Growth opportunities in the water sector

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Thought leaders, experts and investors in the water sector indicate there are huge growth opportunities in the water space in the next decade.

Generally, water has not been an attractive sector as other emerging ‘green’ markets such as energy efficiency, renewable energy sectors, smart grid applications, construction and buildings’ efficiency, consumer products, and more. At the same time, adoption of new water technologies has been slow. However, today, venture capitalists are more open to fund water innovations.

The opportunities to improve water management and conservation will help us understand water usage and its value. The first step toward water efficiency requires data on current utilization, water resources, capacity and availability, alternative options (such as recycled water), etc. In other words, metering is fundamental.

When comparing the available water information residents have today to grocery shopping – it’s as if we buy food blindly, without knowing the prices of items, and them receive one bill at the end of the month with the total dollar amount… There are 70 million water meter devices in the US and they don’t capture enough data. Currently, there is a complete data void on water, unlike energy/power metering and data collection, which has 300 million meter devices in the US. Smart water metering is important and crucial for moving forward toward water efficiency and smart consumption.

Furthermore, we do not have information on real-time water consumption, the peaks in usage during a given day, the potential leaks along the pipelines, evaporation rates and their locations, changes in sediment particles, and more. There are areas in California (and other parts of the US) where water is being metered per area and not per building or residency, and users pay a flat rate. Advanced metering will enable every household and business to study their real-time usage, overuse, what they are paying for, potential leaks or flaws, and, perhaps, even purity levels at a given time.

A function of metering is the development and deployment of software tools in capturing, monitoring and managing water consumption, data collection, reporting, and analytics - for corporations, businesses and homes.

Water is emerging as a major concern for the 21st century. Read more about the water crisis and our challenges. In the next few years, companies will be expected to provide information about their environmental performance, including water utilization. The ability of businesses to effectively communicate their efforts would play a major factor with both consumers and stakeholders. Reporting offers businesses the opportunity to be transparent, demonstrate social responsibility, and build their brand equity.

In early 2010, the CERES organization released a report titled “Murky Water? Corporate Reporting on Water Risk." CERES is a national network of investors, environmental organizations and other public interest groups working with companies and investors to address sustainability challenges. CERES strives to achieve a sustainable global economy by integrating sustainability into capital markets for a healthier planet and communities. The organization also acknowledges best practices in sustainability performance and issues awards to businesses.
The CERES report benchmarked 100 companies’ water reporting and disclosure.

In April 2010, the Carbon Disclosure Project (CDP) initiated a new project: the CDP Water Disclosure, which will make available critical water-related data from key corporations worldwide. The data collected will present valuable insight into the strategies deployed by many of the largest companies on water and will be used to help drive investment towards sustainable water use, as well as provide the global market place with information on investment risk and commercial opportunities.

To collect the information, the CDP sent out a questionnaire to 302 companies in sectors that are widely considered as water intensive. Click here to see the list of companies selected for the study. The questionnaire asked about the risks and opportunities businesses face in relation to water, water consumption and utilization in the company’s operations and in their supply chain, their water management plans and governance. The report will be issued in the last quarter of 2010.

Thus far, the following responders companies have demonstrated their leadership on
transparency around water by committing to report to CDP Water Disclosure in 2010:
Ford, PepsiCo, L’Oreal, and Reed-Elsevier. To read about their commitments, click here.

Other technology advances in the water space are related to purity.
In the next several years, experts and investors foresee advances in water treatment, conservation, and wastewater management.

In addition to climate change, carbon emissions, and energy related policy, legislation in the water sector is crucial and, hopefully, will develop rapidly in the next decade. The government push with incentives will help us move forward, as well as public education programs on water issues, conservation, waste water management, and more.

Tags: Water issues, management, infrastructure, treatment, and status; water conditions, the problems; future of water management, technologies and investment; water misconceptions, myths, confusion; water business opportunities and innovations; emerging water sectors.