💧Water, Impact and the Investment Business Case that is not being made
Environment Agency reports today 60% increase in serious pollution incidences in 2024: 2,801 incidents, 75 considered serious harm to human health and fisheries
A new impact accounting methodology for water use, released by the International Foundation for Valuing Impacts, sets out a rigorous framework to quantify the impact of water consumption. It’s data-driven and timely, and in my view should be mandatory for corporates.
But, as specified in the scope of the methodology, it excludes accounting for the negative impacts of water discharge and overlooks missed opportunities and the biggest potential areas of social value. The impact model is set out below.
Missed impact opportunities
In the wellness world water is seen as sacred and it has healing properties. Across the UK, at heritage sites like Glastonbury’s Chalice Well, the water is rich in natural salts and minerals and is for healing and in ceremony. Pictured below.
‘Missed impact opportunities’ are also not in the scope of the methodology, but these have huge potential social value too, and if considered would result in new investment and funding opportunities. For example local springs restored, community water ceremonies revived, clean food from biofarming and permaculture, and clean crystallised pure spring water from source, offered as a public good. The positive social value, if measured properly, could shift investment decisions entirely.
But many of the UK’s heritage sites, the holy wells and springs, have been contaminated or built over. Why?
🤑 Because water was commodified.
📈 Because our systems were built for money and efficiency, not health.
🧑🚒 Because what couldn’t be priced wasn’t protected.
The consequences are:
💸 Rising NHS costs
🌱 Contaminated rivers and soils
🧠 Poor mental and physical health
🚱 A deep disconnect from nature
Not accounting for the water discharge values results in continuous contamination of our rivers and soils which then results in increased health problems and costs.
The Environment Agency, in the BBC News today reported that serious water pollution incidents are up 60% in England: 20801 in 2024 compared with 2174 in 2023. 75 of these were posed as seriously harming fisheries, drinking water and human health. Water companies blame the regulator for not allowing them to raise the bills to pay for investment. However the water companies have been taking money out of the water system to pay shareholders and investors.
https://www.bbc.co.uk/news/articles/cg5zl75dmm0o
The image below is Severn Trent Water’s Annual Report & Account for Investors 2023/24. If it accounted for the true social value, the account would look different, with reduced profit and dividends. This is the challenge that we face.
While I applaud the methodology for encouraging transparency and accountability around both the positive and negative impacts of services, there’s still a long way to go before meaningful change can take root.
Our Impact Management Compass for funders and investors will address some of these challenges: By working with investees to identify the social value of missed opportunities like these. To identify the invisible sources of value.
📍 If you’re an investor, here’s our Expression of Interest Form, we would love to work with you and you’re investees to help to build the business case for investment for ‘missed opportunities’, aka catalytic capital.