offers loans at rates to micro-finance institutions and promising small enterprises
that, in turn, serve the water and sanitation needs of people, especially women,
who often are responsible for water-reliant tasks and therefore are affected most
by water shortages.
And because water risk threatens financial stability, big banks and institutional
investors are beginning to drive systemic change by thinking differently about
lending decisions. According to a recent World Wide Fund for Nature (WWF)
study endorsed by the Indian Banks’ Association, businesses with high water risk
account for 40 percent of the total credit exposure of Indian banks. Financial
institutions are in a position, therefore, to push for water risk management as a
condition of lending.
Corporate investors and venture capitalists are stepping up investments in
solutions such as Internet of Things–based smart water meters, solar-powered
desalination equipment, and atmospheric water generators. But technology alone
is unlikely to solve this crisis. That’s why it’s encouraging to see the growth of
innovative financing mechanisms offered by financial institutions. In the U.S.,
Goldman Sachs has invested in a $25 million environmental impact bond issued
by the District of Columbia Water and Sewer Authority. This municipal bond
is funding nature-based infrastructure such as rain gardens and permeable
pavements to slow stormwater surges, and investors earn bonuses linked to the
performance of the project. In the U.K., Anglian Water issued Europe’s first
green bond related to water, arranged by Dutch bank ING. Through the bond,
the water utility has raised more than $322 million, which is funding water
conservation and management projects.
Rejuvenating wetlands
Companies are beginning to get behind efforts to restore the world’s freshwater
ecosystems. Rejuvenating wetlands, in particular, is starting to receive a lot of
attention at the policy level in India. Wetlands are water-saturated lands, such as
swamps, marshes, wet prairies, and mangroves, that support distinct ecosystems.
They naturally regulate the availability of water, absorbing it during floods
and releasing it in dry periods. But years of unplanned development and land
degradation have reduced the ability of India’s wetlands to retain water. The
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