(ALL INTERNAL USES, LIMITED EXTERNAL USE, NO COMMERCIAL USE) Drop of water on leaf photographed in the Gondwana Link project area of Western Australia. Containing rivers, salt lakes. arid lands, mountains and ancient eucalyptus forests, the landscape of the Gondwana Link project area in south Western Australia is an extraordinarily rich and complex ecological mosaic containing some the world's most ancient habitats. Recognized as a top biodiversity hotspots, the mega-diverse Gondwana Link project area (situated in south Western Australia) contains an amazing 25 percent of the country’s plant species. Photograph taken for The Nature Conservancy's Desgin For A Living World project, exhibit and book. PHOTO CREDIT: © Ami Vitale
Drop of Water on a leaf photographed in the Gondwana Link © Ami Vitale

Mark Tercek

From Davos: Water Is a Valuable Asset – Let’s Treat It Like One

Mark Tercek Former Chief Executive Officer


Many communities around the world are running out of water.

When demand outpaces supply, communities often turn to difficult and costly solutions, such as building reservoirs, importing water or constructing desalination plants.

But this week at the World Economic Forum in Davos, Switzerland, I’m pushing global leaders to consider a different solution—one that could significantly accelerate progress on addressing the root cause of water scarcity around the world.

Let’s tap economic forces—the power of the market—to be smarter about how we use the water we already have.

By viewing water as a tradable asset, we can create water markets that encourage water users—such as cities, farms and companies—to be more efficient. The water saved can then be allocated for other uses.

With half the world’s cities and three-fourths of irrigated farms experiencing regular water shortages, it’s critical that we capitalize on the value created from conserving water.

My organization, the Nature Conservancy, is harnessing private capital through impact investing to do just that.

Impact investing—which allows investors to align their portfolios with their values by investing in initiatives that generate financial, societal and environmental outcomes—is emerging as a fresh source of funding for conservation projects.

With our impact investing unit, NatureVest, our global water experts and Australia team have created the world’s first water sharing investment partnership in Australia’s Murray-Darling Basin. Through that program, we’re working to raise $69 million of investor capital to help balance water use in the basin so there’s enough for farmers, communities and nature.

Acquiring land at the Murray River in Australia secured part of a habitat corridor key to several nationally threatened species, including the southern bell frog and the regent parrot.
Murray River TNC acquired land along the Murray River in Australia © Mark Schapper

Here’s how it works: A water sharing investment partnership acquires a portfolio of water rights and then collaborates with farmers, who buy and sell water allowances through a water rights trading system.

Through the program, scientists help farmers execute water-saving strategies, and farmers who conserve water can sell their remaining rights back to the program. The program, in partnership with local conservation organizations, then uses some of that saved water to restore degraded freshwater ecosystems. It leases back the remainder to water users, ensuring Murray-Darling farmers get the water they need while at the same time generating financial returns for investors.

In the Murray-Darling Basin, we—along with local nonprofit Murray Darling Wetlands Working Group—plan to use water saved through the water sharing investment partnership to restore more than 40,000 acres of wetlands during the next decade.

Not only will this wetland restoration benefit farmers and wildlife—such as frogs, fish, turtles and waterfowl—but it also will help preserve Aboriginal cultural and spiritual sites, many of which are located in the wetland areas.

This impact investment-driven solution to water shortages uses market-based strategies to encourage and reward smart water use. It generates environmental, financial and social benefits at a greater scale than philanthropy-funded efforts can while also supporting farmers and communities who rely on freshwater.

Graham Ginn, TNC Flint River Basin Program Director studies a pivot irrigation system which will be adapted to a variable rate system for the purpose of water conservation in a cotton field near Albany, Georgia.
Graham Ginn TNC's Flint River Basin Program Director helps to install an irrigation system. © Mark Godfrey

Impact investing can help conservation organizations scale up solutions to a variety of other problems, as well. For instance, NatureVest leverages private capital to accelerate sustainable grazing practices in Africa, prevent urban stormwater runoff in the U.S. and help island nations restructure debt in ways that help them adapt to climate change.

Embracing innovative solutions like these—and finding new sources of funding, such as impact capital—will be critical as global leaders leave Davos, ready to meet the world’s challenges head on.

Mark Tercek is the Former Chief Executive Officer of The Nature Conservancy, the global conservation organization known for its intense focus on collaboration and getting things done for the benefit of people and nature. He is the author of the Washington Post and Publisher’s Weekly bestselling book Nature’s Fortune: How Business and Society Thrive by Investing in Nature.

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