Innovating water security: Watermarq's data-driven solutions for drought response and investment planning

The Challenge

The Contracts for Innovation’s Climate and Environmental Risk Analytics for Resilient Finance (CERAF) competition aimed to demonstrate and deploy innovative solutions that integrate climate and environmental factors in financial services. Only projects that had the potential to create a substantial positive climate and environmental impact to change business-as-usual in the finance industry were eligible for funding. 

The proposed solution by Watermarq aimed to catalyse investment by addressing water stress and enabling a better understanding of water risk.  Watermarq believes the absence of accessible, high-resolution data to inform decisions around water scarcity is contributing to acute under-investment in water security, and there is demonstrated demand from corporates, financial institutions, and public sector organisations for data solutions to address this. For example, the financial services industry is keen to identify water-related risks to assets (such as mining operations) that can inform investment decisions.

The solution

Watermarq leverages advances in Earth observation to develop high-resolution water supply and demand analytics, providing a ‘single source of truth’ for adaptive decision-making by governments, businesses and the financial services industry. 

Our solution aims to catalyse collective action through data. We take data through satellites, in situ measurements, and contextual information such as population dynamics, climate change models or local regulations, and combine it to create outputs on water availability, which indicates water scarcity.

– Adriana Calderon, Geospatial Analyst at Watermarq

Watermarq’s primary pilot project has focussed on the Zambezi basin, which is in the throes of a historic drought with 60% less rainfall than average at the time of writing (May 2024). Here Watermarq’s analysis can be used by decision-makers to plan infrastructure investments to adapt to events like this – potentially informing programmes such as the Lusaka bulk water supply project which is currently in development and aims to secure the future of the capital’s water supply for the next 20 years. 

Watermarq is a purpose-led organisation that aims to work on projects that have the greatest impact on water scarcity worldwide.  Grant funding is a central part of Watermarq’s strategy for building a sustainable business model, as it enables  research to create high-impact solutions for public sector users whilst also allowing development towards commercial products. 

Watermarq received almost £400,000 in public funding through Phase 1 and Phase 2 of the Climate and Environmental Risk Analytics for Resilient Finance (CERAF) Contracts for Innovation competition. This investment has been critical to the development of the business, enabling them to scale up and develop further products. 

Contracts for Innovation is part of a public sector procurement culture shift that creates a simpler and more flexible commercial system that aims to stimulate UK economic growth by harnessing the power of government procurement to help the public sector become an early adopter of cutting-edge innovation and stimulate growth in the private sector. The funding received by Watermarq is part of the £1.8 billion of 100% funded Research and Development contracts awarded since 2008 to organisations that can respond to public sector needs without market solutions. 

The opportunity for the UK

This data can improve people’s lives in water-scarce areas of the world, but it is also useful to the UK.  According to CEO Water Mandate, the Thames Valley is one of 100 priority basins worldwide experiencing water stress. The application and use of tools such as the solution developed by Watermarq, enabled by the SBRI funding, has the potential to support activities that will mitigate the effects of water scarcity and stress in the UK. 

This SBRI award has certainly supported our business to grow in terms of people, revenue, and product development. We have retained a working relationship with the financial services organisations supporting this SBRI project, allowing us to continue to innovate with feedback from pioneer firms.

– George Carew-Jones, Operations Lead at Watermarq

Organisations that have previously received Contracts for Innovation funding and Innovate UK support report a combined increased turnover of over £1bn, with an average additional turnover of £701k per company. A third of organisations reported that their solution had been procured, either by the challenge owner or another organisation, and 60% said their project would not have proceeded without this support. 

The future

Watermarq aims to provide investors with a range of new products, including water risk reporting and has ambitious plans to build on their work in Zambia to achieve water security worldwide.  

Contracts for Innovation enables innovators to address the challenges facing the world today while improving the UK’s public services. It is part of Innovate UK’s ambitions for net zero, digital, and technologies, healthy living, and places that will collectively bring sustainable prosperity to economies, people, and the planet. 

The undervaluation of water is a challenge that must be addressed to secure human well-being and resilient economic development into the future. Our solution can help to improve the lives of many people.

– Bethan Adams, Innovation Lead at Watermarq