Restoring our Earth starts with water.

By Laney Beaman, Investor Relations Manager at WaterEquity

Today is Earth Day and celebration is in order — but if I’m being honest, I celebrate with mixed feelings. I’ve always carried a deep admiration for Mother Earth, and yet, I am filled with angst and urgency around the lack of action to protect our only home. The fact remains we are not on track to lower our carbon emissions to stay under the threshold of 2 degrees Celsius or achieve the United Nations Sustainable Development Goals (SDGs) by 2030. At bare minimum, these facts are daunting. A large part of this failure can be attributed to a lack of investment in climate action — including the water and sanitation sector — from the private capital markets. Beholden to the status quo, the wealth management industry is just beginning to pivot to include social impact alongside financial returns. Why the change in strategy you may ask? With the largest wealth transfer in economic history underway, the millennial generation is more concerned with positive social outcomes than making a healthy return, and private markets are playing catchup to offer adequate options to this drastically different clientele.

Here at WaterEquity, we are correcting this market failure by providing investors viable options in the water and sanitation sector. Our mission is to solve for SDG 6–access to safe water and sanitation for all. And so, this is where hope creeps in and level-sets the worry, because there is not only tremendous opportunity to solve for the water and climate crisis that so many people around the world face, but simultaneously create more sustainable systems that contribute to a healthier planet.

As an impact investment manager, WaterEquity raises funds and then deploys that capital to financial institutions and enterprises expanding water and sanitation services to low-income communities. In the case of investing in enterprises this can include water service providers, infrastructure systems, or fecal sludge management. For financial institutions, our investment is used to offer small, affordable loans to low-income consumers to install a piped water connection, toilet, or both within the household. Whatever the solution purchased, the choice is the clients — more often a woman than not — and that choice can be empowering and life changing. When you look at solving for universal access to water and sanitation, you recognize that water underscores each of the other 17 SDGs — from health, to education, to peace and justice, to name a few. Water is the powerhouse of our planet and a natural change agent. Restoring our Earth starts with water.

Let’s pause to define what we mean when we talk about the water and climate crisis: 1 in 3 people lack access to proper sanitation and 1 in 9 lack access to a safe water source. This leads to environmental challenges that quickly add up. To name just a few:

1. In the context of open defecation, discharge of untreated waste negatively impacts water quality by damaging aquatic ecosystems and contaminating drinking water supplies.
2. Typical water and sanitation infrastructure, which is antiquated and inefficient, requires high levels of energy use for pumping and wastewater treatment, incurs significant water loss through leaky pipes, and is a contributor to greenhouse gas emissions.
3. Water scarcity — “By 2050, 40% of the world’s population is projected to live under severe water stress due to climate change and increased urbanization.” The OECD Environmental Outlook to 2050 (2012).

Squaring up to these challenges presents obvious solutions:

1. By offering communities the opportunity to take out a small loan to install a toilet or investing in sewage and fecal sludge management, WaterEquity’s funds increase the number of families living in poverty with safely managed sanitation, reducing water pollution and increasing water quality.
2. By investing in energy efficient water and sanitation infrastructure that increases resource recovery, WaterEquity’s funds help build more sustainable infrastructure that reduces greenhouse gas emissions.
3. WaterEquity’s funds invest in solutions to address water scarcity, including better management of existing resources — reducing waste and reusing wastewater — or developing new infrastructure.

In just under five years, WaterEquity has reached 1.8 million people with access to safe water or sanitation, and we are scaling our reach over the next few years to impact an additional 5 million people. By 2028, across our current funds, we expect to have ended this crisis for 11 million people through more than $200 million in investments into the water and sanitation sector.

With the demand to see positive social and environmental impact as a direct outcome of investment, coupled with a multi-trillion wealth transfer, capital markets can affect tremendous, positive change on a global level. And so I’m reminded there are many reasons to celebrate this Earth Day, knowing that day by day the most basic of human rights is being extended to those who bear the greatest burden of global crises, and that development within the climate action and water and sanitation sector is prioritizing planet and people over profit.

“If there is magic on this planet, it is contained in water” — Loren Eiseley, The Immense Journey (1957).

Laney Beaman is Investor Relations Manager at WaterEquity. She is responsible for strategic partner research and creates effective methods to increase efficiency across the Investor Relations team while supporting a portfolio of WaterEquity’s collaborative partnerships. Laney brings 10 years of experience in program development, partnership building, communications, and event management. 

Guest Blog By: Alix Lebec, Founder and CEO at Lebec Consulting, & Katie Orr, COO at Lebec Consulting

What’s the first thing you do in the morning? Use the bathroom? Brush your teeth? Make coffee? Imagine if you walked up to the sink, turned on the faucet, and nothing happened. No clean teeth, no morning jolt. And the toilet isn’t even there. What would you do?

That scenario seems like a strange dream to those of us who won the birthright lottery. But for about 2.5 billion people around the world — roughly 35% of the global population — this is daily life.[1] And when you narrow that pool to women, it gets dramatically worse.

On this International Women’s Day, we’re highlighting the compound issues women face alongside the global water crisis — as well as scalable, innovative solutions to solve one of the world’s biggest challenges. This is our call to action for governments, philanthropists, and capital markets to come together to create real systems change. As Greta Thunberg says, “we cannot solve a crisis without treating it as a crisis. And if solutions within the system are so impossible to find, then maybe we should change the system itself.”

Women and Water are Inextricably Linked

For women, the water crisis extends far beyond morning discomforts — and it’s deeply personal. Over the course of a woman’s life, the water crisis becomes a crisis of education, economics, personal safety, dignity, and health.

In fact, in the current environment, from the day many girls in developing countries are born, their future is already decided for them. One in five girls of primary school age will forego an education, and spend up to six hours a day either walking with their mother to gather water from a distant natural source, or standing in long lines to gather water from a local tap — which will more than likely run dry before they get their turn.[2] Collectively, these women and girls spend 200 million hours each day finding and bringing home water.[3]

In practical terms, this creates an irreversible domino effect:

→ If a girl doesn’t go to school, she doesn’t get an education.This disproportionately affects her as she grows into womanhood, and faces challenges securing a job or starting a small business.

→ This affects her ability to contribute to the income of her family — which, by extension, limits the financial ability of that family to secure a safe water connection — and she ultimately may end up following the same path as her mother.

→ In this daily quest, if her family ingests contaminated water from a ground source, she faces the compound issue of caring for children with major illness — the cure for which is often, ironically, clean water. (Tragically, 6,000 children die every day from waterborne and sanitation-related diseases, including diarrhoeal disease and malaria.[4] Further, one million people overall die unnecessarily each year from preventable water-related diseases.[5])

→ All of this means that the local economy suffers as well, without the valuable contributions of women who are willing and able to work — but instead tied to this daily burden of gathering water. If all women were able to work, it is projected that global GDP would rise by $28 trillion annually.[6]

As of now, the options for so many women in these developing countries are non-existent. Families desperately need water, as much as they need air. They need it for drinking, cooking, sanitation, and hygiene — in essence, basic survival. In this era of global pandemics and droughts induced by climate change, this has never been more vital and urgent.

Further, we often fail to consider the myriad of other devastating nuances that affect women throughout their lifecycle due to the water crisis. For instance, if a girl approaching puberty and entering menstruation is fortunate enough to attend school, but there is no piped bathroom available, this creates a humiliating situation. Often, girls opt to stay home anyway, for this reason alone. Or, for instance, if a woman needs to relieve herself in the middle of the night, but has no facilities, she is forced to go out in the dark and search for a space outdoors. This leaves her open and vulnerable to unsafe scenarios. And in the daylight, this act of defecation in an open field takes away every bit of a woman’s dignity.

The Good News

Just as these two crises — gender inequality, and the lack of access to clean water and sanitation — compound each other, the solutions are symbiotic. Women are the key to solving the water crisis, and we’ve already seen this unfold. Over 90% of low-income clients taking out small, affordable microloans to pay for improved water and sanitation solutions in their homes are women. And these microloans continue to be repaid at the rate of 97–99% within 12–24 months.

The global non-profit Water.org — which pioneered this model of microfinance for water and sanitation — has continued to demonstrate tremendous scale and progress. So far, they’ve successfully helped 33 million people with this approach. And WaterEquity — a global asset manager launched by Water.org — greatly magnified this solution by bringing impact investors to the table. This has ultimately helped financial institutions in India, Indonesia, and Cambodia scale their water and sanitation microloan portfolios for people living in poverty — with women representing 93% of microloan recipients.

This trend of women being a force for effective change is reflected all the way up the decision-making ladder. Whether in positions of leadership across governments, businesses, financial institutions, start-ups, or local communities — women reinvest more in their communities and families. And they actually outperform many of their male peers.

Addressing global gender inequality cannot be accomplished without clean water for all. And ensuring equitable access to clean water and sanitation cannot be accomplished without empowering and elevating women in their communities — and in decision-making roles across every industry.

The Path Forward: Venture Philanthropy and Global Capital Markets

Traditional philanthropy alone is not going to solve this crisis. To begin chipping away at such a massive issue, we need to vastly multiply the amount of capital allocated to its solutions. If we can effectively leverage capital market forces, we have the ability to make great strides in the water crisis and, by extension, the women’s crisis.

Above all, it is critical that philanthropists and impact investors begin to recognize two key truths:

1. Global capital markets are imperative — and should be used as a force for good. Currently, due in large part to The Giving Pledge, we know that 216 of the wealthiest individuals across 24 countries have pledged to give at least half of their wealth to charity — representing approximately $600 billion. In America alone, billionaires added $1 trillion to their collective wealth since the start of the global pandemic.[7] So, the opportunities to donate and invest are there in excess. But in order to harness the power of capital markets and make a great impact, we must make mainstream philanthropy more akin to venture philanthropy. This means fostering a philanthropic mindset that accepts necessary-yet-calculated risks to achieve the results that we know are possible — supporting models and solutions that ensure institutional capital becomes an accelerator of social justice. In other words: venture philanthropy.

If you look at any successful investment portfolio out there, particularly in private equity, investing patient capital with a manager you trust — and taking commensurate risk for the performance you want to achieve — is par for the course. In order to create monumental change — and really move the needle on the issues affecting our people and planet — we need to think along the same lines within philanthropy, and address the source of global challenges.

This is the most effective way to achieve maximum impact and scale. And, importantly, it removes obstacles — ensuring that people can help themselves, and making the model highly sustainable. After all, people living in poverty are not a problem to be solved, but a market to be served.

2. Philanthropy and impact investing today should be in the business of systemic change. Few funders are willing to “go big.” In most cases today, they focus on funding specific initiatives, rather than providing unrestricted funding to innovate, scale, and generate systems change. Instead, philanthropic grant-makers need to focus on funding ideas that address issues at their source, and challenge the very systems that continue to reinforce inequality. Catalytic impact from a capital standpoint — as well as systemic change — is where you want to live within philanthropy. That’s what will make you stand out from the rest and allow you to do something transformative. Grantmakers need to stop tracking dollar for dollar and maintaining the status quo. Instead, they need to recognize that the markets to be served are out there in full force — and the people embedded in those markets are ready and willing to participate, and be the change they so desperately need.

With that in mind: While it is inspiring to see more and more foundations, corporations, banks, and ultra-high-net-worth individuals venture into social impact investing and/or step up their commitments — we believe there is so much more to be done. Importantly, we need philanthropic support and investment capital that matches the scale of these issues and solutions — and that requires the willingness to think bigger, and take calculated risks. When philanthropists and investors marry what matters to them with what’s needed across the globe, they can maximize their impact — both near and far.[8]

Perhaps most importantly, we need more women in decision-making roles to revolutionize this change. Because we cannot talk about female empowerment and reducing gender inequality without first discussing how we will solve the global water crisis.

About Lebec Consulting: Lebec Consulting specializes in helping corporations, foundations, social entrepreneurs, and high-net-worth individuals achieve their greatest social impact through strategic philanthropy and impact investments. With sustainability, innovation, and systems change at the center of our strategy, we think outside the box and look beyond traditional philanthropy. Our goal is to provide these key stakeholders with the best possible roadmap to achieve impact in ways that will truly reverse the tides of global inequality.

The COVID-19 global pandemic highlights the critical need for increased investment in safe water and sanitation for all.

By Elan Emanuel, Director of Investor Relations at WaterEquity

Water and sanitation are basic, but indispensable, first lines of defense in combating the spread of the COVID-19 pandemic. If you don’t have water, you can’t wash your hands. If you have to use a shared toilet facility, you can’t practice social distancing. Yet today, 1 in 9 people lack access to safe water, and 1 in 3 don’t have access to decent sanitation. That’s 2.5 billion people living without access to these basic necessities that could help curb the spread of disease in some of our most vulnerable populations.

Through our work in India, we’ve seen the entire lifecycle of government lockdowns due to COVID-19 and how they’ve affected the livelihoods of underserved communities. For example, millions of people rely on shared sanitation facilities or open fields as their main options — exposing themselves not only to COVID-19, but also to communicable diseases such as cholera, diarrhea, dysentery, hepatitis A, and typhoid. Families without a toilet in their homes take extraordinary health risks to meet fundamental needs.

Illustrative example used with permission from WaterEquity’s sister organization, Water.org.

Imagine dropping out of school or being unemployed because your time and energy is needed to secure water for your family.

By Alix Lebec, Former Chief Investor Relations Officer, WaterEquity

Globally, women and girls spend six hours daily collecting water for their families. That’s why 1 in 4 girls in developing countries don’t finish elementary school. With access to safe water and access to toilets, girls can stay in school and women have time to go to work, build their own businesses, and contribute to the development of their families and communities. 

Put simply, investments in water and sanitation are investments in women.

Let me introduce you to Chim Chany, an entrepreneurial woman I met in Cambodia. With a daily income of $2–8 a day, her family struggled to pay the $26 a month needed for an un-safe water connection contaminated with arsenic. It shouldn’t come as a surprise that drinking this contaminated water caused her family to become frequently ill. Seeing this, Chim Chany decided to take the matter into her own hands and change her family’s circumstances. She met with a local microfinance bank and took out a small loan to pay for the construction of a safe water connection in her home.

The results are impressive — Chim Chany easily repaid her loan in one year, her monthly water bill is now $7, and her family is no longer sick. She now runs her own business and sends her children to school.

Chim Chany’s experience and the $12 billion in demand from families living in poverty for access to affordable financing to meet their water needs inspired the launch of WaterEquity. As an impact investment manager, WaterEquity’s funds invest in water and sanitation enterprises that serve women like Chim Chany.

In emerging markets, 55-68% of small and medium-sized enterprises are underserved by financial institutions and lack financing to expand their coverage. WaterEquity’s funds fill this gap by investing in microfinance institutions, micro-utilities, toilet manufacturers, and water purification and sales kiosks.

By investing in WaterEquity’s funds, investors like— Bank of America, Ceniarth LLC, Niagara Bottling, OPIC, the Conrad N. Hilton and Skoll Foundations— are investing in women.

How?

Without access to safe water and proper sanitation, women and girls are bound to a life that entails spending hours securing water for their families, dropping out school, and risking their safety and health when looking for a place to go to the bathroom.

Investments that enable women and their families to have access to safe water and sanitation not only fuel economic growth, but also ensure these communities can prosper and have a healthier future. With this in mind and a strong pipeline of investable deals, WaterEquity has invested $11 million in microfinance institutions in India through its first Fund, already repaying investors last year with a higher-than-expected annual distribution payment of 3.6%. It also most recently launched a $50 million Fund that will impact 4.6 million lives in Asia, and is well positioned to reach those living in poverty.

The more investment we bring on board, the more people we reach. And the more people we reach, the closer we get to a world in which everyone, by 2030, has safe water—and all the opportunity that flows from it.