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Investors today can avert the water crises of tomorrow


Rick Hogeboom

Executive Director Water Footprint Network

Conflicts are looming over Earth’s most precious resource; water-wise investors need to step forward to quench tomorrow’s thirst and avert preventable suffering.

Whether water crises will surge tomorrow or not is decided in boardrooms of investors today. Will they choose to invest responsibly or will business-as-usual come at the cost of crumbling conflicts?

Not acting on water sustainability could reduce national growth rates by up to 6% of GDP, by 2050.

Water is essential to life. It touches on nearly every aspect of development. Tragically, current water (mis)management causes four billion people to live in areas that face water scarcity already today. What’s more, the World Economic Forum identified water crises in the top-three system risks in terms of global impact, right alongside involuntary migration and weapons of mass destruction. Widespread desertification, failing harvests, factories closing store, and conflicts – potentially armed – are looming. Worst of all, population growth, increased affluence and climate change sketch a dim outlook for what lies ahead.

The cost of inaction

The World Bank warned that not acting on water sustainability can reduce national growth rates by up to 6% of GDP by 2050. Reaching SDG 6 (ensuring availability and sustainable management of water and sanitation for all) requires an estimated financial injection of a staggering US$2.6 trillion until 2050.

While managing water wisely is a shared responsibility – governments, businesses and consumers all have to take on their role – no player has more influence on what we are up for in the coming decades as investors. These affluent actors shape the economy of tomorrow. They greatly influence whether humanity’s water footprint will grow uncontrollably, or if we manage to keep it within sustainable margins.

Wise water stewardship

Steering clear of future misery requires responsible water investment to become the new standard – and fast. While the corporate world started waking to this realisation, investors – banks, pension funds, insurance companies and the like – struggle to come up with water-sustainable business models. Despite several responsible investment principles and CSR-frameworks out there, investors seem to remain elusive as to what wise water stewardship comprises.

It took the world four decades to start acting on carbon and climate change…

It need not be difficult, though. It all starts with awareness. Awareness that the activities they are about to invest in will cost water too – not merely money. Water that needs to be shared with local firms, fish and families. It’s then only a matter of asking the right questions if it is water-wise to proceed the investing in the proposed activity. How much water will the new activity use and pollute? Is that use efficient, sustainable and fair? Are we considering direct operations only or also often overlooked supply chains? What can we do to reduce or improve water use?

From scarcity to abundance

What we need, most of all now, are forerunners that take on the torch and lead the way. Visionaries, whose success stories will both convince and enlighten other investors and multi-nations to invest water responsibly.

It took the world roughly four decades to start acting on the carbon crisis and climate change.

Water is more visible than carbon, with dry rivers, dead fish and deprived communities as clear and unapologetic witnesses to its misuse. Let’s not wait another 30 years to move into action on water. If we become wise water stewards now, we can go from scarcity to abundance.

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