Sustainable investment: The value of clean water

Hollywood actor and philanthropist Matt Damon has one simple vision: provide clean water for every person on the planet.

"Access to water is access to education, access to work, access — above all — to the kind of future we want for our own families and all the members of our human family," says Damon. "You cannot solve poverty without solving water and sanitation."

Damon is co-founder of Water.org, a non-profit organization that enables people in desperate need to secure water connections. The organization prides itself on pioneering "market-driven financial solutions to the global water crisis."

Because of Water.org, more than 6 million people in 14 countries have been able to pay for their own toilets or taps to be built, giving them access to safe, clean water. Partnering with micro-finance institutions, Water.org philanthropic subsidies have leveraged more than $369 million in microloans over the past 10 years. The loans, which on average are $188, are paid back over two years at an incredible repayment rate of 99 percent.

Now the organization is taking this successful model, scaling it up, and opening it to investors.

Gary White, co-founder and CEO of Water.org, says he came to the conclusion that "traditional philanthropy was never going to be enough" to solve the issue.

Water.org's affiliated non-profit WaterEquity has launched an investment fund with the goal of raising $50 million from accredited investors in the U.S. and Europe this year. The fund is managed by a dedicated portfolio investment team.

This "catalytic philanthropy" is a trend that the finance sector is following closely. "Innovative investments like these, aimed at solving specific problems, have emerged in recent years," says Rina Kupferschmid-Rojas, head of sustainable finance, UBS & Society, adding "in our view, they will continue to grow in popularity."

UBS is a market leader in impact investment, where investors potentially receive a financial return as well as supporting a positive social or environmental impact.

"We estimate that the current global water market is roughly $500 billion to $600 billion annually," says Kupferschmid-Rojas, adding, "market studies estimate that the market size could reach $1 trillion by 2020."

She views the longer-term growth outlook as "compelling," saying UBS expects to see water demand "exceed supply over the next several decades, and that requires additional investment."

Mumbai-based ThinkPhi is a start-up that has also spotted the market potential. Its patented system, Model 1080, smartly combines collected rainwater and renewable energy to produce clean water.

ThinkPhi solar-powered inverted canopy is one remarkably simple solution to an incredibly complex problem. The product can harvest rainwater and filter it to generate more than 125,000 liters of drinking water while at the same time generating up to 2.2KWp (kilowatt peak) of solar energy.

Set up by wife and husband Priya and Samit Choksi in 2015, ThinkPhi was not just looking for innovative but "transformational" products.

"We were focusing on disruptive ideas to open up new markets," explains Priya Choksi, who trained as an architect in Atlanta.

With more than 40 percent of the world's population affected by water scarcity–a number only set to increase–it's clear that governments alone cannot solve the problem.

As businesses firm their commitment to the United Nation's SDGs (Sustainable Development Goals) and more investors seek out sustainable investment funds, there is no doubt that "clean water" projects like Water.org and ThinkPhi will continue to spring up.

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