The importance of river basins in driving global growth to rocket

HSBC Group Chairman Douglas Flint announced the launch of the HSBC Water Programme, a new $100 million, five-year partnership with WWF, WaterAid and Earthwatch to tackle water risks in river basins; bring safe water and improved sanitation to over a million people; and raise awareness about the global water challenge.

The announcement comes as a new report from Frontier Economics for HSBC reveals that by 2050, the top ten river basins by population are expected to produce a quarter of global GDP - a figure greater than the combined future economies of the US, Japan and Germany - and a sharp increase from a current contribution of 10%.  The nine most populous river basins are in growing and fast-growing markets:

However the report also forecasts that by 2050, without any improvement in water resource management, seven of these basins will face unsustainable water consumption, with significant to severe water scarcity, meaning at least 30% of the natural water run-off is being consumed.  This could mean the GDP growth expected in the river basins would not materialise.  In addition, ecosystems home to a quarter of the global population would see further permanent damage, affecting communities’ and businesses’ ability to thrive.

HSBC Group Chairman Douglas Flint commented, “Today’s findings show that the future of river basins is critical for global economic growth.  Rapid, collaborative action worldwide is needed to improve water resource management in river basins.  The report also highlights the powerful economic rationale for improving access to freshwater and sanitation, at a time when total aid for water access and sanitation has actually declined. The HSBC Water Programme will benefit communities in need, and enable economies to prosper.”

Blue water consumption in 10 most populated river basins

The HSBC Water Programme will tackle water supply and sanitation. In 2010 nearly 800 million people were without access to safe water, and 2.5 billion without access to basic sanitation.

The report found that achieving the Millennium Development Goals (MDG) on water supply and sanitation worldwide would amount to an equivalent of more than $56 billion per annum in potential economic gains between now and 2015; and that providing universal access to safe water and sanitation would imply potential economic gain of $220 billion per annum.  Providing universal access in Brazil, India, and China alone would amount to an equivalent of more than $113 billion.

Frontier Economics also found that globally the average return on each dollar invested in universal access was just under $5, even after taking maintenance costs into account.  In Latin America the figure is $16 while in some African countries, the capital investment would be paid back in only three years.  Several countries in Africa and Latin America would stand to gain an average of more than 15% of their annual GDP from achieving universal access.

Throughout the HSBC Water Programme, HSBC will share findings and insight to contribute to global understanding and best practice among NGOs, policymakers and businesses, as well as engaging its own employees.

WWF Chief Executive David Nussbaum commented: “Recent figures from WWF show that freshwater ecosystems have declined by 70% since 1970 and that, already, 2.7 billion people are living in river basins that experience water shortages at least one month a year – these figures, alongside the research commissioned by HSBC, demonstrate why it is so important for us to take action to protect our freshwater resources now. As part of the new HSBC Water Programme we’ll be working with over a thousand businesses and over a hundred thousand fishers and farmers to promote more efficient use of water in their practices, while working with governments across the globe to advise on better river basin management which will help to secure water supplies for the future needs of both the human population and the environment.”

Eve Carpenter, COO of Earthwatch commented: “The HSBC Water Programme will enable Earthwatch to set up research projects in over 20 cities worldwide, working with local conservation partners to address urban water management issues.  Thousands of HSBC employees and their wider local communities will take part in this global citizen science programme, collecting robust scientific data using innovative technology.  These data will support, inform and transform policymakers’ water resource management plans.”

Barbara Frost, CE of WaterAid commented, “The HSBC Water Programme will transform lives through its support of WaterAid’s work.  This exciting 5 year partnership will result in 1.1 million people gaining access to safe water and 1.9 million to improved hygiene and sanitation in Bangladesh, India, Nepal, Pakistan, Nigeria and Ghana.”

Commenting on the Global strategy on Water, Nick Nicolaou, CEO of HSBC Sri Lanka and Maldives, said, “HSBC supports environmental projects because we understand that continued economic development is having a significant impact on the world’s eco-systems and resources, which are essential to enable businesses and communities to flourish. We are excited about this new five year programme focusing on water and how it helps communities, similar to the climate change programme that was launched five years ago and successfully completed in Sri Lanka. With this new phase, we are confident that more emphasis will be placed in the following areas.

(a) Better water storage and access to water

(b) Ground water management

(c) Water awareness

As the first step towards creating awareness on the HSBC water programme, we are happy to support an exhibition titled ‘Deliverance’ by renowned artist Anoma Wijewardene that aims to highlight the importance of managing our water resource and climate change. The exhibition will be open to the public on 22 June 2012 from 3 p.m. onwards for a period of one month.”