By Theany Bazet, Fund Manager
As one of the most vulnerable groups, children living in fragile situations are four times more likely to lack access to drinking water1. Children may also come into contact with contaminated water more often than adults in the course of their play activities of swimming, as well as being charged with a task of collecting and brining water home. UNICEF has warned that in countries beset by violence, displacement, conflict and instability, children’s most basic means of survival – clean water – must be a priority2. But even in places not torn by war and conflict, the situation is worrisome and is getting worse.
In Ukraine, bravely defending itself from Russian aggression, one of the key priorities of the UN Children Fund (UNICEF) is ensuring access to safe water and to families on the move. The war has exploded into a dramatic humanitarian crisis of international proportions, posing an immediate and growing threat to the lives and wellbeing of the country’s 7.5 million children. Hundreds of homes have already been damaged or destroyed and damage to civilian infrastructure has left hundreds of thousands of people without safe water or electricity.
Horrific and cruel as the war in Ukraine is, children are always the most vulnerable most badly affected in almost any hostile situation, whether it is a war, famine or discrimination. Every child is born with the same rights but it is still a long way to go before we can all be confident that these rights are honoured and respected. This is having a very significant negative impact on the lives on many children when they become adults because childhood is the most significant period of personal development - physical, cognitive and emotional. Children are more vulnerable than adults to the effects of poverty, malnutrition, inadequate healthcare, lack of access to essential resources such as clean water, and environmental pollution.
A precious resource, a source of all life
Together with food, clean water is essential for children’s healthy development process. However, infants and young children have higher water requirements than adults, in part due to greater insensible water losses from skin diffusion3. Dehydration, when the body loses more water than it takes in – can cause irreversible harm to the physical and mental development of a child.
Investors will have a part to play as they join companies, governments and international organisations in the effort to fulfil the United Nations Sustainable Development Goals (SDGs), which have the central objective to “leave no one behind” by 2030. Only by giving every child the means of reaching their full potential can we build a more resilient, fair and prosperous society for everyone.
COVID-19 reinforced inequality
As the pandemic pushed the global economy into a lockdown, almost all of the water sector improvements and funding was put on hold. For most developing countries this was a more serious hit because their water supply systems are far less reliable operationally than those of their developed peers. COVID-19 hit to an already long list of serious problems related to public health, such as low access, water’s quality, low standards of sanitation and bad hygiene. This lethal mix in the developing world makes infections easier to spread and each of its elements excoriates another4.
The human right to water and sanitation has yet to become a reality for one-third of the global population: 2.1 billion people still do not have access to safe drinking water and 4.5 billion people still lack access to sanitation. Poor sanitation, water, and hygiene lead to about 675,000 premature deaths annually. According to UNICEF5, almost 1 in 4 children globally will live in areas of extremely high water stress by 2040.
Despite modern water supply techniques, access to clean water in some parts of the world is becoming not easier but more difficult. In addition to rapid population growth, urbanisation, water misuse and mismanagement, among the main reasons are, increasingly, climate change and extreme weather events.
Investment solutions
Governments have a strong budgetary incentive to support investments in water infrastructure. According to the World’s Health Organization (WHO), every dollar invested in water and sanitation saves USD4.3 on health care costs that would have been spent to treat illnesses caused by these problems if left unresolved. There is also an economic rationale, as investing in water infrastructure creates jobs, improves public health, protects the environment and supports a variety of sectors.
So what type of solutions should be considered from the investment perspective? Clearly, there are leading utility companies and infrastructure companies that work to deliver clean water to those who need it. But there are also innovative businesses, for example developers of filtration systems enabling for treated water to be re-introduced safely into consumers’ water cycle.
One example is Advanced Drainage Systems, a US based producer of filters, water separators, various types of pipes, drainage solutions and other water-related products. With extreme weather conditions across the globe, the need for water management systems, being able to redirect and avoid (or resolve) flooding, is higher than before and this has been shown in Advanced Drainage Systems benefitting from good growing trends and demand for its products.
Another example, Pentair, is a leading US-based global water treatment company which developed a very comprehensive range of smart water solutions. Since 1998, they set up a philanthropic arm which leverages the firm’s know-how and products to provide clean water to people in vulnerable areas.
Similarly, Veolia, a French transnational water management, waste treatment and energy supplier, has been partnering with UNICEF and Medecins sans frontiers through its charitable Veolia Foundation on a number of their projects to foster access to clean water in emerging countries.
Over the past few years, Xylem, a global water technology company working in over 150 countries, has provided financial support as well as critical supplies for UNICEF’s Covid-19 water, sanitation and hygiene (WASH) project for children through its corporate citizenship programme Xylem Watermark.
Global efforts to improve the lives of children worldwide have so far been almost exclusively in the hands of governments, regulators and international organisations. Increasingly, market forces start to play an important part too and investors, as part of that equation, can help drive a positive change.
1 https://www.unicef.org/philippines/press-releases/more-180-million-people-lack-basic-drinking-water-countries-ravaged-conflict-or#:~:text=People%20living%20in%20fragile%20situations,and%20World%20Health%20Organisation%20analysis.
2 http://un.org/sustainabledevelopment/blog/2017/08/childrens-access-to-safe-water-and-sanitation-is-a-right-not-a-privilege-unicef/
3 https://www.hydrationforhealth.com/en/hydration-science/hydration-lab/water-intake-and-hydration-physiology-during-childhood/
4 https://www.brookings.edu/blog/the-avenue/2020/10/20/the-hidden-role-of-water-infrastructure-in-driving-a-covid-19-recovery/
5 https://www.unicef.org/png/press-releases/nearly-600-million-children-will-live-areas-extremely-limited-water-resources-2040