A 40 percent water supply shortfall is expected globally by 2030, according to the United Nations. This means a business as usual water management strategy won’t work — and represents a $63 trillion risk, according to CDP (formerly Carbon Disclosure Project).
Water crises present one of the top global risks over the next decade, according to the World Economic Forum. So how can corporations future-proof their water supply?
“With water, unlike other climate-change issues, geography is key, says Sissel Waage, director of BSR’s biodiversity and ecosystem services practice. “Understanding the specificity of hydrological and ecological systems, as well as the set of demands your company and others in the watershed and/or basin, as well as that of residential communities is essential.”
In an interview with Environmental Leader, Waage said the first step companies should take to future proof their water supply is to understand the situation in their business context. “Any business would do a competitive landscape assessment. So too should companies do a water risk assessment, and not just looking at regulatory and competitive landscape issues, but even related to just flushing the toilet and other very rudimentary things.”
Water Risk Analysis: There’s a Tool for That
Fortunately, you don’t need to be a hydrologist to do this. It’s an easy task, thanks to water tools such as WRI’s Aqueduct, Global Environmental Management Initiative’s Water Sustainability Tool, Ceres Aqua Gauge and other tools for identifying and assessing water-related risks.
The nature of the water risk will dictate options of how to respond to that risk. Companies with plants or suppliers in areas at risk of flooding, for example, will require different responses than those at risk of drought.
Waage points to the 2011 floods in Thailand that crippled automakers, hard-drive manufacturers and other industrial suppliers. “Many companies had never considered how Bangkok is a key manufacturing hub and that flooding could hurt their operations.”
Beyond simply understanding water risk and how to avoid it, corporations must address the root problem and invest in a solution that will either avoid or mitigate it, Waage says.
For example, Nike has developed a waterless dyeing process for fabrics and Nestlé has invested about $7 million into a California milk factory to transform it into zero water factory, meaning the plant will not use any local freshwater resources for its operations. Meanwhile Coca-Cola, in partnership with the World Wildlife Fund, is working to “replace” the water it uses in its beverages and their production globally and expected to meet its 2020 water replenishment goal by the end of last year.
How Water Technology Can Help
The key to future-proofing water supply is to view it holistically, says BlueTech Research chief executive Paul O’Callaghan.
“Corporate water risk is rising in terms of an agenda item” O’Callaghan said in an interview with Environmental Leader. “It’s an input that is necessary to economic survival. In the absence of water, it is very difficult to produce many of the goods we use, from dairy products to beer to computer chips. If companies are going to future proof, they need to look at water scarcity and water availability to their business and the communities in which they operate. They must take a much more holistic view on this.”
Technology can help, too. Next month BlueTech Research will host the BlueTech Forum in San Francisco, featuring presentations by water technology firms about how technologies including water reuse, desalination, resource recovery and the internet of things, among others, can help companies future-proof their water supplies.
Among other speakers and case studies at the event: Water Planet will discuss how its ceramic membrane technology allows it to treat and reuse industrial wastewater. Spiral Water Technologies will showcase its self-cleaning filters to remove solids from several industries’ wastewaters, including food and beverage, fracking and other industrial applications. And Apana’s automated, cloud-based analytics platform that scans hundreds of potential failure situations and pinpoints water waste to help hotels and other major corporate users improve water efficiency.
Business Opportunities in Saving Water
Ten years ago, the conversation around treating wastewater was all about compliance, O’Callaghan says. Today, it’s about recovering raw materials. “There’s a very compelling return on investment when you approach an industry and say, ‘Do you know how much raw materials you are losing down your pipes? We can help you recover that.’ Now water companies’ have corporations’ ears because they are talking their language, making a case for return on investment and saving them money.”
Not only does this present an opportunity for water technology companies, it presents an opportunity for corporations as well. For example, investing in water infrastructure and community water mitigation projects can earn companies preferential permitting. This means your projects get built faster and you don’t need to spend as much time and money on permitting — “a huge money sink for companies,” Waage said.
There’s also the “preferred company” opportunity. “There are companies that are beloved and people are very local,” Waage explained. “There is enormous opportunity in becoming a beloved company or maintaining that status. Even more than climate, water is a deeply emotional issue.”
And as water risk continues to intensify, it’s becoming an increasingly critical business issue as well.
Don’t miss our Environmental Leader 2016 Conference in June.