Experts emphasize that all types of financial instruments are necessary to address water management at Impact Week Bilbao 2024

Bilbao, November 29, 2024 - Following the recent catastrophic floods in Spain’s Mediterranean coast caused by river overflows and heavy rains linked to the weather phenomenon known as DANA, it became crucial to discuss solutions within the framework of Impact Week 2024 in Bilbao. Experts addressed how to prevent such events by focusing on water cycle management during the panel discussion organized by Social Nest Foundation: "An Integrated Finance Approach to Solve the Water Crisis".

Representatives from Ambition Loop, Commonland, Sonen Capital, and Pioneers of Our Time analyzed the topic from a financial perspective. “According to the UN, the annual funding gap to address water needs and achieve the SDGs is €2 trillion, and only 16% of the necessary capital is currently being invested. Why are we not addressing the risks posed by unstable water access?” With this question, Marta del Castillo, CEO of Social Nest Foundation and moderator of the panel, encouraged participants to delve deeper into the issue, also noting that by 2050, water demand is expected to exceed available resources.

Raul Pomares, founder of Sonen Capital, emphasized: “Water is the basis of all life. To address such a critical issue, we need to apply a wide range of financial instruments, from grants to investments. There are also other options, such as investing in bonds to develop green infrastructure or encouraging pension funds and insurers to consider more patient investments, like nature-based solutions”.

He added: “We must first invest in research and educate financial institutions about the implications of managing water cycles and their impact on the economy, as there is often a lack of awareness about the consequences of poor management”. Pomares highlighted the importance of attracting traditional investors to nature-based solutions and water investments, not only because of their vital role in sustaining life but also because they represent a strategic way to diversify and reduce risks, being decoupled from traditional financial sectors and their volatility. He also noted: “Philanthropy has a role to play in supporting and driving policies that channel funding toward holistic watershed management”.

Daniel Valenzuela, Director of Regenerative Finance at Pioneers of Our Time, posed the question: “How can we make green infrastructure an attractive investment, similar to what we are achieving with grey infrastructure? To do so, we must work at an ecosystem level”. He explained that “climate change is just one variable behind water scarcity, which is also heavily influenced by landscape management. In most ecosystems, a significant portion of rainfall depends on the local environment, making it crucial to focus on landscape-scale management. Technology can be a key ally in understanding our landscapes and their evolution”.

Facundo Echebere, co-founder of Ambition Loop, stated: “90% of the water footprint of food companies comes from agricultural production, where there is a disconnect between the food system and the water embedded in its supply chain. It is crucial to work on corporate governance to ensure companies understand and take responsibility for the impact of their value chains”.

In alignment with this perspective, Ana Kláric, Landscape Finance Manager at Commonland, shared: “We believe that to move beyond traditional financing models, we need to adopt a more integrated approach to investment. Supporting local organizations working on the ground to invest in water restoration is essential”. She further explained: “It’s important to assess whether business models are sustainable. While not everything can be monetized, it can still be valued”.

Economically Sustainable Models

In this context, Social Nest Foundation presented the report “Transforming Europe: The Case of Five Impact-Driven Companies Changing the Rules of the Game”, which examines practical case studies of European startups with significant social and environmental purposes (Too Good To Go, Cocircular, Climate Farmers, and Qida) that have scaled profitably.

Developed as part of the European Innonexus project, the report concludes that access to flexible, patient, and catalytic funding mechanisms is essential for impact-oriented business models to remain mission-driven while scaling.

The report also highlights the importance of hybrid leaders who combine traditional skills with the ability to collaborate effectively. Similarly, it recommends fostering strong communities to create collective awareness and drive systemic societal change. Strategic partnerships should align with the organization’s mission and impact goals, ensuring integrity and commitment from investors, partners, and clients.

Additionally, the report emphasizes the need for a holistic and proactive responsibility beyond traditional metrics to guide sustainable growth and lasting impact.

Finally, the report underscores the role of technology as a tool to enhance reach and operational efficiency. From AI-driven supply chain optimization to blockchain-enabled traceability, technology acts as a catalyst for efficiency, transparency, and amplified impact.