2020-02-01_strategy+business

It’s up to business to connect the drops. Water deficits jeopardize industrial

growth, energy production, agriculture modernization, and food security. And the

cumulative effects of water scarcity are startling; the World Bank estimates that

in vulnerable regions, water scarcity could cut economic growth rates by as much

as 6 percent of GDP. Some businesses are already using their skills and resources

to lead initiatives that will create a more water-secure future. They’re generating

new revenue streams from water-smart technologies and reducing operational

risk by using water more efficiently. But to truly tackle the water crisis in ways

that mitigate societal and business risk and unlock new market opportunities,

companies will have to go beyond incremental improvements. They will have to

deploy innovative business and financial strategies to become stewards of water,

and shift how water is used and managed by industry and agriculture.

Here are some emerging practices that suggest how a few companies are

beginning to do just that, in India and elsewhere.

Banking on “blue”

U.N. estimates of how much investment is needed for water security and

infrastructure between now and 2050 cite eye-popping numbers in the trillions of

dollars. But investing in water is not an

easy proposition. Water is the lifeblood

of societies and, therefore, water-related

investments must be managed with

care and in collaboration with affected

communities and their governments.

This might help to explain why investors

have held back. In India, most impact

investments go to the financial-services

sector, thanks in part to the history of microfinance in the country, which means

needs such as safe water and affordable housing are neglected.

Fortunately, new approaches are emerging to help direct capital toward

“blue” opportunities. The two-year-old WaterEquity impact fund, which has

US$60 million in assets and the star power of actor Matt Damon behind it, is

scaling water investments in India, Indonesia, Cambodia, and other countries. It

Water-related

investments must be

managed with care and

in collaboration with

affected communities and

their governments.

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