Investments aligned with this Strategic Goal aim to ensure that rivers and aquifers have enough water to maintain environmental health while also meeting essential human needs.
The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.
At least one-third of the rivers, lakes, and aquifers on our planet are being over-exploited (10). Altered water flows in freshwater ecosystems are a leading reason freshwater species are imperiled, with the average abundance of populations declining 83% between 1970 and 2014 (16).
The magnitude, frequency, duration, timing, and rate of change of water flow in these habitats derives from a combination of surface water, soil water, and ground water (9). Ensuring that sufficient water flows are available to sustain the health and productivity of freshwater ecosystems while meeting a variety of human uses—often called ‘environmental flows’—requires:
To secure ecologically sustainable river flows, investments can:
More than three-quarters of the water that naturally replenishes hydrologic systems around the globe is consumed for human use, damaging freshwater and estuarine ecosystems and leaving many farms, cities, and industries at serious risk of water shortages during droughts (10). Besides leading to the direct loss of aquatic species, water depletion degrades entire ecosystems that provide critically important services on which human societies and economies depend (10). The removal of water from freshwater or estuarine ecosystems can degrade their functional capabilities, greatly diminishing or even destroying the ecosystem services they support (10).
Freshwater and terrestrial ecosystems: River ecosystems often require variability in flow quantity, quality, timing, and duration (2). For example, flooding may be needed to maintain fish spawning areas, fish migrations may require specific flows, and ecosystems may need flushing to wash down debris, sediment, or salt (2). Investments to manage flow can help these ecosystems to thrive.
Meanwhile, terrestrial plants rely on water not only from precipitation but also from soil moisture; good land use practices can support the natural rates of water infiltration to be used by plants or to replenish groundwater systems. Animals in forests, woodlands, and grasslands rely year-round on the water in rivers, lakes, wetlands, and springs, especially during dry seasons and drought. Keeping more water in freshwater systems can help these species survive periods with reduced precipitation, periods which will become more frequent in the future due to climate change.
Indigenous communities and tourism: Healthy rivers and their associated ecosystems have intrinsic value and cultural significance to many people, particularly in indigenous cultures (2). This value is often overlooked because it can be difficult to identify and quantify. Lack of water from consumptive use that exceeds the limits of renewable water supplies can also harm the recreation and tourism industries.
Agriculture and fisheries: Avoiding consumptive use of water that exceeds the limits of renewable supplies helps farmers avoid water shortages and the resulting economic loss (2). Furthermore, millions of vulnerable people around the world depend on inland (freshwater) fisheries, and insufficient freshwater inflows can suppress the populations of nearshore and estuarine fish and shellfish (4, 10).
Energy sector: Maintaining the quantity and quality of water flow guarantees energy security in locations that heavily rely on hydropower. Protecting existing resources can also reduce the need to develop new hydropower assets that may have adverse environmental impacts.
While necessary flows in freshwater systems support important services for people everywhere, systems in water-stressed regions are especially at risk. Water shortages are much more likely in regions where existing levels of consumptive use are nearing or exceeding the limits of their renewable water supplies (10). Some of the largest rivers in Asia, North America, the Middle East, and Australia are already exploited to near exhaustion, and one-third of the largest aquifers on the planet are being rapidly depleted (10). Over 70% of the net loss in surface waters is concentrated in just five countries in the Middle East and Central Asia (16).
The largest declines in freshwater species populations have been in Latin America and the Caribbean (94%), the Indo-Pacific (82%) and sub-Saharan Africa (75%) (16). The Middle East, the western United States, southern Europe, southern Australia, Chile, Argentina, and southern Africa are experiencing the heaviest levels of water depletion; climate models predict substantial decreases in water availability in these regions over the rest of this century (10). Latin America is particularly vulnerable to changes in water availability because it heavily relies on water for its electricity production.
Many countries and states manage water under the “beneficial use” doctrine, which strips the rights to use water if that water is not beneficially used (2). Legal and regulatory systems do not recognize in-stream or ecosystem uses as “beneficial,” which perversely prevents water users from maintaining minimum or environmental water flows for rivers and streams (2). Reversing this often requires legislative action (2). Other countries and states do not prohibit the dedication of water use rights to in-stream or ecosystem uses, and a minority of these have water markets to allow trading of use rights.
In addition to formal trading markets, new approaches are being explored that allow private investments to circumvent perverse incentives in regulatory systems and a lack of enabling conditions for formal trading markets. These include water use leases, dry-year option agreements (3), and catchment-level investment plans aimed at cumulative water impacts (17). Without investments made explicitly to secure minimum or environmental flows in rivers or to restrict groundwater extraction, many catchments will likely see their flows divided among competing human uses until remaining water no longer supports critical ecosystem functions. Legal and public policy changes may only occur after such a crisis.
Approximately 35% of catchments around the world are chronically depleted. (10). Irrigation comprises more than 90% of water consumption in water-scarce regions, and non-renewable groundwater supplies 20% of this water (10). Despite this overuse or overallocation of water resources in many places, OECD expects global water demand to increase by 55% by 2050, driven by both demand- and supply-side pressure: economic development, population growth, deteriorating water quality, and climate change (7, 8).
The amount of change will depend on the level of competition for water use in the catchment, whether uses are regulated, and the health of the ecosystems receiving dedicated water flows (2). With significant competition for consumptive water use in the catchment, enforceable regulation is critical to ensuring that conserved water stays in rivers and streams to maintain ecosystem health. Without this regulation, water risks being redirected instead to another consumptive use elsewhere in the catchment.
Similarly, if the health of ecosystems in the catchment has significantly deteriorated, restoring flows to rivers and streams may be insufficient to return ecosystems to healthy function. For example, in some cases, improving soil, reducing pollution, or protecting and restoring instream habitats may also be needed to restore the health of a river (2).
Governance of water resources is key, as watersheds with river basin committees and enforcement of regulation will receive larger and more sustained impact from investment. Benefits to ecosystems and to the people who rely on them, either directly or indirectly, will last as long as dedicated or otherwise secured flows for rivers and streams in the catchment are maintained, assuming the introduction of no additional negative impacts.
Impact risks that may be associated with investments aligned with this Strategic Goal include:
External risks are likely to keep investors from accessing investment opportunities in existing regulatory systems or functional water markets. Evidence, unexpected impact, or execution risks can lead investments to unintentionally contribute to negative environmental, economic, or social harm for stakeholders or environmental functions in the catchment that were not properly evaluated or understood.
The Nature Conservancy of Australia established the Murray–Darling Basin Balanced Water Fund, which, in partnership with Kilter Rural, invests in permanent water rights in the Southern Murray–Darling Basin (6). The fund generates income through the lease of Water Entitlements to irrigators and through the sale of available Water Allocations to irrigation businesses across the basin. When water is scarce and agricultural demand is higher, more water rights are allocated to agriculture. When water is abundant and agricultural demand is lower, more water rights are allocated to wetlands. In dry years, a minimum of 10% of water allocations received by the fund are donated to environmental watering. In wet years, a maximum of 40% is donated. Between 2016 and 2018, the Murray–Darling Basin Balanced Water Fund acquired 8.8 gigalitres of water and helped return 2,500 megalitres to wetlands in the basin covering 55 hectares. The first wetland inundated recorded increases of 800% in aquatic plant diversity, 135% in bird diversity, 250% in bird abundance, and 46% in tree canopy health (12).
Alexandra, Jason. “Evolving Governance and Contested Water Reforms in Australia’s Murray Darling Basin.” Water 10, no. 2 (January 2018): 113. https://doi.org/10.3390/w10020113.
Dyson, Megan, Ger Bergkamp, and John Scanlon, eds. Flow: The Essentials of Environmental Flows. 2nd ed. Gland, Switzerland: International Union for the Conservation of Nature (IUCN), 2008.
Culp, Peter, Ricardo Bayon, Jason Scott, and Tom Melton. Liquid Assets: Investing for Impact in the Colorado River Basin. New York: Encourage Capital; Phoenix, AZ: Squire Patton Boggs, 2015.
Fluet-Chouinard, Etienne, Simon Funge-Smith, and Peter B. McIntyre. “Global Hidden Harvest of Freshwater Fish Revealed by Household Surveys.” Proceedings of the National Academy of Sciences 115, no. 29 (July 17, 2018): 7623–28. https://doi.org/10.1073/pnas.1721097115.
Bennet, Genevieve, and Franziska Ruef. Alliances for Green Infrastructure: State of Watershed Investment 2016. Washington, DC: Forest Trends’ Ecosystem Marketplace, 2017.
Kilter Rural and The Nature Conservancy Australia. Information Memorandum: The Murray-Darling Basin Balanced Water Fund. Bendigo, Victoria: Kilter Rural, October 25, 2017.
OECD. Water Resources Allocation: Sharing Risks and Opportunities. OECD Studies on Water. Paris: OECD Publishing, 2015. https://doi.org/10.1787/9789264229631-en.
OECD (2017), Groundwater Allocation: Managing Growing Pressures on Quantity and Quality, OECD Studies on Water, OECD Publishing, Paris. https://www.oecd-ilibrary.org/environment/groundwater-allocation_9789264281554-en
Poff, N. LeRoy, J. David Allan, Mark B. Bain, James R. Karr, Karen L. Prestegaard, Brian D. Richter, Richard E. Sparks, and Julie C. Stromberg. “The Natural Flow Regime.” BioScience 47, no. 11 (December 1997): 769–84. https://doi.org/10.2307/1313099.
Richter, Brian. Water Share: Using Water Markets and Impact Investment to Drive Sustainability. Washington, DC: The Nature Conservancy, 2016.
Roundtable on Financing Water. “Discussion Highlights and Roadmap for Future Work.” Inaugural meeting of the OECD-WWC-Netherlands Roundtable on Financing Water, Paris, April 12–13, 2017. https://www.oecd.org/environment/resources/Roundtable-on-Financing-Water-inaugural-meeting-summary-and-future-work-final.pdf.
The Nature Conservancy Australia. Impact Report 2018: A World where People and Nature Thrive. Carlton, Victoria: The Nature Conservancy, 2019.
“Environmental Flows Methods and Tools.” Conservation Gateway, The Nature Conservancy. https://www.conservationgateway.org/ConservationPractices/Freshwater/EnvironmentalFlows/MethodsandTools/Pages/environmental-flows-metho.aspx.
“How Streamflow is Measured.” USGS. Accessed June 28, 2019. https://www.usgs.gov/special-topic/water-science-school/science/how-streamflow-measured?qt-science_center_objects=0#qt-science_center_objects.
Mike Acreman. “Environmental Flows: Basics for Novices.” WIREs Water 3, no. 5 (September/October 2016): 622–28. https://doi.org/10.1002/wat2.1160.
Grooten, Monique, and Rosamunde E.A. Almond, eds. Living Planet Report 2018: Aiming Higher. Gland, Switzerland: WWF International, 2018.
WWF. “Banking on Financial Solutions to Save Our Basins.” WWF Briefing. Gland, Switzerland: WWF International, 2018.
Alliance for Water Stewardship. “International Water Stewardship Standard, Version 2.0.” Alliance for Water Stewardship, North Berwick, Scotland, March 22, 2019.
This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.
Esnault, Laurent, Tom Gleeson, Yoshihide Wada, Jens Heinke, Dieter Gerten, Elizabeth Flanary, Marc F.P. Bierkens, and Ludovicus P.H. van Beek. 2014. “Linking groundwater use and stress to specific crops using the groundwater footprint in the Central Valley and High Plains aquifer systems, U.S.” Water Resources Research, 4953-4973.
Woolsey, Sharon, Florence Capelli, T. O. M. Gonser, Eduard Hoehn, Markus Hostmann, Berit Junker, Achim Paetzold et al. “A strategy to assess river restoration success.” Freshwater Biology 52, no. 4 (2007): 752-769.
Willis, K. G., and Guy D. Garrod. “Angling and recreation values of low-flow alleviation in rivers.” Journal of Environmental Management 57, no. 2 (1999): 71-83.
Kingsford, Richard T. “Conservation management of rivers and wetlands under climate change–a synthesis.” Marine and Freshwater Research 62, no. 3 (2011): 217-222.
Hirji, Rafik, and Richard Davis. 2009. “Environmental Flows in Water Resources Policies, Plans, and Projects: Case Studies.” World Bank, Environment Department Papers, Natural Resource Management Series, April: 117-160.
Naiman, Robert J., Stuart E. Bunn, Christer Nilsson, Geoff E. Petts, Gilles Pinay, and Lisa C. Thompson. “Legitimizing fluvial ecosystems as users of water: an overview.” Environmental management 30, no. 4 (2002): 455-467.
Tunstall, Sylvia M., E. C. Penning‐Rowsell, S. M. Tapsell, and S. E. Eden. “River restoration: public attitudes and expectations.” Water and Environment Journal 14, no. 5 (2000): 363-370.
Arthington, Angela H., Stuart E. Bunn, N. LeRoy Poff, and Robert J. Naiman. “The challenge of providing environmental flow rules to sustain river ecosystems.” Ecological applications 16, no. 4 (2006): 1311-1318.
Poff, N. LeRoy, J. David Allan, Mark B. Bain, James R. Karr, Karen L. Prestegaard, Brian D. Richter, Richard E. Sparks, and Julie C. Stromberg. “The natural flow regime.” BioScience 47, no. 11 (1997): 769-784.
Golet, Gregory H., Michael D. Roberts, Eric W. Larsen, Ryan A. Luster, Ron Unger, Gregg Werner, and Gregory G. White. “Assessing societal impacts when planning restoration of large alluvial rivers: A case study of the Sacramento River project, California.” Environmental management 37, no. 6 (2006): 862-879.
Richter, Brian D., Ruth Mathews, David L. Harrison, and Robert Wigington. “Ecologically sustainable water management: managing river flows for ecological integrity.” Ecological applications 13, no. 1 (2003): 206-224.
Garssen, Annemarie G., Jos TA Verhoeven, and Merel B. Soons. “Effects of climate‐induced increases in summer drought on riparian plant species: a meta‐analysis.” Freshwater biology 59, no. 5 (2014): 1052-1063.
Dyson, Megan, Ger Bergkamp, and John Scanlon. “Flow: the essentials of environmental flows.” IUCN, Gland, Switzerland and Cambridge, UK (2003): 20-87.
Fluet-Chouinard, Etienne, Simon Funge-Smith, and Peter B. McIntyre. “Global hidden harvest of freshwater fish revealed by household surveys.” Proceedings of the National Academy of Sciences 115, no. 29 (2018): 7623-7628.
Loomis, John, Paula Kent, Liz Strange, Kurt Fausch, and Alan Covich. “Measuring the total economic value of restoring ecosystem services in an impaired river basin: results from a contingent valuation survey.” Ecological economics 33, no. 1 (2000): 103-117.
Baron, Jill S., N. LeRoy Poff, Paul L. Angermeier, Clifford N. Dahm, Peter H. Gleick, Nelson G. Hairston Jr, Robert B. Jackson, Carol A. Johnston, Brian D. Richter, and Alan D. Steinman. “Meeting ecological and societal needs for freshwater.” Ecological Applications 12, no. 5 (2002): 1247-1260.
Gobster, Paul H., and Lynne M. Westphal. “People and the river: perception and use of Chicago waterways for recreation.” Chicago Rivers Demonstr. Proj. Rep. Milwaukee, WI: US Department of the Interior, National Park Service, Rivers, Trails, and Conservation Assistance Program. 192 p. (1998).
Richter, Brian D., and Holly E. Richter. “Prescribing flood regimes to sustain riparian ecosystems along meandering rivers.” Conservation Biology 14, no. 5 (2000): 1467-1478.
Suen, Jian‐Ping, and J. Wayland Eheart. “Reservoir management to balance ecosystem and human needs: Incorporating the paradigm of the ecological flow regime.” Water resources research 42, no. 3 (2006).
Rivers for Life: Managing Water for People and Nature (2003), by Sandra Postel and Brian Richter. Island Press, Washington D.C.
Davidson, Eric A., Alessandro C. de Araújo, Paulo Artaxo, Jennifer K. Balch, I. Foster Brown, Mercedes MC Bustamante, Michael T. Coe et al. “The Amazon basin in transition.” Nature 481, no. 7381 (2012): 321.
Richter, B. “Water Share: Using water markets and impact investment to drive sustainability.” The Nature Conservancy, Washington, DC (2016).
Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.
Amount of water flowing in freshwater streams during the reporting period, measured in units of volume per unit of time (for example gallons per minute (gpm), cubic feet per second (cfs), acre-inches per hour, acre-feet per day, etc.).
Organizations should footnote all assumptions used.
Depending on their access to water data in a given area, organizations may need to use models to estimate this information.
To understand if the current volume of water in streams is an increase or decrease from what would be expected for that location and that time of year.
Indicates whether the organization has undertaken biodiversity-related assessments to evaluate the biological diversity present on the land that is directly or indirectly controlled by the organization.
Organizations should footnote all assumptions used.
Examples of information that the assessments may cover, to footnote, include: the species present in a given area, wildlife habitat conditions, availability and quality of water resources, potential effect of production on adjacent crops, historical/archaeological importance of the land, or existence of regulations related to the site (e.g., catchments area, protected area, etc.).
Organizations are also encouraged to footnote details about the frequency and system with which it conducts its biodiversity assessments.
To understand the status of the freshwater systems on land directly controlled by the organization and prioritize areas where improvements in water flows or levels could be most helpful.
Describes the ecosystem services provided by land directly or indirectly controlled by the organization, during the reporting period. Select all that apply from the list in the metric record.
Organizations should footnote all assumptions used.
Examples of details to footnote include: an explanation of how land provides the selected ecosystem services, as well as any external validation or verification that has been conducted to demonstrate the provision of the ecosystem services, including which services were covered, the date, and the entity providing verification/validation (e.g., university researcher, consultant, ecosystem service bank).
Organizations are encouraged to report this metric in conjunction with: Protected Land Area: Total (PI4716), Protected Land Area: Permanent (PI3924), Land Directly Controlled: Sustainably Managed (OI6912), Land Indirectly Controlled: Sustainably Managed (PI6796), Land Directly Controlled: Total (OI5408), and Land Indirectly Controlled: Total (PI3789).
The detailed options for this metric were sourced from the World Resources Institute (WRI).
To understand the co-benefits that may be supported or increased through improvements in water flows or levels in streams on land directly controlled by the organization.
The quantity and timing of water flows required to maintain the components, functions, processes, and resilience of freshwater ecosystems and sustain the goods and services they provide to people have been determined for streams present. Determining environmental flows also determines the quantity and timing of flows that are available for humans to alter or divert safely, without harming freshwater ecosystems.
See Collection Considerations
Organizations should footnote all assumptions used.
Environmental flows can be determined in various ways. Guidance for determining environmental flows can be found at Conservation Gateway.
To understand the quantity and timing of water flows required to maintain freshwater ecosystems, which is useful for determining tradeoffs that may be necessary among water uses affecting the streams present on lands controlled by the organization.
The amount of water flowing in freshwater streams during the reporting period, measured in units of volume per unit of time (for example gallons per minute (gpm), cubic feet per second (cfs), acre-inches per hour, acre-feet per day, etc.).
Present Streamflow/Environmental Flows Determined for Streams Present
Organizations should footnote all assumptions used.
Calculate the Percent of Streamflow Sufficient to Maintain Freshwater Systems: Present Streamflow/Environmental Flows Determined for Streams Present.Note: - Depending on their access to water data in a given area, organizations may need to use models to estimate this information.
To understand how if current water flows in streams present on lands controlled by the organization are sufficent to maitain the function and health of freshwater ecosystems.