Given the relationship between water security and economic growth, it is safe to say that investments in the water sector are key for sustainable development and inclusive growth, leading to the realization of multiple sustainable development goals such as health, food security, sustainable cities, sustainable consumption and production and health.
SDG 6 specifically reflects the critical importance of water in its own right, ensuring availability and sustainable management of water and sanitation for all. To add to this, there is also a growing recognition of the crucial contribution of water-related investments to climate resilience and to delivering on the Paris Agreement.
Beyond environmental concerns, sustainable and collaborative management of shared water resources also strengthens international peace and security. Yet, according to the WHO and UNICEF, as recently as 2015, 2.1 billion people still lacked access to safely managed drinking water services and 4.5 billion lacked access to sanitation compatible with the objectives laid out in SDG 6.
Organisation for Economic Co-operation and Development(OECD) states that for us to achieve the sustainable development goals of the Paris Agreement and making the Human Right to Water and Sanitation a reality, we need a historic scale-up investment into the development and management of water resources and water resources.
Factors such as population growth, deterioration of infrastructure, Climate change, Governments and their regulators to mention a few are some of the challenges that are majorly affecting water management and security overall. Due to this, there is a dire need for long term investments to improve the water management sector. Investors need to set up long term investments which are required in resilient water infrastructure, climate-smart agricultural systems, improved drainage, nature-based flood protection.
Investors also need to note that to enhance long term investment performance, it is important to hold a broad range of stocks across the different water sectors and industries. Aside from the stocks, it is also important to provide financial aid to innovations that are beneficial and provide modern-day solutions within the water sector.
An example of such organisations is Kenya Climate Ventures-a Kenyan based impact investment company- that supports innovations within the water management sector. Aside from the water management sector, the company also supports agribusiness, renewable energy, waste management and commercial forestry to mitigate climate change and make the world a better place.
Overall, investment approaches to financing humanitarian impact represent a new model that could influence positive behavioral change among important stakeholders and drive better outcomes for those most in need. While they are not the catch-all solution to mounting pressures on the humanitarian system that many hope for, there is a growing appetite for greater investment in the humanitarian market, as well as the need for more time to put in place the relationships, data and tools to realise the ambitions of both social investors and humanitarian organisations to complement grant funding with financing approaches.