate and close ranks" to meet the situation.
Peter Roder, Munich Re board member with responsibility for the U.S. market, said, "We should prepare for the weather risk changes that lie ahead, and nowhere more so than in North America."