The Water Resilience Coalition (WRC), a CEO-led initiative committed to reducing global water stress by 2050, product of the partnership between the UN Global Compact and the Pacific Institute, launched the WRC Investment Portfolio and unveiled an initial supported vehicle, the WaterEquity Global Access Fund IV. The WaterEquity Fund has attracted nearly $140 million in investments.
Five WRC member companies – Starbucks (the Fund’s corporate anchor investor at up to $25 million), Ecolab, Gap Inc., Reckitt and DuPont – have come together to invest alongside a $100 million commitment from U.S. International Development Finance Corporation, the United States Government’s development finance institution. This marks a significant milestone to achieve the intended total of $150 million that the WaterEquity Global Access Fund IV expects to attract by mid-2023 with the goal of reaching 5 million people with access to water, sanitation and hygiene.
Two billion people around the world currently live in water-stressed areas. Based on projected demand, if no action is taken, it is predicted that within the next 10 years the world will face a 40 per cent shortfall in freshwater supply. By 2050 more than half the world’s population will live in water-stressed areas.
“Some $300 billion of business value is at risk due to water scarcity, pollution and climate change. It is vital the corporate sector invest now to protect this natural asset. Water is a shared resource and so we can only safeguard it to ensure the quality and quantity of its availability if we work together," said Sanda Ojiambo, CEO and Executive Director of the United Nations Global Compact.
To address a challenge of such magnitude, the WRC Investment Portfolio charts a pathway for long-term sustainable investments in water—at a time when global stakeholders are calling for new investment strategies for water and increased investments from the private sector.
The WaterEquity Fund has attracted nearly $140 million in investments
The pipeline identifies a diverse range of investment mechanisms that amount to at least $1 billion. Some examples include private equity investments, blended finance mechanisms, microfinance and impact bonds to drive investment into water, sanitation, and hygiene (WASH); nature-based solutions; and water and climate resilience.
WaterEquity is the first asset manager exclusively focused on solving the global water and sanitation crisis. Its fourth fund, the Global Access Fund IV, will have a positive impact on households of at least eight countries in South and Southeast Asia, sub-Saharan Africa and Latin America who will gain access to microfinance loans for the purchase of WASH assets such as household toilets and sewage treatment systems.
“This innovative financing strategy is poised to help mobilize the corporate sector on water in a radical new way—through investment collaboration,” said Jason Morrison, President of the Pacific Institute and Head of the CEO Water Mandate. “By bringing together leading companies in collective action and leveraging collective capital, the Water Resilience Coalition members will have more impact on water together than they can on their own.”
WaterEquity’s next fund, the Water and Climate Resilience Fund, will focus exclusively on investing in municipal-level climate-resilient water and sanitation infrastructure for low-income populations in countries in South and Southeast Asia, Sub-Saharan Africa and Latin America.
Through this fund, WaterEquity will provide financing for projects and companies intended to improve water sourcing, treatment, distribution, and reuse. Microsoft has reached a preliminary agreement with WaterEquity to be the first investor in the Water and Climate Resilience Fund subject to execution of final documents. Today, Starbucks also announced a total commitment of $50 million in investments to advance access to water, sanitation and hygiene. Both Starbucks and Ecolab are exploring participation in this fund as part of each company's efforts to advance WASH.
“Water underpins every major global challenge. Addressing the global water and sanitation crisis is one of the best ways to build resilience to climate change, achieve global gender equality, and improve health and education,” said Matt Damon, Co-founder of WaterEquity and Water.org. “Our support from the Water Resilience Coalition helps us expand access to life-saving safe water at scale by mobilizing private companies to take collective action and put the needs of the most vulnerable front and center in their investment strategies. Through increasing access to water and sanitation, we can end the cycle of poverty once and for all.”
The WRC Investment Portfolio is the collective investment strategy of the Water Resilience Coalition, a partnership between the Pacific Institute and the UN Global Compact, to bring together CEOs of the world’s most influential companies to build a water-resilient future. Today, 28 leading global companies, as well as a range of partners, including WaterAid, Water.org, and Unicef, are currently part of the Coalition and commit to accelerate quantifiable positive water impact in 100 water-stressed basins, contribute to water security for 3 billion people, and enable equitable WASH access for more than 300 million people by 2030.
The launch of the WRC Investment Portfolio also offers a preview of a second major announcement by the CEO Water Mandate to mobilize the corporate sector during the first official Side Event of the UN 2023 Water Conference on 22 March in the UN Headquarters.