The Chicago Council on Global Affairs is pleased to present the 2019 Next Generation Delegates blog series. This year’s Delegation was comprised of 20 outstanding students from universities across the United States and around the world studying agriculture, food, and related disciplines. We were thrilled to feature these emerging leaders at the Global Food Security Symposium 2019, and look forward to sharing the exciting work of this extraordinary group.
This year’s Global Food Security Symposium, Managing Water for a Nutritious Food Future, left me thinking about the ways that we as professionals in the concentric areas of agriculture, nutrition, food security, and international development can be deliberate and strategic about our contribution to mitigating water scarcity.
From the wide array of organizations represented at the Symposium it is clear that there are countless ways to approach water scarcity through economic development. As an impact investing fellow, I found Recommendation II of the 2019 report From Scarcity to Security: Managing Water for a Nutritious Food Future a compelling means to address the issue. The recommendation, among four aimed at various stakeholders within governments, NGOs, and the private sector, is to “ease the challenges that hinder greater private-sector investment to expand sustainable water development for food and nutrition security.”
The report outlines specific recommendations, such as making development finance tools easily accessible to private sector investors, as well as continued investment in digital mapping of water resources and incentives for sharing these data amongst stakeholders. In addition to those actions, development funds devoted to water security projects, such as efficient irrigation and filtration systems, would provide another outlet for innovative solutions, particularly if the funds were administered through an impact investment vehicle.
Impact Investment as a mechanism for improved water security makes intuitive sense. While impact investment often aims to address gaps in economic development, it is challenging to measure the true impact the investment has on its on intended outcome, let alone the anticipated financial return. The potential advantage of water security projects as impact investments are in the “enhanced due diligence,” if you will, as governments are particularly concerned with their water supply for a variety of reasons; as a necessity for daily life, a critical input for agricultural purposes, and a highly valuable commodity.
Impact investment in this realm has the opportunity to forge strategic public-private partnerships and strengthen critical sectors of the economy. For example, investment in small-scale, farmer-led irrigation systems bolsters the agricultural sector in addition to creating more water-efficient systems in food production. Furthermore, water security as an investment prospect makes sense from an environmental, social, and corporate governance perspective, as larger firms aim to diversify their portfolios and mitigate some of the downstream risks associated with water scarcity, pollution, etc.
Investment solutions won’t address all of the problems contributing to water scarcity. However, financial mechanisms in concert with government policy (for example, subsidization of efficient irrigation systems or incentives for conservation practices) have the potential to alleviate some driving factors of scarcity and stimulate true economic development.