Challenges of water scarcity: a business case for financial institutions
Water scarcity currently affects many regions of the world. Without a significant reversal of economic and social trends, it will become more acute over time. Although water is considered a renewable resource, in many parts of the world, water resources have become so depleted or contaminated that they are unable to meet ever-increasing demands. The challenges are more acutely felt in developing countries where 95% of the world’s new population is born each year. This has become a major factor impeding economic development, and also business operations. This report, based on a review of close to 20 cases of projects and investments mainly in Africa and Latin America, and supplemented with interviews with practitioners from both development and commercial financial institutions, concludes that there is a business case for improving risk management tools, which can specifically be related to the risks borne by water scarcity.