Across the globe regions are maxing out water reserves, threatening human health, local development and global economic growth. The volume of renewable water per person is declining. There are currently 2 billion persons living in areas of excess water stress. Without change, demand for water will exceed supply by 40%.
Water needed to produce 1kg of beef: 15,000 litres
Water needed to produce daily food of one European: 5,000 litres
Accelerating global and local demands
Secular trends like population growth, rapid urbanization, climate change, and rising living (and water) standards guarantee that water challenges will persist. More people means more food, more industry, more energy and more waste—all requiring enormous volumes of water. In parallel, population shifts from rural to urban centers means more people will be living in cities. Densely packed cities means greater demands on municipal infrastructures to support drinking water and sanitation.
Submerged in risk
The majority of population growth will be in developing countries, many of which are already suffering from water stress. Global warming is also posing additional threats. Floods and droughts are becoming more frequent and more severe—developing countries, in particular, lack the infrastructure to buffer the devastating impact on public health and regional economies. What’s more, as much as 90% of total water consumption in developing economies goes towards to an ill-equipped, inefficient, and excessively polluting agricultural sector.
Engines of Growth
EM markets will not only be the population engines but also the economic engines fueling global growth. As a result, infrastructure improvements are needed to support manufacturing and processing of consumer and industrial goods. Emerging market countries on every continent have already embarked on massive build-out programs. But need-supply gaps remain. To secure water supplies for their own production, private enterprises have stepped in, spending billions on water-related projects across the globe.
Singapore—uses natural rainwater capture, microfiltration, reverse osmosis, and ultraviolet disinfection to curb water stress.
Gulf States—an abundance of salty seawater make desalination plants effective. Cloud seeding is also used. Wind and solar-powered desalination is a cost-effective and less energy intensive way of harvesting H2O.
Jordan—treats and re-uses waste water for irrigating crops. Wastewater is an untapped opportunity. 80% of wastewater goes untreated globally.
No growth without clean water
From a business perspective, expansion into emerging markets is critical for the continued growth of many listed companies. From a regulatory perspective, governments and citizens concerned about population health and ground water pollution are enforcing stringent water quality standards. From an investment prospective, responsible shareholders and other stakeholders are pushing for better water stewardship and water management disclosures to back it.
Refreshing solutions to parched problems
Ground water stores, river basins, and aquifers are inadequate in many emerging markets due to intense overuse and mismanagement. But as some countries have already proven, a little financing, ingenuity and long-term thinking, can go a long way. Singapore, Jordan and the Gulf States are just a few water stressed zones that are pioneering and deploying innovation to combat water scarcity. Their success can be applied to other water-stressed areas.
The Ripple Effect across SDGs
The cost of building new and upgrading existing water infrastructure is enormous—size and scope of need eclipses public budgets. The UN SDGs provides a framework that helps public and private sectors prioritize, finance and overcome global challenges like water scarcity efficiency and efficacy.
Water management is addressed by SDG 6: Clean water and sanitation, but water’s essential role in supporting healthy populations, ecosystems, economic development and global growth is more far-reaching. In fact, water management has a direct impact on more than half of the 17 SDGs. Investing in water companies, not only helps safeguard clean water supplies, it’s also an effective way to optimize SDG contributions, reduce inequalities, and improve the lives of billions across multiple economic and health dimensions.
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