Water scarcity: investing in resources

Charlotte Kan
Charlotte Kan
Clean water is vital to human survival and water aid policies are a hot topic among big corporations following the latest WEF in Davos. Vision considers changing attitudes

With concerns about the financial crisis abating, the world's leading political and business figures reunited in the small skiing resort of Davos for the World Economic Forum (WEF) have been paying more attention to an even greater threat to the world's stability: water scarcity.

The WEF's 2013 report named water scarcity as one of the top global risks facing companies in the 21st century. This year, it remains high up on the list. "The various threats to the planet's supply of fresh water rank third on the list of convulsive planetary threats of greatest concern," the 2014 report says.

Currently, more than one in 10 (768 million) people worldwide lack access to drinking water, while more than one in three (2.5 billion) lack access to sanitation, says international aid agency WaterAid. Lack of access to clean water brings out diseases, which, every year, lead to the deaths of over 700,000 children under the age of five, while the poor availability of water and sanitation are estimated to cost developing countries US$260bn annually.

Faced with those devastating figures, and as consumers demand more from corporates in the field of sustainability, the world's largest companies are increasing water-related initiatives and investments.

This makes a lot of business sense, as for every US$1 invested in water and sanitation, an average of US$4 is returned in increased productivity, says WaterAid, which has worked with the private sector for over 30 years.

One of the aid agency's partner is consumer goods giant Unilever. The company's Sustainable Living Plan aims at halving the water associated with the consumer use of its products by 2020.

"Water shortages are an increasingly common concern around the world and are exacerbated by a number of factors including climate change and population increase. By 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity and two-thirds in water-stressed conditions. To grow our business sustainably, we must reduce the total amount of water used across our value chain - from raw material sourcing through to the design of our products," the company says.

Unilever is part of an increasing network of multinationals working with charities to help deliver innovative - and when possible, lucrative - solutions to improve communities' access to fresh water.

The PepsiCo Foundation for instance has pledged US$35m to water programmes in developing countries, including US$12.1m to Water.org. The charity, set up by American actor Matt Damon and friend Gary White, has launched several market-based initiatives including WaterCredit, a microfinance programme that gives families small loans to meet their water and sanitation needs.

Other participants include the Caterpillar Foundation, which will invest US$11.3m over the next five years in the programme, and the IKEA Foundation, which awarded US$6m to WaterCredit and another initiative, the New Ventures Fund, which searches for new solutions to the global water crisis.