Building Bridges Geneva Summit 2021
“We want to be a catalyst of collaboration and investor action around water stewardship”
— Laurent Ramsey, Managing Partner
The event “Driving Capital & Collective Action to achieve SDG 6: Clean water and sanitation for all” featured leading experts in the field of water who discussed how to redirect capital and engage with investors and topic experts to better understand how their practices can contribute to this objective by 2030.
What are the challenges of Sustainable Development Goals?
The United Nation’s 2015 Sustainable Development Goal 6 (SDG6) for 2030 is by some way the most ambitious set of targets for advancing water provision.
SDG 6.1 and 6.2 aim for universal access to safe water and safe sanitation respectively. SDG 6.3 seeks to halve the discharge of untreated wastewater. SDG 6.4 rolls out the application of water-use efficiency to counter water scarcity and SDG 6.5 supports integrated water resources management to tie together these ambitions. Unlike previous water and sanitation initiatives, SDG6 is based on closely monitoring each country’s progress towards these goals, along with their managerial and financial capacity to deliver them.
This means we can identify the challenges we face concerning water services, security and sustainability and decide how to respond to these in an informed way. Because SDG6 is set out as a focused set of objectives, it makes good sense to align these challenges with the specific sub-goals.
SDG for 2030
6.1 — Universal and equitable access to safe and affordable drinking water for all
6.2 — Access to adequate and equitable sanitation and hygiene for all and end open defecation
6.3 — Improve water quality by reducing pollution and halving the proportion of untreated wastewater
6.4 — Substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals
6.5 — Implement integrated water resources management at all levels
6.6 — Protect and restore water-related ecosystems
In the media
Press article 25 March, Marie-Laure Schaufelberger, Head of Group ESG & Stewardship - David Lloyd Owen, Member of the Pictet Water Advisory Board
Water stewardship in a time of climate change
Living with climate change will mean coping with the impacts on water and taking the necessary steps to reduce the vulnerabilities of communities and economies.
The challenges we face
In 2020, 2 billion people lacked safe water and 3.6 billion lacked safe sanitation. In the 2000s, 58% of people faced water stress or scarcity. Gains from reduced deaths and illness and improved productivity range from $170-556 billion pa. The global cost of flooding rose from $15 billion in 1950-69 to $395 billion in 1990-2009. Poor inland water quality inhibits GDP growth.
‘Smart water’ is transforming water and wastewater management, delivering better outcomes at lower costs. Demand management and nature-based solutions, along with innovative procurement and project management also drive costs down. The developing world can often leap-frog traditional technologies and techniques as locally developed plant and processes can offer better and more sustainable approaches.
Climate change exacerbates these pressures on water by increasing water demand and the variability of rainfall intensity and frequency. The more the water sector can do to reduce its carbon impact, the less will its future impact be. Water and sewage utilities contribute 2-3% of global greenhouse gas emissions, so supporting best methane practices and minimising discharges will be crucial
Covid-19, along with cyber-crime and climate change highlight the need for utilities to adapt to a range of unexpected outcomes, unforeseen threats and constantly changing circumstances. Wastewater-based epidemiology shows the potential for sewerage monitoring to make savings (in human and economic terms) and minimise current and future pandemics.
SDG6 assesses each country’s capacity to manage and finance each goal and to quantify affordability. SDG6 is driven by the ability to meet targets rather than aspirations.
Philanthropic funding can be effectively used to assist in providing sustainable access to water and sanitation. For example, ensuring projects deliver their intended outcomes. Capacity-building helps ensure that they are delivering the appropriate systems, and working alongside national organisations responsible for delivering Official Development Assistance.
A promising area for funding water projects has started to emerge at the intersection of philanthropy, economic development and traditional finance. These initiatives use innovative financing approaches that incentivise the achievement of greater positive impact such as pay-for-success agreements. In developed markets, bond structures are being adapted to include outcome dependent features.
Private capital and its associated governance (quantified ESG reporting) can be effectively deployed to help the world move towards universal access to safe water and sanitation and water related risk management.
- Smart waters
- Private sector
- Capacity building
Responding to the water challenges
- Transforming water and wastewater management through real-time metering and monitoring.
- Real-time, smart water metering and network management to deliver better outcomes at lower costs and ensuring that both customers and the environment will benefit.
- Facing funding, politics, rising expectations and ageing infrastructure challenges.
- Private sector participation in project design, development and management to deliver cost savings and improved service delivery.
- Boosting water management and governance knowldedge in Emerging Markets and civil societies.
- Delivering the appropriate systems for each place. Working with national organisations responsible for delivering Official Development Assistance.
- Enabling water security through minimising water consumption and ensuring its effective use.
- Demand Management to lower costs in domestic consumption, industry and irrigation, along with minimising water transmission losses.
- Using or mimicking natural processes for ecosystem services to complement water networks.
- Nature-based solutions to ease the need to use ‘hard’ water infrastructure, while improving water quality and resilience to floods and drought.
Pictet Water Stewardship Principles
Pictet intends to support and promote the principles of SDG6, the human right to water and sanitation and their universal access, throughout the Pictet Group:
- Government Bonds: Engage with sovereign issuers to support policies to implement these.
- Corporate Bonds and Listed Equities: Engage in delivering best practices.
- Listed impact equities: Focus on water and environmental services companies.
- Private equity: Systematically apply best practices to water management.
- Philanthropy: Our foundation will continue to pursue funding of water projects that support these principles where financial returns are not possible, appropriate or require grant funding at inception.
“The high quality ESG requirements from the Pictet Water Team for all the companies they are invested in has allowed us to increase the level of our ESG rules to the best in class standards.”
Our leadership team and Board of Directors at Xylem has had the tremendous fortune of a long-standing and constructive relationship with Pictet Asset Management, particularly the Pictet Water Fund. It is the type of relationship that corporate issuers yearn for with shareholders – one that is both supportive and constructive, while also appropriately tough and challenging, ensuring accountability and exceptional performance on financial and non-financial results.
The relationship between Xylem and Pictet Water has spanned a couple of decades, even preceding the spin-off of Xylem from ITT. The relationship and productive dialogue has sustained even as new members of both entities have assumed responsibilities and continued the rich dialogue and engagement that perpetuates through today. The Xylem leadership team and Board of Directors has valued that the principled nature of the approach and strategy from the Pictet team has been consistent while also adaptive to changing circumstances and markets.
Our conversations with Pictet have ranged broad topics in our business and the water sector as a whole, but we have also continued to lean on the Pictet team’s perspectives for opportunities and challenges in ESG and that of sustainability, of which we consider Pictet to be one of the pioneers and most thoughtful investment firms in the impact/ESG investing sector. Engagement and two-way dialogue is at the heart of this partnership approach and ensures discussions are of mutual benefit. Some specific examples have included discussing the merits of the ITT Spin-Off prior to 2011, and more recently, exchanging with the fund management team on the most appropriate sustainability reporting frameworks, digital technology adoption of customers, and metrics in senior management compensation.
We look forward to many more years working together, as partners, with the Pictet team.
Matthew Latino, Xylem
On behalf of the Xylem Leadership Team and Board of Directors
Veolia and Pictet Water have a long term history of ongoing dialogue between the investment team, the management team and the board of directors, focusing on the opportunities and challenges surrounding ESG topics and that of sustainability.
The high quality ESG requirements from the Pictet Water Team for all the companies they are invested in has allowed us to increase the level of our ESG rules to the best in class standards.
Discussing the merits of linking executive’s remuneration to its long-term sustainability goals, or more recently, exchanging with the fund management team on board independency and overall governance of the company are two good examples to illustrate the benefit of this long term dialogue.
Ronald Wasylec, Deputy Chief Financial Officer, Veolia
Building Bridges Summit 2021
Pictet is one of the main sponsors of the 2nd edition of Building Bridges, which will take place from 29 November to 2 December in Geneva.
Building Bridges aims to bring together international institutions and the financial community to advance sustainable finance through concrete actions. Taking advantage of Switzerland's unique ecosystem, Building Bridges brings together a diversity of international actors from finance, government, the UN, NGOs and academia.
The Building Bridges Summit will host a panel of Swiss and international leaders and world-renowned speakers around a common vision and goal: to accelerate the transition towards a global economic model aligned with the imperatives of the UN Sustainable Development Goals, with finance as a catalyst.