In this context, 1 Papo Reto concludes its coverage of the 2016 Water Forum, promoted by the Brazilian Business Council for Sustainable Development (CEBDS), with an exclusive interview with Gustavo Pimentel, managing partner of Sitawi, a “social bank” based in Rio de Janeiro.

In the surveys led by Pimentel, it became clear that the value of water is already being measured by companies. After all, faced with the expectation of scarcity of this precious and finite liquid, it is necessary to anticipate all possible scenarios. The following are the main excerpts from the chat:

Why did Sitawi, a social “bank”, decide to get involved in research on the water issue in Brazil? 

Since 2013, Sitawi has been operating a Sustainable Finance program, under my responsibility, where we provide consulting and research so that financial institutions and investors can incorporate socio-environmental issues into their strategies and investment decisions. We already have models for several topics, such as water, waste, climate change, but also human rights, community relations and human capital management. We understand that this program contributes to our mission of mobilizing capital for positive socio-environmental impact.

From what was exposed at the seminar promoted by CEBDS, it was clear that water is already seen in the productive sector as an element that impacts the future of companies. From a strategic point of view for the economy, have your studies already shown who loses most from water scarcity/mismanagement in Brazil?

The impacts of water vary by region, sector and company size. Large companies, which have production plants spread across the country, end up having a protection: if there is a lack of water in a region, production temporarily moves to another unit. This was reflected in a sectoral impact survey we conducted to companies listed on the São Paulo Stock Exchange. Small and medium-sized companies, which in most cases only have one production unit, are highly exposed to the risk of shortages.

The financial sector, in general, has instruments that could be used to induce sustainable investments, through credit lines with more attractive rates. Are these mechanisms advocated by Sitawi?

Sitawi advocates for more capital, more types of capital, and better allocation to transform more lives. Therefore, credit lines with more attractive rates are not enough, as demonstrated by the low demand for BNDES lines for energy efficiency. There are non-financial barriers that need to be overcome to generate demand for these investments by the productive sector: regulation, internal competition for resources, and high perception of risk. On the financial side, better distribution of risks between the private and public sectors, and the participation of third parties such as performance certifiers and insurance companies could also unlock resources. And we need more pioneers who generate success stories. At SITAWI, we seek to generate these cases on a small scale, with our socio-environmental loans.