WE'RE WORKING TO END THE WATER CRISIS - WITH THE RIGHT KIND OF INVESTMENT
As world leaders gather to open the 2023 UN General Assembly, much of the world's population still lacks clean drinking water and sanitation. This scandalous daily inequity hasn't changed much from last year or the years before—but it might, and soon.
This article first appeared in Newsweek on September 13, 2023.
MATT DAMON, GARY WHITE, AND KRIS LICHT
There is more will to end the water crisis than perhaps ever before. Six months ago at the largest water summit in a generation, the UN 2023 Water Conference, governments, organizations and companies made 832 commitments to "actions that can be scaled and replicated in the years to come," as the UN requested. The catch: These commitments aren't binding, and only 28 percent identify a clear source of funding.
It's a great display of will, but we need to get to the action. Of course, no one business or organization has the resources to bring clean water to the 771 million people who live without access or bring toilets to the quarter of the world's population who lack them. Thinking collaboratively, though, the money is out there, and there are mechanisms to get it directly to the households that need it.
Consider this: At least 2 million Americans don't have running water or a working toilet at home, costing the U.S. economy $8.58 billion each year. At the same time, U.S. companies are holding $5.8 trillion in cash on their balance sheets, more than triple their $1.6 trillion in 2000. That's one huge reason for them to join the growing momentum in balance-sheet ESG investments, which has helped make impact investing a trillion-dollar market. In expanding water and sanitation access, companies have an area of investment with a 4:1 economic benefit, generated in the best possible way: by preventing sickness and death and enabling more productive livelihoods.
And the real momentum, in collaborative investment, is just kicking off. We can see it in the Water Resilience Coalition (WRC), which brings companies together around shared investment goals. One goal is to enable equitable and resilient water access, sanitation and hygiene for 300 million people by 2030. WRC members and the US government recently invested nearly $150 million into WaterEquity's Global Access Fund IV to begin achieving this.
How will that money help end the water crisis? Very directly: by building lending capacity of local micro-finance institutions to effectively serve affordable water and sanitation loans to households at the base of the economic pyramid who need them most.
Right now, these households are not only at a supreme disadvantage in everyday life, but they also face the worst consequences of more extreme weather, floods, droughts, and epidemics like globally resurgent cholera. The inequities grow with each impact of climate change.
As always, people are making do and meeting their families' needs as best they can, people like Amina in Dar es Salaam, Tanzania, who used to walk more than four miles every day to collect water. Such heroic daily efforts will never end the water crisis, though. Investment will—like the micro-loan Amina took out for a borehole she now uses to get clean water at home, and to generate income by supplying it to her neighbors too.
In a sector that was traditionally left to charitable projects, water and sanitation microfinance has now taken the lead in annual funding flows. And because microfinance puts investment in the hands of households, it can scale as fast as finance comes into the model. In 2022, for example, Water.org enabled microloans that reached over 8 million people, with a 98 percent repayment rate around the world. This year's collaborative investment with the WRC, leveraging capital from corporate balance sheets, aims to amplify this impact further.
While household-level projects have immediate benefits, climate-resilient water and sanitation infrastructure will also help future-proof vulnerable communities. Sustainable utilities such as water treatment plants with enhanced capacity to handle extreme weather can ensure a steady supply of safe water during climate-induced disruptions. Moreover, scalable solutions like localized water treatment units are less vulnerable to the single points of failure common in larger centralized facilities. Such infrastructure investments provide climate resilience and a more reliable water supply reaching more people.
At the midpoint of delivering SDG6 targets, transformative action is required to close the remaining $114 billion per year financing gap, or 3 times current levels, to ensure people have access to basic human dignities in their homes and communities. Companies who see water access as a critical issue don't have to act alone. By pooling resources, tapping new flows of capital, and initiating radical collaboration across sectors, we can end this crisis.