Investments aligned with this Strategic Goal aim to keep more and cleaner water in freshwater ecosystems by improving industrial and municipal water practices.

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.


Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What problem does the investment aim to address? For the target stakeholders experiencing the problem, how important is this change?

Over the past 50 years, the world’s population has doubled and global GDP has grown tenfold, with booming agricultural and industrial output and expanding cities (1). Excessive water abstraction, pollution, and diversion—driven by growing agricultural, industrial, and domestic water use—have diminished the quality and quantity of water available for people and ecosystems (24). Increased climate variability places even more stress on water resources. Reducing the amount of water consumed by industrial and municipal uses and improving the quality of water discharged can reduce pressures on these resources.

Investments aiming to improve industrial and municipal water practices can:

  • supply means to manage rainwater, graywater, stormwater, or wastewater for reuse in industrial or domestic settings, where appropriate, and develop and supply efficient technologies to treating water prior to returning it to freshwater ecosystems;
  • implement robust leak detection and repair programs in water-delivery systems;
  • execute water conservation plans, such as conversion to low-flow fixtures;
  • publicize the environmental, economic, and social benefits of decreasing freshwater withdrawals and secure the necessary local, regional, national, or international commitments needed to retain water savings in the source ecosystem;
  • plant native or drought-tolerant landscaping;
  • execute energy conservation plans to reduce the water directed to produce energy, which also reduces greenhouse gas emissions; and
  • integrate industrial and wastewater treatment and sustainable water concessions into existing investments in, for example, manufacturing firms, logistics, or urban developments.

What is the scale of the problem?

Global water use has increased by about 1% per year since the 1980s, driven by a combination of population growth, socioeconomic development, and changing consumption patterns (2). The United Nations World Water Assessment Programme expects worldwide water demand to continue increasing near this rate until 2050, an increase of 20–30% above current levels of use primarily caused by rising demand in the industrial and domestic sectors (23).

Industrial water use, accounting for roughly 20% of all global withdrawals, is dominated by energy production (approximately 75%) and manufacturing (the remaining 25%) (27). According to the Organisation for Economic Co-operation and Development (OECD), from 2000 to 2050 water demand for domestic use will increase by 400%, 140%, and 130%, respectively (9). Although agriculture will remain the largest overall use of water demand is likely to grow much faster than agricultural demand (26).

Inadequate management of municipal and industrial wastewater accounts for much water pollution, particularly in low-income countries, where only around 8% of such wastewater undergoes treatment of any kind (21).


Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who (people, planet, or both) is helped through investments aligned with this Strategic Goal?

Freshwater ecosystems: Animals and plants in streams, rivers, and lakes need certain water flows and levels over the course of the year to support critical stages of life (13). Investments that reduce water withdrawals and consumption can help maintain the more natural flow regimes to which native aquatic species are adapted. Aquatic species also benefit from investments that reduce the discharge of industrial and municipal pollutants into freshwater ecosystems, either by changing production processes or treating waste.

Rural and urban communities: Rural and urban communities that use untreated or insufficiently treated water benefit from strategies that reduce the contamination of surface or groundwater with industrial or municipal pollutants.

Industrial water users: Reducing the amount of water used in manufacturing, power generation, and other industrial uses can reduce industry’s dependence on water, reducing risk exposure and costs as competition for available water supplies increases (25). Increasing water use efficiency and reusing water where possible can help businesses to adapt to a future of increased competition for water, including by avoiding the need to find new sources of water. Investments in municipal water utilities—to both provide and treat water—can avoid costs for businesses that would otherwise need to provide their own water supplies (18, 4).

Municipal water utilities: Less water wasted in transmission and delivery within municipal systems can reduce the total amount of water needed to meet current demand by municipal water users, which can also reduce the need for new capital investment.

What are the geographic attributes of those who are affected?

Population growth drives increasing water demand both directly (for drinking water, sanitation, hygiene, and household uses) and indirectly (through growing demand for water-intensive goods and services, including food and energy) (23). Global population reached 7.6 billion people in June 2017, and the United Nations expect it to reach about 8.6 billion by 2030 and 9.8 billion by 2050 (20). Africa and Asia account for nearly all current population growth, although Africa is projected to contribute most of the growth beyond 2050 (20).

Projections by the Water Futures and Solutions Initiative predict overall industrial water demand will increase across all regions except North America and Western and Southern Europe (5). Industrial demand could increase up to eight times (in relative terms) in sub-Saharan Africa, where industries currently account for a very small proportion of total water use (26). Industrial demand is also likely to increase significantly (up to two and a half times) in South, Central, and East Asia (5).

Domestic water use, which accounts for roughly 10% of global water withdrawals, is expected by the United Nations World Water Assessment Programme to increase significantly from 2010 to 2050 nearly everywhere except for Western Europe (26). In relative terms, the greatest increases in domestic demand should occur in African and Asian sub-regions, where demand could triple; in Central and South America, demand could double (5). This anticipated growth in demand is driven primarily by an anticipated increase in water supply services to urban settlements (26).


Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

How can investments in line with this Strategic Goal contribute to outcomes, and are these investments’ effects likely better, worse, or neutral than what would happen otherwise

Opportunities vary by country and region. Several countries and regions expected to collectively comprise a large portion of future global water demand offer some examples. In 2030, China, India, South Africa, and the state of São Paulo in Brazil will collectively account for 42% of projected global water demand (1).

Investment opportunities in these countries span all sectors; in aggregate, the measures that require the most capital in each country are municipal leakage reduction in China and India and water transfer schemes in São Paulo and South Africa. Drip irrigation shows promise for both lending and equity investments in India – analyses conducted by the Water Resources Group imply that proliferation of the technology will grow 11% per year through 2030 (1). In China, however, unlike in most other large economies, industrial demand for water dominates overall growth in demand (1).

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many target stakeholders can experience the outcome through investments aligned with this Strategic Goal?

There is no single water crisis (1). Different countries, even in the same region, face very different problems. Though generalizations are difficult, countries that withdraw more than 25% of their renewable freshwater resources are defined by the FAO as water-stressed (6). As of 2011, water-stressed countries totaled 41, up from 36 countries in 1998 (6). More than two billion people live in countries experiencing high water stress, and about four billion experience severe water scarcity at least one month each year (23). Water stress will continue to increase as demand for water grows and the effects of climate change intensify.

How much change can target stakeholders experience through investments aligned with this Strategic Goal?

The amount of change depends on the water use practices and technologies that are currently in use. Locations with less water-efficient current practices will yield greater benefits from reducing water use and loss by improving industrial and municipal water use practices.

Increasing water use efficiency in all major sectors (agriculture, energy, industry, and municipal/domestic) can also lower overall demand and thus free water for other users, including ecosystems (23). Examples include:

  • Flushing toilets and urinals with non-potable water can offset approximately 25% of total potable water use in a residential building and up to 75% of total use in a commercial building (8).
  • Other potential non-potable demands include irrigation, cooling and heating, process water, and clothes washing (8). Using onsite non-potable water systems to meet these demands can further reduce potable water demands by 50–90% (8).
  • Commercial and mixed-use buildings can reduce their water footprints and stretch water supplies by collecting and treating rainwater, stormwater, graywater, or blackwater onsite before reusing it to meet their local demands (8).
  • Water-efficient landscaping using native or other climate-appropriate plant materials can reduce both irrigation use and the time and money required for maintenance (11).
  • Condensate produced by steam boilers, commonly used in large heating systems, institutional kitchens, and other facilities, can be captured and reused, greatly reducing water, chemical, and energy use, as well as operating costs (11). Recycling of all wastewater in industrial settings may be possible through processes such as stream separation and material and energy recovery.

Change that results from the adoption of new technologies or practices is likely to last as long as those technologies or practices are properly maintained and supported, provides cost savings for their owners and operators, and supports continued local industrial and municipal water uses. Realized ecosystem benefits of water conserved in the environment (and not extracted to meet new or additional demand) will last as long as regulations and enforcement mechanisms ensure no new or additional withdrawals.


Dimensions of Impact: RISK

Key questions in this dimension include:

What impact risks do investments aligned with this Strategic Goal run? How can investments mitigate them?

Evidence Risk: Investors may lack the consistent, reliable data needed to inform their investment decisions. Data on water use by region and economic sector are often the least reliable and most inconsistent of all data regarding water resources (19). Investors can mitigate this risk by catalyzing the development of data needed to inform an evidence-based vision for water resources (1).

Alignment Risk: Because most water supplies are subsidized, businesses often lack sufficiently strong signals and incentives to prompt more efficient and productive use of water (1). Institutional barriers, lack of awareness, and misaligned incentives may hinder the implementation of affordable solutions in both the private and public sectors. In cooperation with policymakers, other financiers, conservationists, and the private sector, investors can mitigate this by developing and promoting innovative financial tools to ensure those willing to improve their water footprints have the opportunity to do so (1).

External Risk: Realized water savings may not remain in the environment unless regulations and enforcement mechanisms adequately monitor and manage withdrawals.

Unexpected Impact Risk: Increases in water use efficiency can have unintended consequences (9). Investments in water technology and engineered systems focused on human water security can add to existing threats to biodiversity and ecosystem function by increasing the appropriation of surface water flows that are essential for environmental needs or increasing the extraction of possible non-renewable groundwater resources (28, 17). Water reuse or recycling can in some cases actually worsen water scarcity within a stressed basin by making more water available for consumptive use instead of returning wastewater to its original source. This can further diminish environmental flows (9). Water transfer schemes, meanwhile, can cause negative social, economic, and environmental impacts, besides having a high demand for energy. Investors can mitigate this by identifying opportunities for public and private investments and partnerships across catchments, aligned to the water management and reuse guidelines set by regional and local planners; and investing in a portfolio of projects across a basin, informed by hydrologic modeling that accounts for the water needs of ecosystem functions and biodiversity in that basin, as well as pursuing the legal and regulatory protections necessary to secure those environmental water needs.

What are likely consequences of these impact risk factors?

Investments based on inaccurate or inconsistent water use data or deployed in a region lacking the proper incentives to reduce water use may not reduce water use and loss where most needed. If the potential unintended effects on biodiversity and ecosystem function are not considered or not understood, investments that successfully reduce industrial and municipal water use and water waste could lead to more industrial and municipal water use overall and exacerbate negative impacts on freshwater systems.

Illustrative Investment

Resonance Industrial Water Infrastructure Limited is an investment fund that aims to invest in small- to medium-sized greenfield and retrofit industrial water treatment and resource recovery infrastructure. The fund acts as a financial partner, offering equity investments on an industry standard Build–Own–Operate–Transfer model to allow industrial water partners to grow their core businesses without financing the large amounts of capital these projects require. The key drivers of return for the fund and the industrial water users are the recovery of resources (energy, nutrients, metals, or specialized chemical substances used in manufacturing processes) and technology upgrades that improve plant efficiency and reduce operating costs. This non-recourse equity financing substantially reduces technology risk for industrial water users (31).

Investors Kurita Water Industries Ltd., Cowles Company, Element 8, and the Urban Innovation Fund invested in Apana, which created the trademarked Intelligent Water Management Platform, a secure Internet of Things (IoT) solution that delivers smart water management as a service for facilities. Fetzer used Apana’s system to eliminate water waste at its Hopland, California winery, installing nearly 30 smart water meters that transmit water flow patterns to a virtual 24/7 water manager. The system uses Apana’s proprietary hardware and software to pinpoint leaky faucets and valve malfunctions in real time, as they occur. Fetzer aims to reduce its annual water footprint by 15%, avoiding 2.5 to 4 million gallons of water wasted each year.

Have an investment we should consider highlighting for this Strategic Goal? Let us know. 

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

A Comparison of Runoff Quantity and Quality from Two Small Basins Undergoing Implementation of Conventional and Low-Impact-Development Strategies: Cross Plains, Wisconsin, Water Years 1999-2005 Selbig, W.R., and R.T. Bannerman. 2008. A comparison of runoff quantity and quality from two small basins undergoing implementation of conventional- and low-impact-development (LID) strategies: Cross Plains, Wisconsin, water years 1999-2005. Scientific Investigations Report 2008-5008, U.S. Geological Survey, 57.
Comparison of Stormwater Lag Times for Low Impact and Traditional Residential Development

Hood , Mark J., John C. Clausen , and Glenn S. Warner. 2007. “Comparison of Stormwater Lag Times for Low Impact and Traditional Residential Development.” Paper No. J05177 of the Journal of the American Water Resources Association (JAWRA) 43 (4): 1036-1046.

Stormwater runoff and export changes with development in a traditional and low impact subdivision

Dietz, Michael E., and John C. Clausen. 2008. “Stormwater runoff and export changes with development in a traditional and low impact subdivision.” Journal of Environmental Management 87 (4): 560-566.

Assessing the Co-Benefits of green-blue-grey infrastructure for sustainable urban flood risk management

Alves, Alida, Berry Gersonius, Zoran Kapelan, Zoran Vojinovic, and Arlex Sanchez. 2019. “Assessing the Co-Benefits of green-blue-grey infrastructure for sustainable urban flood risk management.” Journal of Environmental Management 239: 244-254.

Assessing the risk of utilizing tidal coastal wetlands for wastewater management

Shifflett, Shawn Dayson, and Joseph Schubauer-Berigan. 2019. “Assessing the risk of utilizing tidal coastal wetlands for wastewater management.” Journal of Environmental Management 236: 269-279.

Effects of Low-Impact-Development (LID) Practices on Streamflow, Runoff Quantity, and Runoff Quality in the Ipswich River Basin, Massachusetts: A Summary of Field and Modeling Studies

Zimmerman, M.J., M.C. Waldron, J.R. Barbaro, and J.R Sorenson. 2010. Effects of low-impact-development (LID) practices on streamflow, runoff quantity, and runoff quality in the Ipswich River Basin, Massachusetts—A Summary of field and modeling studies. Circular 1361, U.S. Geological Survey, 40 p. (Also available at

Grow in Concert with Nature: Green Water Defense for Flood Risk Management in East Asia

Li, Xiaokai, Marcel Marchand, and Weihua Li. 2012. Grow in concert with nature : green water defense for flood risk management in East Asia (English). An EASSD discussion paper, Washington DC: World Bank.

Regulating Ecosystem Services and Green Infrastructure: assessment of Urban Heat Island effect mitigation in the municipality of Rome, Italy

Marando, Federica, Elisabetta Salvatori, Alessandro Sebastiani, Lina Fusaro, and Fausto Manes. 2019. “Regulating Ecosystem Services and Green Infrastructure: assessment of Urban Heat Island effect mitigation in the municipality of Rome, Italy.” Ecological Modelling 392: 92-102.

The Role of Green Infrastructure Solutions in Urban Flood Risk Management

Soz, Salman Anees, Jolanta Kryspin-Watson, and Zuzana Stanton-Geddes. 2016. The Role of Green Infrastructure Solutions in Urban Flood Risk Management. Washington, DC: World Bank. License: CC BY 3.0 IGO.

Urban Green Spaces and an Integrative Approach to Sustainable Environment

Haq, S. . 2011. “Urban Green Spaces and an Integrative Approach to Sustainable Environment.” Journal of Environmental Protection 2 (5): 601-608.

Controlling Yangtze River Floods: A New Approach

Pittock, Jamie, and Ming Xu. n.d. World Resources Report Case Study. Controlling Yangtze River Floods: A New Approach. Washington DC: World Resources Report. Available online at

Planning for Cooler Cities: A Framework to Prioritise Green Infrastructure to Mitigate High Temperatures in Urban Landscapes

Norton, Briony A., Andrew M. Coutts, Stephen J. Livesley, Richard J. Harris, Annie M. Hunter, and Nicholas S.G. Williams. 2015. “Planning for cooler cities: A framework to prioritise green infrastructure to mitigate high temperatures in urban landscapes.” Landscape and Urban Planning 134: 127-138.

The Urban Stream Syndrome: Current Knowledge and The Search for a Cure

Walsh, C. J., A. Roy, J. W. Feminella, P. D. Cottingham, P. M. Groffman, and R. P. Morgan. 2005. “The Urban Stream Syndrome: Current Knowledge and The Search For A Cure.” Journal Of The North American Benthological Society (North American Benthological Society) 24 (3): 706-723.

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.