The recent water crisis that affected the southeastern region of Brazil, added to factors such as changes in the rainfall regime – effects of environmental and climatic impacts accumulated over decades of exploitation of natural resources by our society – indicate that difficulties in water supply They are a reality that is here to stay and that will require additional efforts and paradigm shifts to be faced.

However, once the risks become clearer and begin to impact our daily lives, they begin to gain importance and generate opportunities for the development of solutions, whether through studies on the efficient use of water resources, improvement and technological innovations. , such as water reuse, for example.

We are increasingly becoming more aware and creating spaces for initiatives that consider sustainable perspectives – social, environmental and economic – with the aim of improving water risk management.

In this article we will explain a little more about the investment opportunities for companies and financial institutions that want to become or invest in more sustainable and efficient businesses in relation to water use. Check out!

Why invest in the efficient use of water?

But, after all, how important is this for your business? Firstly, investing in technologies for water resource management can help your company reduce water consumption and use it more efficiently, resulting not only in a reduction in the volume consumed, but also in financial savings.

Secondly, by using this resource more efficiently, in the event of a crisis or reduction in water supply, your business becomes less vulnerable, reducing its dependence, including in relation to the public management of reservoirs and springs, even even avoiding possible conflicts of use. Obviously, for this scenario to be possible it is necessary to invest.

There are several technologies that can be applied, which involve different levels of financial effort and which, depending on the business, can have more or less impact on water use. Given the need to invest and reduce risks, the participation of financial institutions in encouraging the adoption of sustainable water management practices is crucial.

But how to finance this investment?

To increase its participation and evaluation of investments, it is essential for the financial sector to know which of the practical solutions that are being developed and/or implemented by the market are most effective, both from an economic and efficiency point of view. Based on this understanding, these institutions can carry out a survey on the viability of these technologies in terms of risks and benefits for the investor.

Will this investment pay off? Is it really possible to put this idea into practice? In fact, is it worth it? These are fundamental questions for the development of financial solutions in the area.

Fortunately, many financial institutions have begun to realize that environmental damage can have a significant impact on business by understanding, for example, how a water crisis could affect companies' loan repayment potential, which in turn would generate an economic risk for investors. The financial sector's growing concern about the risks involved with Natural Capital motivated CEBDS, in partnership with CHALK (Deutsche Gesellschaft für Internationale Zusammenarbeit), a federal German company, developing studies to understand the risk relationship that different sectors present in relation to natural capital.

Study results

As one of the main results, this study mapped the biggest risks in Brazil in relation to Natural Capital and saw that the biggest are associated with the agribusiness and livestock sector, due to the large emission of CO2. If there were a tax on this issue, these ventures would have great difficulty attracting investment if they were not suitable. This is what is happening with oil and gas companies that have lost value due to the negative impacts they have on the environment and climate. On the other hand, the tendency is for investments in the renewable sources segment to increase.

The same applies if you are a company heavily dependent on water for your production and today you find yourself in a river basin in crisis, both due to scarcity and water pollution. Your productivity would be affected and, consequently, your balance sheet, which would create quite a risk for you and investors.

Attractiveness of Technologies for Financial Institutions

Given the interest of companies and financial institutions in mapping technologies that could positively impact the management of water resources and, therefore, reduce the risk associated with reduced availability of the resource, CEBDS, again alongside GIZ, commissioned a study to understand which innovative technologies for better use of water would be more viable financially and in terms of effective gains from reducing consumption.

In the table below you can check the best investment opportunities, according to this study:

Efficiency in water use: opportunities for Companies and Financial Institutions

The study carried out by CEBDS and GIZ, mentioned above, presents 14 technologies used in the most representative sectors of Brazilian industry. The viability of the investments was analyzed, the level of implementation cost and the return time. Based on this data, it becomes easier to know whether the investment will be profitable for your business or not.

The document was presented to large corporations and serves as a reference for companies interested in growing sustainably.

If you want to know about investment possibilities, available technologies and what is being discussed among large companies in relation to the efficient use of water, download our e-Book “Efficiency in water use: opportunities for Companies and Financial Institutions”.