Water is clear and transparent yet full of contrasts. As a molecule and as a resource, it can bond—and it can polarize. It is seemingly abundant—yet critically scarce. Its value is priceless—yet it is wasted daily. While water scarcity has always been an issue for arid climates, across the globe more and more regions are maxing out reserves and threatening human health, local development and global economic growth. Currently, two billion people are living in areas of excess water stress.1 Without change, demand for water will exceed supply by 40%.2
Global challenges like population growth, rapid urbanization, climate change, and rising living (and water) standards guarantee that water challenges will only exacerbate. The UN predicts a global population of 8.4 billion by 2030.3 As populations grow, water consumption and water waste increases. More food must be produced—and not just rice, wheat and potatoes but water-intensive varieties like beef, chicken and pork. In parallel, people are shifting from rural to urban centers increasing demands on utilities to support life and industry. By 2030, 60% of the world’s population will be in cities— most of these will be in emerging markets (See Figure 1).4,5
Emerging 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 industrial processing. Emerging market countries on every continent have already embarked on massive infrastructure programs. China, as part of its 13th Five Year Plan, aims to spend 0.75% of its GDP on water treatment. 10
Countries aren’t the only agents investing in solutions to the water crisis. From food and beverage to technology and textiles, companies from a broad swath of sectors are spending billions on water-related projects particularly in growing emerging markets. 11
French food giant Danone will spend nearly US $60 million in Sub-Saharan Africa and China to secure water for dairy and fruit products. Electronics maker, AU Optronics, has invested $1.5 billion to improve water efficiency across production sites. Coca-Cola is investing $160 million to build water plants in Cambodia and Bangladesh and spent US $2 billion between 2003-2014 on improving water efficiency. 12,13
The energy sector also has a keen interest in securing and conserving water. Roughly 75% of all industrial water withdrawals are used for energy production. Not surprisingly, energy companies are pumping billions into desalination technologies in areas of water scarcity. 14, 15
The problems are as old as they are chronic. Ground water stores, river basins, and aquifers not sufficient in many emerging markets due to intensive overuse and mismanagement. The size and scope of need eclipses public budgets. But countries are proving, 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 either pioneering and deploying innovation to combat water scarcity. Their success can be applied to other water-stressed areas.Singapore – the small city-state is a powerhouse in water management. It is one of the most water stressed countries on the planet, but has invested heavily in water management technologies and techniques including natural rainwater capture, waste water treatment, and purification methods like microfiltration, reverse osmosis, and ultraviolet disinfection (See Figure 5).
The water fund gives investors exposure to not just water but also companies with the passion, perseverance and ingenuity to overcome challenges despite the odds.
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.
1 United Nations SDG 2016 Report
2 United Nations Environment Program, Policy Options for Decoupling Economic Growth from Water Use and Water Pollution, March 2016, https://www.unenvironment.org/news-and-stories/press-release/half-world- face-severe-
3UN Department of Econ & Social Affairs Population Division, World Urbanization Prospects, the 2014 Report
5 UN The World’s Cities in 2016
6 United Nations En vironment Program, Policy Options for Decoupling Economic Growth from Water Use and Water Pollution, March 2016, https://www.unenvironment.org/news-and-stories/press-release/half-world-face-severe-water-stress-2030-unless-water-use-decoupled
7 Fidelity In ternational Research Brief, Water: Structural demand growth creates investing opportunities, https://www.fidelityinternational.com/middle-east/news-insight/21-century-themes/water.page
8 United Nations World Water Development Report 2017, Wastewater: The Untapped Resource
9 Aquastat, FAO Global Water Information System, 2014
10 China’s 13 th Five Year Plan: What Role will Wastewater Play?, Water World, h ttp://www.waterworld.com/articles/wwi/print/volume- 2/issue-7/technology-case-studies/china-s-13th-five-year-plan-what-role-will-wastewater-play.html
11 Big Companies invest billions to secure water supplies, Financial Times, November 6, 2017
12 BBC, Future Now Project, Is the World Running Out of Fresh Water?, April 12, 2017
13 Harvard Business Review, Sept ember 9, 2015, Coca - Cola met its water goals early. Were they too easy?, https://hbr.org/2015/09/coca-cola-met-its-water-goals-early-were-they-too-easy 14 United Nations World Water Development Report 2014, Water and Energy,
15 Financial Times Water Scarc ity Report, World without Water: six solutions to a shortage,
16 United Nations World Water Development Report 2017, Wastewater: The Untapped Resource
17 Speech by Angel Gurría, OECD Secretary - General, delivered at the High - Level Panel on Infrastructure Financing for a Water Secure World, http://www.oecd.org/environment/financing-infrastructure-for-a -water-secure-world.htm
18 United Nation’s Sustainable Develop ment Goals, http://www.un.org/sustainabledevelopment/
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