Groundwater issues:
hiding in plain sightWorld Water Day 2022

The issues around groundwater
Every year since 1993, the United Nations (UN) has marked World Water Day on
22 March, shining a spotlight on the importance of fresh water. World Water Day
aims to raise global awareness of the more than 2 billion people who, according
to UN figures, live without access to safe water, as well as the more than 4 billion
people experiencing severe water stress.

Key takeaways

World Water Day supports the overall achievement of Sustainable Development
Goal (SDG) #6: Clean Water and Sanitation for all. This year, the focus topic is“Groundwater – making the invisible visible”.

– A lack of separation of fresh
water and wastewater,
together with leaks, disrupt
the natural freshwater cycle
and lead to significant losses,
not least of an economic
natureNatural water cycle
Condensation

Precipitation– Mitigating water issues
supports the achievement ofmany SDG goals and could
more than double the overall
global economic return onwater spending

Evaporation
Transpiration

Infiltration
Groundwater

Value. Shared.

– Groundwater is seriously
burdened by issues suchas overuse, pollution andcontamination– Investments in providersof drinking water filtration
systems, efficient farming
solutions or producers ofsmart water meters andpressure sensors can help
alleviate the burdens
weighing on groundwater

World Water Day 2022 – Groundwater

Water on earth moves in a cycle; as a resource, it cannot be“used up” like fossil fuels. This makes water a very special
commodity. As it is used repeatedly, we must take carethat water remains available throughout the cycle. Unlike
other commodities, water does not have a specific valuedetermined by markets. It is perceived to be free, with zero
opportunity cost, i.e., it can be consumed in any quantity
without reducing availability for others. However, that might
not be true.
Water is probably the most essential commodity when it
comes to human life on earth, and fresh drinking water isscarce. The amount of water that can be used sustainably
is limited – and becomes more limited with heavy use andincreasing pollution.
Demand for drinking water is growing worldwide due topopulation growth, changing dietary habits and risingliving standards. Groundwater is the primary source of fresh
water for almost half the world’s population but in many
parts of the world reserves are being depleted faster than
the natural cycle can replenish them. This “vicious circle”
has a devastating impact on the environment, harming
ecosystems and creating desertification.
Falling groundwater levels can also lead to seawater
intrusion and land subsidence. According to a UNESCO
report, more than 4 billion people are living in regions thatare experiencing severe water stress1, defined as occurring
when the demand for water exceeds the amount available
during a certain period, or when poor quality limits its use.
Significant investment in innovative solutions across thethree key areas of water efficiency, water quality and watersupply is essential to address global water stress and tosafeguard groundwater and corresponding ecosystems.
The one-trillion funding gap
The Organisation for Economic Co-operation andDevelopment (OECD) estimates that the necessary investment to cope with this challenge will need to exceed USD
1 trillion (a number with 12 zeros) before 2030 if we are toensure access to basic water needs and sound sanitation
solutions. 2 This represents a significant increase fromprevious estimates of around USD 600 billion.
Clean water is strongly linked to a broad range of thesustainability issues connected to the other SDGs, including
healthy living conditions, social balances and decent
economic growth. Mitigating water issues supports theachievement of many other goals. According to estimates

More than 80% ofwaste water thatflows back into
the groundis contaminatedfrom the World Health Organization (WHO), the overall
global economic return on water spending is USD 2.00 foreach dollar invested.3 Creating universal access to sanitation could increase this to USD 5.50 per dollar invested –improving health conditions. This creates potential market
opportunities for public and private stakeholders.
Contamination and leaks
Groundwater is burdened by many issues: from overuseto pollution. For example, more than 80% of the world’s
wastewater – and more than 95% in some developing
countries – is still released into the environment without
treatment.4
The contamination of groundwater due to a lack of separation of freshwater and wastewater disrupts the naturalcycle. Modern wastewater treatment therefore aims toremove contaminants from sewage, generating effluentthat is ready for discharge to the local environment orready for reuse, thereby preventing water pollution fromraw sewage. High-end ultraviolet (UV) equipment solutions,can kill germs in drinking water and enhance quality, while
simultaneously making the use of chemicals redundant andlowering the energy used in the process of cleaning water.
The loss of fresh water because of issues within water
infrastructure is another (unnecessary) burden on groundwater. In countries like the US or the UK, large parts of thewater infrastructure date back more than 100 years. In
the UK5, 3 billion litres of drinking water does not reachend-customers every day due to leaks. This is even more
dramatic in the US, where the economic loss amounts to
USD 9.6 billion every year6. Repairing this infrastructureis crucial from an ecological point of view as much as an
economic one, creating attractive business opportunities
for utility companies.
Solutions for strained water systems

Groundwater is theprimary source ofwater for around
50% of the world’spopulation

Industrial companies offer smart water meters, pressure
sensors and network management software, providing
critical information about the health of a water distribution
network. In combination with artificial intelligence software,
real-time data gives network operators the informationnecessary to identify risks, detect the exact locations offailed pipes, and reduce the real water losses without
interrupting operation of the network.
Speciality engineering consulting companies leverageknowledge to create further overall benefits for society.
2World Water Day 2022 – Groundwater

Due to the recent drought periods in California, the demand for recycled water has increased, and is actively
supported by most cities and communities.
Considering prolonged periods of drought and severe
water crises it is all the more important to identify andinvest in companies that help to expand the performanceof wastewater treatment plants with technologies likemembrane bioreactors that increase a plant’s waterproduction in a cost-efficient way.

ideal solution for providing optimal irrigation with precisionapplication, saving water compared to traditional flooding
solutions and thus increasing output while conserving
resources, and reducing waste. Precision agriculture
enables a more accurate application of pesticides andherbicides. The more localised application means that only
the necessary amount is used, instead of a widespread
distribution, ensuring that significantly fewer chemicals end
up in the soil, and that groundwater is less polluted.

Agriculture’s weight on water stress

Redirecting capital flows to sustainable water solutions

The agricultural sector places a significant burden on
groundwater through the often-indiscriminate use offertilisers, and the potential pollution from chemical run-off.
The globally growing agricultural industry represents thelargest chunk of global water demand (more than 70%7).
Often, extensive farming happens in regions which arealready water-stressed. In Europe, for example, the dry regions in the south of Spain are a prominent producer of fruitand vegetables for consumption in Central and Western
Europe – relying heavily on groundwater. Accordingly,
solutions which enable more efficient farming are powerfultools to mitigate water stress, protect groundwater sources
and avoid desertification. Precision technology presents anWith water scarcity spreading worldwide and with a rapidly
increasing water use the structural imbalance between
water supply and demand continues to widen. Althoughwater spending is on the rise, and governments andcorporates alike have begun to realise the need for urgent
capital expenditure there is still a considerable mismatch
between capital requirements and available funding.
Allianz Global Investors identifies companies that actively
provide solutions to water scarcity and water quality
issues, and which help to improve the sustainability ofwater resources. By investing in those innovators, we help
redirecting capital flows to sustainable water solutions.

3World Water Day 2022 – Groundwaterhttps://www.unwater.org/publications/world-water-development-report-2019
OECD: “Water-Growth-and-Finance-policy-perspectives”, August 20163
WHO: “Global costs and benefits of drinking-water supply and sanitation interventions to reach the MDG target and universal coverage”, June 2012;
4
World Bank: “Quality Unknown - The invisible water crisis”, 2019;5
Discover Water, Water UK; England and Wales, Apr 2019 - Mar 2022;
6
https://sensus.com/solutions/leak-management;7	UN Summary Progress Update March 2021: SDG 6 – water and sanitation for all.
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