Back on the Road: XPV’s David Henderson Shares Emerging Themes from the Global Water Summit and Impact Investor Global Summit

This May, I was pleased to participate and speak at the Global Water Summit in Madrid and the Impact Investor Global Summit in London. I have to admit it – after a long few years for all of us, it’s been great to return to conferences, catch up with old friends, and meet new people face to face.

At each of these conferences, there was a real sense of renewed energy, urgency, and anticipation. While the events targeted different audiences, the discussion was surprisingly similar, and participants kept coming back to a few key themes. Here are a few that stood out for me.

To solve the water crisis, we need “planetary” thinking.

Next to the urgent push to curb carbon emissions and manage rising temperatures (which is indeed critical), the need to manage the world’s water crisis receives much less airtime. And yet, the crisis is happening now.

For millions of people in America’s West, for instance, drought and water scarcity is a reality. As they grapple with increasingly lower levels in the Colorado River Basin, governments and utilities are being forced to make difficult and quick decisions about how to prioritize water use during a megadrought that doesn’t appear to have an end in sight. From farmers to energy producers to residents in homes, everyone is facing new restrictions and limits.

These challenges are not limited to the United States. Water shortages, water pollution, and extreme weather are having impacts on food security, energy production, supply chains, and the health of ecosystems worldwide. History has shown that civilizations end when people run out of water. We are at a tipping point.

Participants at both conferences agreed that we need global recognition of crisis. We need to elevate the discussion, take immediate action, and, to properly manage the crisis, we need to think about water as a planetary challenge, not just an issue for specific regions.

ESG is here to stay.

ESG is about risk management. Water powers our lives; it is a mission-critical input for everything we make and consume. The time is now for every business, government, and organization to recognize their exposure to water risks. To properly monitor and measure the risks associated with water, we must also build an efficiency framework that begins with the principle that water is a renewable resource for the entire planet – for ecosystems, for economies, and for people.

For any framework to make sense and have impact, we need to factor in two key aspects. First, we need to measure how much water we’re using in each of the processes that underpin all aspects of our lives, from doing laundry to growing food to making iPhones. We cannot become more water efficient unless we can properly measure our use. The good news is that we already have the tools we need. For example, Metron-Farnier uses high-resolution data to measure and understand water use at the system level, right down to when you flush a toilet. With this data in hand, communities are empowered to make smart decisions about efficient water use.

The second factor is water quality. Without it, there is no point in becoming more efficient. To optimize water quality, we need to measure and understand key inputs and outputs in water systems, whether it is the chemicals and energy we use to process water, or removing nutrients to prevent algae blooms from polluting rivers, lakes, and oceans.

We need to find a simple way to express this water efficiency framework on planetary scale, just as we have done with carbon and net zero. It all starts with water becoming part of everyone’s ‘E’ in ESG.

The technologies are available, but we still need new business models.

At both forums, participants were confident that the technologies, products, and services that we need to solve the water crisis are available. What’s lacking, however, is the adoption, financing, and business models that allow these solutions to permeate the market.

Given the mandate to supply safe and healthy water at the lowest possible costs, water utilities are innovative with their resources but traditionally conservative when it comes to trying new approaches. They cannot take on much risk, so we need to think differently about how to get the solutions to them effectively. Personally, I’m excited to see initiatives like Isle Utilities’ Trial Reservoir, which removes the financial risk of trying new technologies (for both the provider and the utility customer) and promotes the movement toward a “culture of innovation” within utilities.

Agreeing on the circumstances is one thing; working together to take action is another. At XPV Water Partners, we’ll continue to seek out and grow the best solutions and business models in the market and help them make a difference for water.