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Water scarcity is a growing risk for companies By Chetan Mistry , strategy and marketing manager for Africa at Xylem
Sustainability has become a major investment focus . News headlines frequently point to how investors are sidestepping old energy sources such as coal , favouring greener and more sustainable alternatives .
According to the US Forum for Sustainable and Responsible Investment ( US SIF ), the size of US sustainable investment since 1995 has increased more than 25-fold , today totalling portfolios worth USD16.6-trillion . Perhaps more impressive is that this total has grown from USD11.6-trillion in 2018 , showing sustainability investment is accelerating at a rapid rate .
Sustainability comes in many forms , and it can range from resources to production to who companies hire . Environmental , social , and governance ( ESG ) investment is a big priority related to the strategies of many organisations . Energy is arguably the leading area that attracts sustainability investments , especially since it relates heavily to carbon levels and climate change concerns .
Yet , for all the positivity towards sustainability , the world is developing a blind spot for a particular resource – water . If you look at comments and stories around sustainable investment , water does not feature often . When it does , it ' s usually around pollution and tends to be grouped with air quality . Yet , that doesn ' t capture how multifaceted water is in today ' s world . For example , there is a direct correlation between water availability and energy generation – not just in terms of hydrogeneration , but cooling and other technical requirements . Water is also a critical part of agriculture and food security , and a primary topic around urbanisation .
Then why isn ' t water as firmly on the agenda as other sustainability topics ? The likely answer is that we take the resource for granted . Cheap and easy access to water convinces us that it ' s not threatened . Water shortages are still much rarer than power blackouts - though that is changing . The stories of drought impacting cities such as Cape Town and Chennai , or entire states like California , are becoming more frequent .
Companies are taking note . According to a research note from Barclays released a few months ago , water scarcity is " the most important environmental concern " for the global consumer staples sector . A growing number of large enterprises worry about water access , a topic that is rising to the top of risk registers - especially since there is real cause to believe that climate change will be a risk multiplier around water issues .
Barclays estimated that freshwater demand for food cultivation will increase 40 % by 2030 , and the consumer staples sector can expect a cost impact of at least USD200-billion . Costs are already rising : the average cost of water in 30 major US cities rose by 60 % between 2010 and 2019 . The bank concludes that water should be the leading ESG concern .
Fortunately , there is a lot we can do to improve water availability . Established water infrastructure can benefit tremendously from modern digital enhancements such as smart metering , small leak detection and wastewater recycling . Communities can be a part of the solution if we introduce them to sustainable water practices and help
Joshua Woroniecki | Pixabay
The world is developing a blind spot for a particular resource – water .
them appreciate and take charge of local conservation efforts . Agriculture can adopt more sustainable water practices – a particular opportunity for South Africa ' s growing smallholder farming industry . Environmental efforts to remove thirsty alien plants , rehabilitate wetlands and replenish aquifers will significantly improve water resources .
Above all , water sustainability is a culture . We must use opportunities to promote and amplify the importance and delicacy of water to each person , encouraging them to look at their water habits . Imagine if someone just left taps running – it would get under most people ' s skins . We can explore ways to expand that attitude into other areas of water preservation .
If we don ' t treat water sustainability as a priority , it will assert itself . If you think the world stops turning when the power goes out , imagine what happens when taps run dry . We can still light a candle , but we can ' t encourage a trickle from a tap .
Barclays put it best : " Water should be considered the largest driver of environmental concern for the staples sector ," and water is likely to have " a greater financial impact on the sector than carbon reduction strategies ". CLA
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