Photo via Jaymi Heimbuch
British-based risk consultancy Maplecroft has released a new report showing which countries have the most precarious and stable water supplies. The report is intended to help guide investors, underscoring just how serious water supply is getting when it comes to the world economy. From farming to manufacturing, investors in various industries are starting to seriously weigh where they put their money based on how secure water supplies are or will be, and companies with interests in areas with unstable water supplies are having to put water efficiency in a place of priority. Though it focuses on areas of risk, the report also reveals whole new areas in water where investors may want to pile in funds. Reuters reports, "African nations led by Somalia, Mauritania and Sudan have the most precarious water supplies in the world while Iceland has the best, according to a survey on Thursday that aims to alert companies to investment risks... A "water security risk index" of 165 nations found African and Asian nations had the most vulnerable supplies, judged by factors including access to drinking water, per capita demand and dependence on rivers that first flow through other nations."
Image via Maplecroft
Maplecroft writes, "The index is one of over 100 created by Maplecroft to identify risks across supply chains, operations and investments of multinational companies and has been developed by measuring the four key areas surrounding the issue. These include: access to improved drinking water and sanitation; the availability of renewable water and the reliance on external supplies; the relationship between available water and supply demands; and the water dependency of each country's economy."
Water wars and civil upsets are a real concern in areas where supplies are slim. For instance, CEO of Maplecroft Alyson Warhurst warns, "The fact that Pakistan and Egypt are amongst the most vulnerable nations should send a signal to investors who will need to develop water conservation and security strategies and be mindful of their water use impacts on local communities. These countries also have some of the highest population growth rates in the world, especially around cities, so there is an urgent imperative for renewed policy action underlined by these results."
This is a big warning to companies with interests in these areas that they need to minimize their water footprint, and fast. Also, while this could mean investors direct funds elsewhere for some industries, it simultaneously uncovers new areas of investments for water efficiency and generation. The study points out that 70% of fresh water consumption goes into irrigation. So, more intelligent irrigation techniques and supplies for farming, water generation and purification technology, and other possibilities for investors are opening up.
Even in areas with strong water supplies, investing in smart water grid technologies is proving to be a brilliant area to invest -- experts are pegging it to be a $16.3 billion industry over the next 10 years.
According to the report, water stress was not only a problem in poor nations. The US and Australia are some of the most notable wealthy countries with major water woes. Bulgaria, Belgium and Spain are also feeling the stress of the water crisis.
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