Water is a critical ingredient of life, an essential resource for the health and development of humanity and ecosystems. However, continuous population growth, climate change, pollution, and inefficient water use have exerted inordinate pressure on our already stretched water resources. These soaring pressures have compelled us to reconsider how we approach water management, particularly from a business perspective. This necessitates us to delve into the realm of “The Business of Water: Investing in a Sustainable Future”.
The Coming of the Water Economy
We are steadily transitioning from the carbon economy to a water economy. The future global economy will significantly revolve around the availability, quality, and management of water resources. This new economy will not only be about securing water supplies but also about conserving, recycling, and providing better water utilities. It’s a transition where water becomes not just an environmental concern, but a fundamental economic asset.
Investing in Water: A Business Perspective
In the realms of the business world, water is increasingly taking center stage. Both as a potential risk and as an investment opportunity, the value of water is increasingly being recognized.
According to the World Economic Forum, water crises are among top long-term risks worldwide [^1^]. Companies worldwide are grappling with the impacts of severe droughts, floods, and water pollution incidents on their operations and supply chains. As such, water has become a strategic asset, requiring better management and increased investment to mitigate the associated risks.
Investments in the water sector, often seen as defensive due to its counter-cyclical characteristics, increasingly offer opportunities for growth. Startups, innovation in water technologies, desalination, water recycling, efficient irrigation, water-efficient industrial processes, and others are among the main areas of interest. Water utilities are also offering increased investment opportunities due to the growing privatization of water services.
Sustainable Water Investments and Green Bonds
The rise in impact investing has brought sustainable water investments into the limelight. Green, social, and sustainability bonds are an increasingly popular asset class used to finance projects with environmental and social benefits. The Climate Bonds Initiative reported a significant rise in water-related green bond issuances, reaching over $36 billion in 2018 [^2^].
Water Stewardship: Ensuring sustainability
While investment in the business of water holds great potential, it is crucial to approach it responsibly. Water stewardship revolves around the responsible management and use of water in a way that is socially equitable, environmentally sustainable, and economically beneficial. Businesses should adopt good water stewardship practices to ensure their operations do not compromise the long-term sustainability of water resources and the communities that depend on them.
Towards a Water-secure Future
Ensuring a water-secure future necessitates investment in efficient water infrastructure, technological innovation, proper water governance, knowledge sharing and capacity building. It’s an undeniable reality, addressing the global water crisis requires innovative business models and considerable investments.
Moreover, integrating the value of water into decision-making processes can help business managers better understand the risks and opportunities related to this indispensable resource. Also, the promotion of ethical water practices can contribute considerably to corporate social responsibility while creating a meaningful impact in terms of water sustainability.
To sum it up, the business of water is not solely about the financial dividends it could yield. It’s about the social and environmental returns it could bring about. It’s about securing a more sustainable and inclusive water future.
As Albert Einstein once said, “We cannot solve our problems with the same thinking we used when we created them”. This is an unprecedented era of water challenges; it calls for unprecedented thinking, unprecedented business ideas, unprecedented investments. Indeed, business and investments have a significant role to play in transforming our blue planet’s water tale.
[^1^]: World Economic Forum – The Global Risks Report 2020
[^2^]: Climate Bonds Initiative – Water Criteria