Cost, Compliance Main Drivers for Firms’ Water Management

DNV GL and the United Nations Industrial Development Organization

by | Mar 17, 2015

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DNV GL and the United Nations Industrial Development OrganizationSome 70 percent of companies consider water management issues relevant to their business strategies, according to a report by DNV GL and the United Nations Industrial Development Organization.

This percentage climbs to 85 among firms using water in their production processes.

The survey also finds one in five companies using water for production is not even aware of the legislation on water in their country. Just over a third of companies around the world already have a water management policy.

The study involved over 1,900 professionals from businesses in different sectors in Europe, North America, Central and South America and Asia.

The report finds that water management remains mainly a matter of efficiency, and that reducing consumption tops companies’ main concerns.

Driven by measurement and optimization needs, half of the companies undertook water management initiatives in the last five years. The three most common initiatives are tracking water usage, setting specific goals on water issues, and investing in water efficient devices.

Initiatives are not motivated by the chance of gaining a competitive advantage, nor by pressure from stakeholders. Only 10 percent of reporting companies are driven by a requirement to disclose hydric performance; pressure from customers and other stakeholders is a minor reason. Compliance with laws and economic reasons are the main drivers.

The paper also shows that companies benefited from water-related initiatives especially in terms of compliance and savings. Economic constraints and the absence of pressure and of an informed awareness on the matter are the main obstacles to progress on water management.

On one hand, businesses are hindered by the lack of management awareness and of consensus about what to do. On the other, they report a lack of financial resources, return on investment and the need to focus on short-term results.

The report says companies expect to focus more on water management in the future and potentials bound to these aspects are very high, both for the reduction in environmental accidents and for the improvement of their performance, thanks to an increase in financial savings and competitive advantage. Activities bound to efficiency will remain the most common actions but there will be significant increases also in more sophisticated activities like staff training and audits.

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