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Investing in Water Technology: A Guide to Finding Sustainable Solutions

Investing in water technology is one way investors can help support businesses addressing these problems while creating value through profitable investments.
sustainable water tech

Does investing in water technology address climate change? Are you interested in finding sustainable solutions to ensure our planet’s valuable water resources are robust for the future? If so, then impact investing is a great option!

In this blog post, we explore how investors interested in investing in water technology can use their capital to bring about meaningful and lasting environmental change by focusing their investments on water technology.

From financing innovative projects that protect vital watersheds, developing new desalination processes that reduce reliance on groundwater reserves, or launching start-up ideas with potential applications for global markets – there are many ways that sustainable investing can leverage its financial capabilities to make planetary changes.

We’ll discuss some of the key strategies investors can utilize when considering investments related to water technology.

The Demand for Water Technology Funding

As the climate crisis continues to evolve, so too does the demand for organizations and investors to fund water technology projects that promote sustainability. As an impact investor or consultant focused on environmental sustainability issues, you may be faced with a dilemma on how best to identify and support promising solutions in this ever-expanding landscape of possibilities.

With the world’s population growing, so does the demand for freshwater and new water technology. However, the supply of freshwater resources is finite, and the dual forces of climate change and population growth are putting unprecedented pressure on our water systems.

You may wonder how this is possible on a planet that’s comprised of 97% water.

The problems are two-fold. First, of the total water on planet Earth, less than 3% is usable freshwater, and only 0.03% of that is accessible on the surface. The rest resides in the form of polar ice caps, ground ice, and permafrost.

At the same time, the Earth’s population is growing by leaps and bounds, and demand for safe, fresh water sources is growing with it. In fact, more than 2.1 billion people face water insecurity each year, and demand is expected to increase by 50% by 2050.

The Reasons for Water Scarcity and Some Solutions

There are several reasons that fresh, usable water is so scarce, and these can be traced back to five major factors that will continue to affect the world’s water supply if these trends aren’t reversed.

Unsustainable development practices

Many industrial practices and infrastructure development projects impact the water supply through groundwater contamination and by reducing the soil’s water storage capacity. This, in turn, reduces the ability to replenish the groundwater and increases the impact of issues like soil erosion, groundwater contamination, and evaporation.

In fact, approximately 80% of industrial wastewater generated by mining, manufacturing, and urban development is dumped back into the water supply untreated. Diversionary practices like large-scale construction of hydroelectric dams and overuse contribute to the problem.

Unsustainable agricultural practices

The single biggest consumer of our water is agriculture, and the demand from this industry is expected to increase 19% by 2050. Much more immediately impactful is the extreme water stress felt by the agricultural industry, which is expected to increase to 40% of all global agriculture within the next 16 years.

Unsustainable agricultural practices, such as inefficient irrigation and planting practices, mean that nearly half of all water used for agriculture doesn’t even reach the intended crops. In addition, water runoff is polluting water sources and harming marine life through large quantities of toxic substances like nitrogen and phosphorous seeping into the water.

Government inaction

Government policies that ignore or merely pay lip service to these issues create a disconnect between the available water supply and increased demand. When you add a lack of coordination between governments and organizations, in addition to a lack of awareness among populations affected and low prioritization of water depletion issues, you’ll see the failure at all levels to address these problems in any meaningful way.

Corruption and greed

Possibly worse than inaction, as well as a contributing factor to water insecurity, is the level of greed and corruption at all levels. This includes everything from buck-passing and blame deflection to outright bribery in terms of handing out contracts to corporations involved in activities that contribute to the problem. A great example of this was Brazil’s “Operation Car Wash scandal of 2014.

Environmental degradation and climate change

All other roads lead to the cumulative effects of environmental degradation and climate change on our planet and our increasingly diminished water supply. Because all of our natural systems are interconnected and interdependent, a change in one area has an effect on all others.

Degraded landscapes impact plant growth and density, which impacts rainfall. Then there are the increasingly volatile weather systems that impact the severity and spread of droughts and flooding, which are in turn affected by increasing temperatures that accelerate evaporation as well as the presence of increased energy and water in the upper atmosphere.

These factors not only increase violent weather patterns and threaten our ability to access clean safe water, but they will lead to widespread personal, economic, and political instability.

Although these trends mainly affect developing countries, the first world is not immune. In fact, we are culpable for much of the disasters facing us. That means that the problems are ours to share, and it’s up to those of us who can solve them.

Technology may be contributing to the problem as bigger data centers and applications consume more resources than ever before. However, sustainable technologies are being developed that are poised to provide effective solutions when properly and fully funded and implemented.

How Investing in Sustainable Water Technologies Will Help

Investing in sustainable water technology presents an opportunity to address these challenges while also generating strong returns for investors. The emerging trends being developed in the field of sustainable water technology create unique opportunities to capitalize on this growing market segment and save the planet at the same time.

In other words, it presents the chance to get in on the ground floor of a growth industry that’s born of necessity and spurred by innovation.

Smart Water Management and Efficient Irrigation Technologies

Organizations like the World Sustainability Foundation are driving innovation in agriculture and creating new opportunities for investment.

The future is exciting, with new tech developments merging almost daily to alleviate sustainability issues that will affect us all if left unaddressed. Some of these innovations trending over the next few years include:

Smart Water Management Platforms: These are aimed at commercial and industrial end users with an eye toward minimizing waste and monitoring water usage/wastewater disposal in urban and industrial settings. This includes technologies used to anticipate usage, reduce systematic downtime, streamline maintenance requirements, and minimize expenses.

Investing in water technology and opportunities include software and systems development.

The Circular Economy of Reusing Wastewater: This solution seeks to transition from a linear water lifecycle of investment, acquisition, usage, and disposal to a circular route that involves instead extracting usable resources like energy, nitrogen, and phosphorous for reuse and conservation.

Investment opportunities include R&D related to bioaugmentation, hybrid technologies, and nanoparticle treatment.

IoT-Based Precision Irrigation Systems: The use of IoT -based technologies to develop more efficient agricultural irrigation systems will help to increase crop yields while reducing water usage and supporting sustainability.

Investment opportunities include infrastructure, platform, and software development.

5G and AI-based Solutions: Researchers are exploring how to use A_-based technologies like Natural Language Processing (NLP) and Machine Learning (ML) to gather and analyze data, provide oversight, and streamline water resource management. Technologies like 5G are able to reduce latency and gather data from millions of sensors in real-time for more efficient water resource management.

Investing in these and other emerging water technologies is essential to address issues of water insecurity.

Final Thoughts

Many of the problems facing us are man-made. Although climate naturally fluctuates over time, our actions are accelerating the deterioration of the resources needed to sustain life.

In addition to individuals, corporations, and governments doing their part to preserve our natural resources and limit or reduce our impact on the planet, tech solutions will be necessary to mitigate the damage.

To learn more about sustainability and the benefits of investing in water technology, get in touch with us to review your options today.

July 10, 2023

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