The growth engine Davos keeps overlooking

As leaders gather in Davos this week under the banner of “A Spirit of Dialogue”, their agenda is crowded with familiar anxieties: sluggish productivity, geopolitical shocks, climate risks and the race to deploy artificial intelligence. Yet one lever that cuts across many of these concerns, and the wider 2030 Agenda, still sits at the margins of the conversation: how the world finances and manages basic services such as sanitation.

Halfway to 2030, the picture on water and sanitation is stark. WHO/UNICEF data show that 3.4 billion people still lack safely managed sanitation. UN-Water warns that progress on SDG 6 is “severely falling behind”. Meeting the goal by 2030 would require global investment in water, sanitation and hygiene to rise sharply to around $114 billion a year, with sanitation accounting for the largest share, roughly 60% of the total.

Closing this gap is not only a moral imperative, it is also a sizeable growth and climate-adaptation opportunity. In recent years, the UN’s Sanitation and Hygiene Fund (SHF) has been working with low- and middle-income countries to build national sanitation economies: webs of businesses and jobs linked to toilets, circular resource use and smart services. In just five African countries, SHF estimates that sanitation markets could generate nearly $19 billion in economic gains, jobs and environmental benefits by 2030. These sanitation markets represent exactly the kind of high-return adaptation investment opportunities that can protect people from climate-related water and health shocks while raising incomes and productivity.

Across emerging markets, governments and firms are piloting resilient sanitation systems built on non-sewered, decentralized, off-grid and on-site technologies designed to keep working when sewers are flooded, power fails or rainfall becomes erratic. At the same time, SMEs are manufacturing toilet hardware, emptying pits and septic tanks, turning sludge into fertilizer or fuel, and using digital tools to optimize collection and monitor disease. These local, modular systems are quintessential assets in emerging adaptation markets, yet the sector still appears too small, fragmented and risky to attract large-scale capital.

Three problems stand out. First, sanitation investments are often packaged as isolated projects, making it hard for institutional investors scanning for billion-dollar opportunities to see how they add up to a meaningful asset class. Second, policy and regulatory risks, from undercapitalized utilities to politically sensitive tariffs, deter long-term capital. Third, sanitation’s benefits are poorly captured in the language of risk and return, even though they are exactly the kind of adaptation dividends climate finance is supposed to unlock.

Governments can use Davos and other global forums to push for coordinated commitments to national sanitation investment pipelines: coherent portfolios that group utility upgrades, appropriate technologies, circular sanitation infrastructure and sanitation SMEs into investable programs aligned with climate and development strategies. If finance ministers bring portfolios of sanitation investments, they will be speaking the language of institutional capital and positioning sanitation squarely within national adaptation investment plans.

Multilateral development banks and development-finance institutions can use guarantees, blended finance and local-currency instruments to de-risk first movers in sanitation markets. Coupled with regulatory and governance reforms, this can give investors predictable rules while protecting populations and help close the gap between commitments on adaptation finance and delivery on the ground.

Institutional investors and corporates should recognize sanitation as a core element of supply-chain resilience and workforce productivity, not just CSR. Companies that rely on labor-intensive production in emerging markets cannot afford factories brought to a halt by blocked drains and failing sewers. Like power or transport, sanitation is core infrastructure in its own right – the hidden piping on which the rest of the economy runs. Including sanitation access and quality in risk disclosures and resilience plans would send a powerful signal that this is not a niche concern but a boardroom issue.

This year is also a turning point in the global water calendar. In December, the UN Water Conference will call for greater investment, innovation and political will on SDG 6. By the time delegates arrive, the question should not be whether sanitation matters, but how much capital is moving into national pipelines, and how much progress has been made in closing the financing gap.

If Davos 2026 is serious about cooperation, growth, people, innovation and planetary boundaries, then the conversation cannot stop at AI and green hydrogen. The sanitation economy will not solve every global problem, but without it, aspirations for sustainable, climate-resilient and inclusive growth will remain out of reach. In a world searching for new engines of prosperity that respect planetary limits, turning human waste into economic value is not a side issue. It is central to building the resilient, inclusive prosperity this “spirit of dialogue” demands.