Banking on private finance to tackle the world’s water crisis

Publicado em 17 October 2018

London, 17 October 2018 – With global water resources under ever-increasing stress, a new report from WWF, ING and The Boston Consulting Group (BCG) calls for urgent efforts by corporates, investors, governments and NGOs to deliver sustainable, bankable freshwater projects, which will help improve water security, create financial value and enhance the health of the world’s river basins.

Released today at the Financial Times Water Summit in London, Seizing the Water Opportunity details how private and public capital can join forces to boost global efforts to achieve the Sustainable Development Goal of water for all, securing a critical lifeline for societies, economies and the bottom lines of firms and financiers.

“Without substantial investment in sustainable freshwater projects, the world’s water crisis will only get worse – increasing water shortages, degrading precious ecosystems, and putting businesses at risk of drying and drowning assets,” said Aaron Vermeulen, WWF Global Lead Finance and Freshwater. “The only way to secure sufficient investment is by leveraging the power of the private sector. But individual bankable projects must be part of a broader river basin approach, which also includes improvements to freshwater governance and blended finance mechanisms.”

The Organization for Economic Co-operation and Development (OECD) estimates that US$1 trillion needs to be invested each year in water infrastructure alone to secure water for all. For companies and private sector investors, this presents an opportunity to improve sustainable water resource management and mitigate water risk while also generating solid financial returns.

“By working with our partners and network of water experts like WWF and BCG, ING invests in building a pipeline of sustainable water projects that offer sufficient financial returns and help to reduce long-term water related risk,” said Ambika Jindal, ING Bank, VP Sustainable Finance. “We see opportunities in the water sector and find it important to catalyse freshwater projects that will benefit economies and ecosystems.”

The opportunities for sustainable bankable projects range across all sectors from improving agricultural water usage to enhancing industrial wastewater treatment, developing solar power plants and restoring wetlands. The report highlights some existing bankable projects including:

Farmers close to the Great Barrier Reef adopting sustainable practices, which curbed reef-damaging river pollution and generated significant financial benefits;
Textile manufacturers in Turkey’s Buyuk Menderes basin implementing cleaner production methods, which reduced their costs and cut pollution; and
UK utility Anglian Water raised £250 million in a green bond jointly arranged by ING with proceeds being used to tackle ecosystem-related issues, including resilience and drought.

Common characteristics among these projects include: a capacity to generate a sufficiently large cashflow or mitigate risks, positively impact the environment, and ensure the whole river basin is taken into consideration. Based on these principles, WWF is working on building a cooperative approach to bankable freshwater projects. Advisory sessions have already been held with potential investors and financial experts providing feedback on possible projects in eight river basins – part of a growing pipeline of projects. But this barely scratches the surface.

“Under mounting pressure from investors, customers, and employees, companies are increasingly taking a total societal impact view on their strategies. What’s more, across several industries, we have been able to measure a correlation between societal and environmental performance and financial performance. For several sectors, reducing water-related risks and costs throughout their value chains is a pivotal element in this effort," said Adrien Portafaix, Principal at BCG. “In the wake of the SDGs, we see the emergence of a supporting ecosystem to help make sustainable investments more attractive to private sector players.”

Underlining the growing risks to their supply chains, the report calls on multinational companies to take the lead in promoting better use of water resources by identifying bankable freshwater projects within their own operations and supply chains. Proactively supporting investments in bankable projects can help companies gain a competitive advantage and benefit from lower costs, more resilient supply chains, and a better reputation with customers and regulators.

The report also recommends deeper collaboration between development finance institutions, government aid agencies, NGOs and private sector investors.

“With support from ING and BCG, WWF is using its freshwater expertise, global partnerships and convening power to develop bankable water projects in river basins across the globe,” said Vermeulen. “We believe this innovative approach will benefit communities and companies by contributing significantly to solving the world’s water crises.”

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Notes to Editors:
The full report embargoed until October 17 can be downloaded here

For more information, please contact:
Richard Lee | Freshwater Communications Manager | WWF | rlee@wwfint.org; +31 6 54 287956
Deepa Bose, Media Relations Manager | ING | deepa.bose@ing.com | +44 207 767 6346
Kelly Gerhardt, Global Social Impact Marketing Manager | BCG | gerhardt.kelly@bcg.com | +1 301 771 2496

About WWF
WWF is one of the world’s largest and most respected independent conservation organizations, with over 5 million supporters and a global network active in over 100 countries. WWF's mission is to stop the degradation of the Earth's natural environment and to build a future in which humans live in harmony with nature, by conserving the world's biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption. Visit www.panda.org/news for latest news and media resources and follow us on Twitter @WWF_media

About ING
ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is empowering people to stay a step ahead in life and in business. ING Bank’s more than 51,000 employees offer retail and wholesale banking services to customers in over 40 countries. ING Group shares are listed on the exchanges of Amsterdam (INGA AS, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N). Sustainability forms an integral part of ING’s strategy, evidenced by ING’s ranking as a leader in the banks industry group by Sustainalytics. ING Group shares are included in the FTSE4Good index and in the Dow Jones Sustainability Index (Europe and World), where ING is also among the leaders in the banks industry group.

About BCG
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. As part of our commitment to society and the environment, we have partnered with WWF since 2012, working together to enhance their conservation efforts and strengthen WWF’s global organization. In recent years, we have increasingly focused our cooperation on several key topics, including fresh water. For example, we convened a diverse group of key water users from across South Africa’s public, private, and social sectors to explore the future of water in the country, then collaborated on a report—Scenarios for the Future of Water in South Africa—providing an in-depth analysis of the results.

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Banking on private finance to tackle the world’s water crisis

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