Investments aligned with this strategic goal aim to increase access to safely managed non-sewered sanitation services, including toilets, safe transport of waste, waste management, and waste reuse.

The sections below include an overview of the strategy for achieving desired goals, supporting evidence, a starter kit of metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.

What

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?

In 2017, just 45% of the world’s population had access to safely managed sanitation services (1). Safe sanitation improves people’s health, well-being, and dignity (2). Exposure to excreta as a result of inadequate household or community-wide access to sanitation harms human and environmental health, increasing disease and pollution (3, 4).

In many locations, however, constructing sewered systems is infeasible given population density and costs or unsustainable given the high volume of water required. Non-sewered sanitation options can fill this gap (5). For example, comparing the capital expenditure and operating costs required for sewered versus non-sewered treatment systems in Dakar, Senegal, one study found that a sewered system would cost 10 times more (6). Non-sewered solutions will become increasingly important as the urban population grows as projected over the coming decades.

In addition, regarding global greenhouse gas emissions, the sanitation and waste sector contributed approximately 5% of non-carbon emissions in 2010, making it the fifth-largest contributor. Innovative sanitation solutions can reduce emissions and transform waste into a reusable resource that is potentially valuable for agricultural production, energy, or carbon capture (4).

Investments aiming to increase access to non-sewered sanitation services can :

  • design, construct, and maintain non-sewered toilets, including latrines, container-based sanitation solutions, and in-home toilets;
  • empty and transport waste, including from latrines;
  • treat waste; and
  • reuse or dispose of treated waste product, such as biochar.

What is the scale of the problem?

As of 2017, more than four billion people lack access to safely managed sanitation (7). One study of low- and middle-income countries estimated that 63% of all households (approximately 1.8 billion people) use sanitation facilities that require fecal sludge management (8).

Who

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?

Low-income households: Typically the target market, households in the poorest wealth quintile, one study found, were almost 170 times more likely to require fecal sludge management than were households in the richest wealth quintile (8).

Rural, urban, and peri-urban communities: While all communities need safely managed sanitation service, strategies for achieving this level of service differ by location. Eighteen percent of the rural population still practices open defecation as of 2017, and this practice is much more common among poorer people (1). For these populations, household latrines are particularly important. The urban and peri-urban poor typically use limited sanitation facilities, such as toilets shared among multiple households, along with unimproved sanitation, such as buckets. Fecal sludge management is particularly important in the urban and peri-urban settings. Finally, all densely populated or fast-growing urban communities without a complete sewered network can benefit from safely managed non-sewered sanitation, which reduces the risk of water contamination from untreated waste regardless of its source (9, 10).

Women and girls: Women and girls especially benefit from toilet facilities that increase their privacy and safety, whether an in-home latrine or higher-quality shared sanitation (11). Inadequate access to indoor sanitation and the need to travel to outdoor toilet facilities are major risk factors for gender-based violence (12). Women in India who practice open defecation are twice as likely to experience non-partner sexual violence as women with a household toilet (13).

The environment: Adequate fecal sludge management prevents the eventual discharge of excreta without treatment into bodies of water. Discharge of untreated waste depletes oxygen in water bodies, reduces water quality, and damages aquatic ecosystems (4).

What are the geographic attributes of those who are affected?

Certain geographic areas have higher need for non-sewered sanitation than others. Sixty-one “high-burden” countries, where more than 5% of the population practices open defecation, are located primarily in sub-Saharan Africa, South Asia, and East Asia Pacific. Just 31% of the population in sub-Saharan Africa and 61% of the population in Eastern and South-Eastern Asia have at least basic sanitation services (7).

In addition, unlike in North America and Europe, where industrial pollution is the primary concern, urban wastewater is the main source of nutrient pollution in the coastal waterways of South America, Asia, and Africa (4).

Contribution

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

Organizations investing in projects that improve access to and use of nonsewered sanitation can contribute toward solutions by:

  • Signal that impact matters. By investing in projects targeting positive WASH outcomes, investors signal that impact matters within their portfolios.
  • Engage actively. Investors can use their expertise and networks to improve performance of businesses related to WASH outcomes. Engagement can include a variety of approaches ranging from dialogue with investees to hands-on management support. For further details, see A Guide to Classifying the Impact of an Investment.
  • Growing new or undersupplied capital markets: Sanitation receives relatively little investment compared to other infrastructure, and integration of non-sewered sanitation into urban policies has only recently begun. Investments aligned with this strategic goal can help close this gap in financing.
  • Providing flexible capital: Non-sewered sanitation providers are often at an early or pioneer stage, still operating at small scale, refining their revenue models, and developing technology. Such providers may require more patient capital (17).

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?

As of 2017, more than 4 billion people lack access to safely managed sanitation (7).  This includes two billion without access to even basic sanitation facilities, for whom access to in-home toilet facilities is a priority.  The remainder have access to a toilet in the home, but waste is not adequately treated.

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

Positive change associated with investments expanding options for non-sewered sanitation depends on the context of the investment. Examples of change associated with investments in this strategy include the following:

  • A meta-analysis of multiple sanitation studies found that sanitation interventions reduced the risk of diarrhea by 25%, with up to 45% reduction in risk when neighborhood coverage was high (3).
  • In India, a study found that intestinal infections in children occurred more frequently in households with poor fecal sludge management compared to households without toilets at all (9).
  • Strong links between open defecation and non-partner sexual violence have been found in India (13) and Kenya (14).
  • A literature review found that inadequate sanitation can negatively influence mental and social well-being, as feeling a lack of privacy or safety can lead to anxiety, shame, and embarrassment (15).
  • The lack of proper sanitation costs the world an estimated USD 223 billion annually. Worldwide, the economic return of a dollar invested in sanitation is at least USD 5.50, largely due to the decreased incidence of disease, which leads to productivity gains (16).

Risk

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?

Impact risk factors identified by experts as material for this Strategic Goal include:

  • Execution Risk: Activities may not be delivered as planned, and the quality of service may not improve, especially given the relatively early stage of non-sewered sanitation technology and business models. Investors can mitigate risk in this early-stage sector through formal or informal partnerships with donors or philanthropic investors that fund research and development or demonstration-style pilot projects. Many startup enterprises that are currently serving low-income populations require external subsidies, especially for capital expenditure, to remain financially viable. Ending these subsidies could interrupt or completely end service provision. To avoid this instability, investors should ensure that entrepreneurs are aligned with expected timelines for financial sustainability.

  • External Risk: In many countries, non-sewered sanitation services are currently offered informally, with unclear mandates and regulatory shades of grey. Regulatory changes may therefore directly affect service providers’ operating environments. Investors and service providers can mitigate this risk through deliberate advocacy and partnership with appropriate government entities, including municipal, state, and national authorities.

  • Drop-Off Risk: Toilet construction alone may not lead an entire household to use the new facility, limiting the otherwise-expected public health and environmental benefits. In contexts where this arises as a concern, investors should focus on neighborhood coverage and systems-level improvements in fecal sludge management. Investees should be sure to consider any explicit or implied requirements for behavioral change as part of their product or service design.

  • Unexpected Impact Risk: Without adequate environmental, social, and governance practices in place, spillages of excreta or unsafe worker conditions could lead to negative health or environmental impacts. Investors can require implementation of minimum standards for these practices, especially those regarding occupational health and safety.

What are likely consequences of these impact risk factors?

These risk factors could prevent achievement of the benefits of safely managed sanitation, including improvements to human and environmental health.

Illustrative Investment

Sanivation is a Kenya-based social enterprise that provides waste-to-energy sanitation services for local governments and refugee camps, turning fecal sludge into environmentally friendly fuel alternatives to charcoal and firewood. Secondary cities in developing countries struggle to manage sewage because they lack the resources to build and run traditional sanitation infrastructure. The Sanivation model turns waste treatment from a cost burden into a revenue source for communities. After successfully deploying sanitation solutions in the Kakuma refugee camp, Sanivation partnered with the Naivasha, Nakuru, Kisumu, and Malindi municipal governments, operating waste-treatment plants, installing and servicing container-based toilets, and providing private-sector technical expertise to these governments on long-term sanitation plans. FINCA Ventures, an investment initiative of FINCA International, is an early investor in Sanivation.

Sanergy is a social enterprise in Kenya that builds bold sanitation and waste management solutions for emerging cities, starting with Nairobi. In their full-value-chain model, the company builds high-quality sanitation units branded Fresh Life, which are distributed in non-sewered urban areas to landlords and entrepreneurs via a monthly subscription model. Sanergy regularly and safely removes all generated waste that would otherwise contribute to disease and pollute the environment, transports the waste to their recycling factory, and converts it into a portfolio of valuable products, predominantly organic fertilizer, high-protein insect-based animal feed, and briquettes used as fuel. As of June 2019, Sanergy had more than 2,700 toilet facilities managed by 1,900 ‘Fresh Life Operators,’ half of whom are women. This has enabled 100,00 people each day to access safe sanitation, with 26,069 metric tons of waste cumulatively removed. The company received early-stage investments from impact-first investor Global Partnerships’ Social Venture Fund.

Biomass Controls PBC is a U.S.-based public benefit corporation whose mission is to deliver innovative and transformative technologies in response to the world’s water, sanitation, and environmental challenges. Biomass Controls’ biogenic refinery is a decentralized, small-scale, thermal process that remediates any organic waste, including fecal, food, and agricultural waste (such as manures and crop residues). De-watered waste streams are input into the system, processed thermally, and output pathogen-free in the form of nutrient-rich carbon. An optional integrated, combined heat and power technology generates positive electrical energy; the system can therefore be operated off-grid, and any excess energy may be stored or used for other applications. In 2019, WaterEquity provided a loan for Biomass Controls to expand its deployment of biogenic refineries in India, Cambodia, Indonesia, and the Philippines.

Have an investment the GIIN should consider including here? Let us know!

Draw on Evidence

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

NESTA: 3
Psychosocial impacts of the lack of access to water and sanitation in low- and middle-income countries: a scoping review

Bisung, Elijah, and Susan J. Elliott. “Psychosocial impacts of the lack of access to water and sanitation in low-and middle-income countries: a scoping review.“ Journal of Water and Health 15, no. 1 (2016): 17-30.

NESTA: 2
The Influence of Household- and Community-Level Sanitation and Fecal Sludge Management on Urban Fecal Contamination in Households and Drains and Enteric Infection in Children

Berendes, David, Amy Kirby, Julie A. Clennon, Suraja Raj, Habib Yakubu, Juan Leon, Katharine Robb et al. “The influence of household-and community-level sanitation and fecal sludge management on urban fecal contamination in households and drains and enteric infection in children.“ The American journal of tropical medicine and hygiene 96, no. 6 (2017): 1404-1414.

NESTA: 2
Patterns and determinants of communal latrine usage in urban poverty pockets in Bhopal, India

Biran, A., M. W. Jenkins, P. Dabrase, and I. Bhagwat. “Patterns and determinants of communal latrine usage in urban poverty pockets in Bhopal, India.“ Tropical medicine & international health 16, no. 7 (2011): 854-862.

NESTA: 2
Public toilets and their customers in low-income Accra, Ghana

Peprah, Dorothy, Kelly K. Baker, Christine Moe, Katharine Robb, Nii Wellington, Habib Yakubu, and Clair Null. “Public toilets and their customers in low-income Accra, Ghana.“ Environment and urbanization 27, no. 2 (2015): 589-604.

NESTA: 2
Urban sanitation coverage and environmental fecal contamination: Links between the household and public environments of Accra, Ghana

Berendes, David M., Amy E. Kirby, Julie A. Clennon, Chantal Agbemabiese, Joseph A. Ampofo, George E. Armah, Kelly K. Baker et al. “Urban sanitation coverage and environmental fecal contamination: Links between the household and public environments of Accra, Ghana.“ PloS one 13, no. 7 (2018): e0199304.

NESTA: 2
A Fecal Contamination Index for interpreting heterogeneous diarrhea impacts of water, sanitation and hygiene interventions and overall, regional and country estimates of community sanitation coverage with a focus on low- and middle-income countries

Wolf, Jennyfer, Richard Johnston, Paul R. Hunter, Bruce Gordon, Kate Medlicott, and Annette Prüss-Ustün. “A Fecal Contamination Index for interpreting heterogeneous diarrhea impacts of water, sanitation and hygiene interventions and overall, regional and country estimates of community sanitation coverage with a focus on low-and middle-income countries.“ International journal of hygiene and environmental health 222, no. 2 (2019): 270-282.

NESTA: 2
Household sanitation facilities and women's risk of non-partner sexual violence in India

Jadhav, Apoorva, Abigail Weitzman, and Emily Smith-Greenaway. “Household sanitation facilities and women’s risk of non-partner sexual violence in India.“ BMC public health 16, no. 1 (2016): 1139.

NESTA: 2
Sanitation-related psychosocial stress: A grounded theory of study of women across the life-course in Odisha, India

Sahoo, Krushna Chandra, Kristyna RS Hulland, Bethany A. Caruso, Rojalin Swain, Matthew C. Freeman, Pinaki Panigrahi, and Robert Dreibelbis. “Sanitation-related psychosocial stress: a grounded theory study of women across the life-course in Odisha, India.“ Social science & medicine 139 (2015): 80-89.

NESTA: 2
Access to sanitation and violence against women: evidence from Demographic Health Survey (DHS) data in Kenya

Winter, Samantha C., and Francis Barchi. “Access to sanitation and violence against women: evidence from Demographic Health Survey (DHS) data in Kenya.“ International journal of environmental health research 26, no. 3 (2016): 291-305.

NESTA: 2
Linking energy-sanitation-agriculture: Intersectional resource management in smallholder households in Tanzania

Krause, Ariane, and Vera Susanne Rotter. “Linking energy-sanitation-agriculture: Intersectional resource management in smallholder households in Tanzania.“ Science of the Total Environment 590 (2017): 514-530.

NESTA: 2
Costs and benefits of biogas recovery from communal anaerobic digesters treating domestic wastewater: Evidence from peri-urban Zambia

Laramee, Jeannette, Sebastien Tilmans, and Jennifer Davis. “Costs and benefits of biogas recovery from communal anaerobic digesters treating domestic wastewater: Evidence from peri-urban Zambia.“ Journal of environmental management 210 (2018): 23-35.

NESTA: 2
Opportunities and limits to market-driven sanitation services: evidence from urban informal settlements in East Africa

O’Keefe, Mark, Luthi, Christoph, Kamara, Innocent T., Tobias, Robert. “Opportunities and limits to market-driven sanitation services: evidence from urban informal settlements in East. Africa.” Environment & Urbanization (2015)

NESTA: 2
Faecal sludge drying beds: increasing drying rates for fuel resource recovery in Sub-Saharan Africa

Seck, Alsane, Moritz Gold, Seydou Niang, Mbaye Mbéguéré, Cheikh Diop, and Linda Strande. “Faecal sludge drying beds: increasing drying rates for fuel resource recovery in Sub-Saharan Africa.“ Journal of Water, Sanitation and Hygiene for Development 5, no. 1 (2014): 72-80.

NESTA: 2
Fuel potential of faecal sludge: calorific value

Muspratt, A. Murray, T. Nakato, C. Niwagaba, H. Dione, J. Kang, L. Stupin, J. Regulinski, M. Mbéguéré, and L. Strande. “Fuel potential of faecal sludge: calorific value results from Uganda, Ghana and Senegal.“ Journal of Water, Sanitation and Hygiene for Development 4, no. 2 (2013): 223-230.

NESTA: 2
Faecal sludge as a solid industrial fuel: a pilot

Gold, Moritz, Daniel Isaac Waya Ddiba, Alsane Seck, Patrick Sekigongo, Alassane Diene, Serigne Diaw, Seydou Niang, Charles Niwagaba, and Linda Strande. “Faecal sludge as a solid industrial fuel: a pilot-scale study.“ Journal of Water, Sanitation and Hygiene for Development 7, no. 2 (2017): 243-251.

NESTA: 2
Delivering basic infrastructure services to the urban poor: a meta-analysis of the effectiveness of bottom-up approaches

Narayanan, Sriharini, A. Thillai Rajan, Paul Jebaraj, and M. S. Elayaraja. “Delivering basic infrastructure services to the urban poor: a meta-analysis of the effectiveness of bottom-up approaches.“ Utilities Policy 44 (2017): 50-62.

NESTA: 2
Impact of drinking water, sanitation and handwashing with soap on childhood diarrhoeal disease: updated meta-analysis and meta-regression

Wolf, Jennyfer, Paul R. Hunter, Matthew C. Freeman, Oliver Cumming, Thomas Clasen, Jamie Bartram, Julian PT Higgins et al. “Impact of drinking water, sanitation and handwashing with soap on childhood diarrhoeal disease: updated meta‐analysis and meta‐regression.“ Tropical medicine & international health 23, no. 5 (2018): 508-525.

NESTA: 1
Evaluating the potential of container-based sanitation

World Bank. 2019. “Evaluating the Potential of Container-Based Sanitation.” World Bank, Washington, DC.

NESTA: 1
Exploring the relationship between sanitation and mental and social well-being: A systematic review and qualitative synthesis

Sclar, G. D., G. Penakalapati, B. A. Caruso, Eva Annette Rehfuess, J. V. Garn, K. T. Alexander, M. C. Freeman, S. Boisson, K. Medlicott, and T. Clasen. “Exploring the relationship between sanitation and mental and social well-being: A systematic review and qualitative synthesis.“ Social Science & Medicine 217 (2018): 121-134.

NESTA: 1
The impact of sanitation interventions on latrine coverage and latrine use: A systematic review and meta-analysis

Garn, Joshua V., Gloria D. Sclar, Matthew C. Freeman, Gauthami Penakalapati, Kelly T. Alexander, Patrick Brooks, Eva A. Rehfuess, Sophie Boisson, Kate O. Medlicott, and Thomas F. Clasen. “The impact of sanitation interventions on latrine coverage and latrine use: A systematic review and meta-analysis.“ International journal of hygiene and environmental health 220, no. 2 (2017): 329-340.

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.