Why is it so important for us to direct capital towards a sustainable water future?
Water is a basic human need. Whether we’re talking about drinking water or sanitation, we know access to water is something that’s going to be crucial to the longevity of the human race.
We also know the stresses on the water system are only going to get worse. We have a global population that is likely to peak at about 10 billion inside the next three or four decades, resulting in a net aggregate demand increase for water of around 30%. This means we potentially have a supply gap between the aggregate demand versus what we can supply in terms of clean and usable water of around 25%.
Unless we find technologies and solutions that can help to improve this picture, it’s going to be a major challenge. I’d add here that people tend to associate water mainly with drinking water and sanitation, but it also has significant parallels to food and agriculture. If you look at water withdrawals – the amount of water that’s taken out of the system each year – 68% of that goes into agriculture.
And if you think about total consumption, that’s net of the recycling of that water, food now accounts for 92%. Unless we can think about new ways of securing our water and investing capital in new technologies that can help with desalination or water recycling, there are going to be even greater stresses on the system than we’re seeing today.
What are the major challenges to this? We imagine climate change is having a massive impact.
Everything we’ve just said doesn’t necessarily even reflect the significance of climate change and how that’s putting even greater stress on the system. Take Lake Mead, for example, which people will know as the largest reservoir in the US associated with Hoover Dam. [In 2021], water levels in Lake Mead hit their lowest level on record since its establishment in the 1930s.
We’re seeing weather patterns change, surface temperatures are increasing and that’s putting a lot of pressure on the system. When we think about how we can solve that, evidently there are technologies we can develop and invest in that can help improve the availability or the desalination or recycling of water.
Closer to home, if we took all the white water pipes we have in our system in England and Wales, they would run around the earth roughly eight times. Now, if you think about the leakage from that system, that’s roughly three billion litres of water a day that are lost as a function of poor monitoring and poor repair cycles.
The technologies we need in 30 or 40 years’ time are going to be crucial. But the simple technology of how you monitor your system and repair leaks more quickly is going to be critical.
Read the full Q&A in ESG Clarity’s March 2023 digital magazine.
