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10 Jun 2012

HSBC invests $100m in water projects to improve lives and boost economic development

HSBC is investing $100m to help transform the lives of more than 1 million people through providing access to safe water and spearheading water protection projects. The bank will be working with leading charities on social and environmental projects which have the potential to provide long-term economic benefits to local communities.

HSBC invests USD100 million in water projects

The five-year programme, launched by HSBC Group Chairman Douglas Flint, involves working in a groundbreaking partnership with WWF, WaterAid and Earthwatch.

Mr Flint said: "Water is essential not only to human health and happiness, but to the prosperity of individuals and the economic development of nations." He pointed out that poor management of scarce water resources could mean "GDP growth in river basins would not materialise", while investment in the provision of safe water and sanitation can yield significant returns.

The launch of the HSBC Water Programme coincided with the release of a report by Frontier Economics, which showed that every $1 invested in water infrastructure can deliver nearly $5 of wider economic benefits over the long term, in addition to the social and environmental benefits.

Frontier Economics, an economics consultancy with wide experience of the water industry, was commissioned by HSBC to research the links between investment in water projects and economic growth.

José Carbajo, Associate Director of Frontier Economics, said: "The economic benefits from improved access to safe drinking water and sanitation can be substantial. Several countries in Africa and Latin America stand to gain the equivalent of 5% or more of their annual GDP by reaching the Millennium Development Goal.  The economic gain as a share of GDP is three times bigger, or more than 15% of their annual GDP, if universal access becomes the target."

Potential annual economic gain from improved access to water and sanitation as a percentage of GDP

Frontier believes that in some African countries, the investment required to secure universal access to water would be paid back in only three years.

Nearly 800 million people globally lack access to safe water, and 2.5 billion lack access to basic sanitation.

With the support of the $100m HSBC Water Programme, three non-governmental organisations (NGOs) will carry out projects in both developed and growing markets:

  • WWF will work with over a thousand businesses and over a hundred thousand fishers and farmers in five river basins in Asia, East Africa and South America to promote more efficient use of water in their practices
  • Earthwatch will 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
  • WaterAid will help 1.1 million people gain access to safe water and 1.9 million to improved hygiene and sanitation in Bangladesh, India, Nepal, Pakistan, Nigeria and Ghana

Mr Flint explains that the Water Programme's immediate humanitarian and environmental benefits can also lead to broad, long-term economic development. This is good for the health of the global economy as well as those businesses and communities that will be directly involved.

"As a bank, we look at how the patterns of projected growth, trade and consumption will contribute to our bottom line. We recognise that, if the world continues to overshoot its resource capacity, there is the risk of localised, and eventually global, constraints on economic activity.

"The people of the world's major river basins currently account for about a tenth of world GDP, but by the middle of the century they could account for a quarter. Yet these are also precisely the same places where water resources are set to come under strain. This has the potential to straitjacket growth, at the same time as causing untold harm to local communities.

"The HSBC Water Programme will benefit communities in need, and enable economies to prosper."

Find out more about the HSBC Water Programme