This year’s World Water Day 2021 captured commitments and thoughts associated with the Value of Water. The pandemic has exacerbated social inequalities, making the economic case for water investment even stronger. Sustainable water investment and a focus on Corporate Social Responsibility (CSR) are rapidly growing to seize this opportunity.
Increasing Scarcity of Fresh Water
The gap between those who have plentiful clean water and those who do not creates human costs. These costs often dominate the conversation around water’s value. The WASH community well understands and often quotes statistics detailing those who lack access to basic water and sanitation.
The World Water Day 2021 featured many of these statistics. These statistics regarded the increasing scarcity of fresh water. They also highlighted the number of people forced to drink contaminated water. Finally, they addressed the impact of climate change on water resources.
There is a second layer of information lying beneath these important and essential human stories. This information may help drive water investment from a purely financial perspective, whether via funding or finance.
According to water.org, the financial gap required to achieve SDG 6 is $114bn per year, every year until 2030. At present, 80% of countries report insufficient financing to meet current national WASH targets. These targets are often lower than the SDG 6 objectives.
This seems like an insurmountable gap until you consider two more factors:
- Failure to invest in the water sector will reduce global growth by up to 6% by 2050
- Every $1 invested in water and sanitation delivers $4.30 in economic benefits to individuals and society.
- Families at the bottom of the economic pyramid have a $12bn demand for finance to meet their water and sanitation needs.
The Economic Imperative of Water Investment
Investment in water to avoid global growth contraction whilst boosting the spending power of individuals and society seems like a solid economic win/win.
The pandemic has shone a harsh light on the inequalities of access to safe water and sanitation over the last year. Compared to the coming impacts of climate change, we may look back at COVID-19 as a minor difficulty.
Up to 700 million people will be displaced by water scarcity by 2030. Additionally, 450 million children currently live in areas with very high or high water vulnerability.
Yet source water protection can cost as little as $2 per person per year.
To prevent large-scale migration, often to adjacent regions where water scarcity already exists, for such a low investment seems a great human return but there is an associated financial payback.
Investing in Water: A Win-Win for People and the Planet
Investment in water infrastructure of $1 per square metre for informal settlements increases land value by $3 – 11 per square metre. For a relatively small cost, communities likely to be displaced by climate change can be better protected with solid economic results.
The good news is that the financial sector is beginning to turn towards the opportunities offered by sustainable investment, including water investment, and impact investment.
Sustainable investment funds controlled $30 trillion worth of assets at the start of 2018, a 34% increase over two years. The pre-pandemic forecast was to reach $50tn by 2028. There is a significant shift towards CSR-focused investment by institutional, corporate, and private investors.
At Aquatabs we are intensely focused on playing our part. We deliver sustainable water purification systems for schools, hospitals, and small communities, and we support social enterprises working to improve access to WASH services in developing economies.
Contact us to learn more about how we create social enterprises, make safe water accessible, and ensure the global delivery of water’s value.
