Water, the new gold

2012 was a year of big bets. Facebook went public, valued at more than $100 billion. Coca-Cola topped the leaderboard for the world’s most valuable brands. Landmark buildings were completed, including Princess Tower in Dubai Marina, the tallest residential building in the world until 2015, and the towers of the JW Marriott Marquis Dubai, the tallest hotel in the world until 2018.  

That year, MarketWatch ran the story “Water is the new gold, a big commodity bet.” “Is water the gold of the 21st century?” the article asked. Yes, it concluded. “Water is the New Gold for investors this century.”

Looking back more than a decade later, hindsight is 20/20. We may wonder why there wasn’t more fanfare or fuss over water. But given disruptions in sectors including gas and oil, superstorms and other momentous news, many of us had our attention elsewhere. 

Some, however, were fully aware of water’s implications for every industry, person and company on the planet. For every dollar invested in water and sanitation, for example, the UN reported a four-fold return in costs could be realised.

Riptides of demand

True to decades past, the key driver for water’s rising value today is demand. Surging population needs are outstripping existing water supplies. In 2012, the global population was roughly 7 billion people. Today, it’s risen to 7.6 billion, expected to increase to 8.6 billion in 2030, 9.8 billion in 2050 and 11.2 billion in 2100, according to the United Nations.

As global freshwater supplies dwindle, the undercurrents of water scarcity are becoming substantial tides. A 40% shortfall is predicted globally as early as 2030, commanding the attention of companies, industries and investors alike.

Weighing the risks + rewards

How significant are the stakes for water security? Already, companies in key industries are losing billions. As reported by CDP, $15.5 billion has been stranded or is at risk. 

The plus side? $2.3 trillion in commercial opportunities could be unlocked — if the private sector acts on water security.

Regionally, the GCC is home to four of the six most water scarce countries in the world. With this reality, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE are working to address water scarcities, investing in sustainability technology, projects and initiatives.

From an industry standpoint, water-intensive sectors including food, beverage, apparel and tech are under pressure to act. Not only from a procurement standpoint, but also from investors’ directives. Investor-led efforts such as the Valuing Water Finance Initiative task corporations with water stewardship and action, aligned with the UN’s 2030 Sustainable Development Goal for Water.

As water stewardship becomes more urgent and central to all industries and sectors, investors including Tau Capital are actively shaping the future. Tau Capital’s recent investment in A1RWATER, as an example, is fueling water innovation, transforming water usage in areas including hospitality, retail and education.

A worthwhile investment

A new approach — in short, forgoing business as usual — is needed to address urgent water challenges. Embracing technologies that increase sustainable water access and utilisation are key.

From tiny droplets of clean water to enough water to fulfil substantial needs for large organisations, properties, acreage, industries, cities and regions, atmospheric water generation technology is helping to address water scarcity at scale. Beyond water production capacity, air-to-water generators offer notable benefits including:

• Less water waste, lower power consumption and reduced CO2 emissions
• No need for chemicals given water doesn’t come in contact with the ground or pipes
• Reduced infrastructure and transportation costs due to decentralised solutions
• No need for single-use plastic

A new era for water innovation

As we look back on the last few decades and forward to the future, it’s an exciting time for water innovation. Investing in groundbreaking technology can benefit us all. No matter if you’re allocating minutes or millions, every effort makes a difference.

Interested in learning more? Contact us today.