Too little, too much - The challenges of water

23-6-2017 - The importance of water is unquestioned. There is no life without water and trends such as global warming and an increasing world population put water at the forefront. On a positive note, solving water problems will provide many business opportunities in the foreseeable future. As a result, water is increasingly at the forefront of our clients’ and our own minds.

Committed to water solutions

ING is already financing many water solutions all over the world. From large infrastructural water projects by our structured finance team, to small scale water solutions to people in developing countries. But ING wants to explore more financial solutions that help solve water challenges. Both in terms of financing protection measures against ‘too much water’, as well as increasing water availability in cases of ‘too little water’ and providing solutions for ‘too dirty water’.

Building on expertise

Knowledge and business go hand in hand. ING’s Economics Department has prepared a multi-infographic and a report to grasp the impact of water challenges on different sectors. The high dependence of key sectors on water and their interconnectivity was researched to show how these sectors may need to compete for water in the future. Linking this information with flood risk data gives a further indication of the potentially far-reaching consequences of water mismanagement. We will continue our research activities in this field to further support ING’s contribution to water-related challenges. 

Water report image 2

Click here to open the infographic in PDF format, and then click one of the 60 countries for the main country data.

Industrialisation is putting the world’s water resources under huge pressure

With consumption expected to grow by 2% a year, demand for fresh water is rapidly approaching the currently available supply. By 2040, this could lead to a gap of 50% between the available (sustainable and reliable) supply of fresh water and demand. If no change is made to climate policy, 29 of the world’s 60 largest economies, countries that currently make up 57% of the world economy, will face a serious risk of water shortages. This emerged from the ‘Too much, too little’ report published by the ING Economics Department.

Rising demand for fresh water as a result of industrialisation

As a result of industrialisation, industry around the world is expected to use 4% more water each year in the future. Consequently, industry’s share of global water consumption will rise from 21% to an estimated 38% in 2040. Power stations in particular are driving water consumption and for this reason are increasingly being located on the coast in order to be able to use seawater.

Water-intensive sectors are in countries with a serious risk of ‘water stress’

Agriculture is by far the most water-intensive sector globally, consuming 800 litres of water to add value of $1. In the energy sector the figure is 300 litres and in industry 11 litres. Most production in these sectors takes place in the 29 countries at serious risk of ‘water stress’, meaning that demand for water is at least temporarily greater than supply or that insufficient good quality water is available. For example, 88% of coal mining, 80% of the textile industry and 74% of global agriculture is located in these countries. The traditional conflict between water for energy and water for food will extend to other sectors such as metals and clothing.

Share of world total of the 29 countries with a serious risk of water shortages, by sector

Water graph 2

Source: calculations by ING Economics Department, based on Aquastat, Oxford Economics

Meet us at the following events to talk about water crises solutions

World Water Week 2017 27 August-1 September

Stockholm City Conference Centre,

Stockholm, Sweden

Amsterdam International Water Week 30 October-3 November

RAI Convention Centre, Amsterdam,

the Netherlands