The Time to Invest in Sanitation is Now

World Toilet Day 2020 — Everyone talks about clean water, but access to sanitation is equally as important.

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Photo of a newly constructed household toilet in Cambodia. Courtesy of Water.org

By Elan Emanuel, Senior Associate, Investor Relations at WaterEquity

When discussing the global water and sanitation crisis, we mostly talk about clean water. Water is tangible, it’s visually beautiful, and the benefits of having access to clean water are easily understood. But, on this World Toilet Day, let’s move away from the dominant discourse, and turn our attention to sanitation — and toilets in particular — as a solution to a global challenge threatening the health, safety, and resilience of some of the world’s most vulnerable populations.

At WaterEquity, we believe the time to invest in sanitation is now.

Currently, 2 billion people lack access to a toilet or basic sanitation — that’s every 1 in 3 people[1]. Of these, 673 million people still defecate in the open, for example in street gutters, behind bushes, or into open bodies of water. These practices contaminate ground water that is used for drinking, cooking, bathing, and irrigating crops. Consequently, at least 10% of the world’s population is thought to consume food irrigated by wastewater[2]. This has profound environmental implications, and has linked open defecation and poor sanitation to some of the deadliest communicable diseases of our time — cholera, diarrhea, dysentery, hepatitis A, typhoid, and now COVID-19. These diseases impact not only the immediate health and well-being of affected populations, but also their long-term economic vitality — those who are sick are unable to fully participate in a thriving society.

While open defecation is harmful to humans and the environment in normal situations, the effects of climate change only makes things worse. During a climate event such as a flood, water and food systems that are already strained can become contaminated with human waste leading to the spread of disease, loss of income from failed crops, and increased economic insecurity. Events such as these are becoming more frequent — exhausting an already struggling environment, and further exacerbating the negative impacts of climate change on vulnerable populations.

Research shows that the biggest bottleneck preventing low-income consumers from accessing sanitation solutions is access to affordable financing. At least 600 million people without access to safe water and sanitation right now could be reached with improved water and sanitation services if microloans were made available to their families. When low-income consumers are empowered with access to microloans to pay for a household toilet they want as opposed to receiving one from charity, they are more likely to actually use this toilet over the long-term[4] — reaping the health and economic benefits long after the original loan has been repaid.

WaterEquity addresses this financing gap through a simple, yet powerful model: we provide debt capital to financial institutions in emerging markets to help scale their water and sanitation microloan portfolios. The microloans then enable low-income consumers to install water and sanitation solutions in their homes, such as a toilet, leading to improved health outcomes and disease prevention, educational opportunity, economic security, and increased climate resilience. The power of the capital markets allows us to provide affordable financing for borrowers and competitive returns for investors all at the same time.

At WaterEquity, we put clean water and sanitation on equal footing because we know that both solutions are interdependent on the other’s success. Without access to both water and sanitation, communities are unable to live up to their fullest potential. Join us in building out this global capital market that solves the most urgent issue of our time. Learn more at www.WaterEquity.org

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[1] United Nations Children’s Fund (UNICEF) Strategy for WASH 2016–2030: https://www.unicef.org/wash/files/UNICEF_Strategy_for_WASH_2016_2030.PDF

[2] World Health Organization (WHO) 2019 Report on Sanitation: https://www.who.int/news-room/fact-sheets/detail/sanitation

[3] Gates Foundation Study 2008 “Accessing Microfinance for Water and Sanitation”: https://docs.gatesfoundation.org/Documents/assessing-microfinance-wsh-2008.pdf

[4] United Nations 2011 “Microfinance, Poverty Reduction and Millennium Development Goals”: https://www.oecd.org/cfe/leed/2487864.pdf

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Elan Emanuel is Senior Associate, Investor Relations at WaterEquity. He is responsible for mobilizing investments and partnerships with a broad portfolio of investors to accelerate WaterEquity’s impact addressing the global water and sanitation crisis.

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