If you work for a big company, should you be worried about water? Should you looking for opportunities to make massive cost savings by tackling the issue? A new report says "yes", and explains why.
The research arm of this publication, the Ethical Corporation Institute, has just put out a new report on corporate water risk and use.
The "Must-Have Guide to Water Ethics, Footprinting, Programmes and Supply Security" report is all about, for companies, how water risks factor into operations, and what they can do to ethically manage water use
The reports findings make fascinating reading. Big companies, it seems, are starting to 'get' water risk.
Water use and efficiency is a tricky, always localised issue anywhere in the world, it seems.
It's also way more complicated to manage than carbon due to pricing issues and a lack of global standards and consistent reporting by water users, says the new ECI report.
Despite this, some large companies have already taken steps to tackle water usage efficiency, and are making some major savings often with simple steps.
Firms studied in the report include giants such as Molson-Coors, SAB Miller, Rio Tinto, Petro-Canada, Coca-Cola, Intel, Norwich Union, IKEA, Royal Bank of Canada, Dow,and Johnson & Johnson.
The report identifies and discusses 5 big water issues that companies are now confronted with: Water scarcity; Water costs and efficiency; Community partnerships and access to clean water; Water "footprinting"; Water "handprinting" and neutrality.
Concerns among the above mentioned firms around water analysed in the report include:
Insecurity of supply & inconsistent access
This emerged as the top concern among corporate interviewees.
Supply insecurity can be due to political reasons, such as a local government determining the amount of water a company has the right to access and setting stipulations for responsible use.
Companies spoken to for the report are also deeply concerned that supply can also be threatened by climate change issues such as increased and unpredictable occurrence of floods and droughts.
Parts of the world such as Australia, southern Africa, Central America, the Caribbean, southwestern South America, south-western US, and the Mediterranean are believed to facing increased frequencies of droughts and water scarcity over the next 50-100 years.
Human rights and population growth
Citizen access is a larger priority than company access. The global population is expected to surpass eight billion people by 2025. This will increase the demand for potable water, especially within developing countries.
“In a water-scarcity situation, our domestic users always get their water first before non-domestic use,” notes Brian Smyth, Head of Water Supply for Dublin, Ireland, in the new report.
Demographic and income changes
Historic trends show that as a country develops, its per capita use of water increases.
A study in 2007 showed that an average American used 2,480 cubic metres of water per year (2m litres); in comparison, a Chinese person only used 700 cubic metres of water per year.
Perceived stewardship or lack there of
In the report, Scott Meakin of Petro-Canada sums up public perceptions of water and business risk saying, "if stakeholders perceive there is a risk, then there is an issue and risk that business must address".
But its not all doom and gloom. The companies in the report, as red blooded capitalists always do, are looking for solutions to these challenges, and solutions that save money.
The report found five key areas of business opportunity for companies when it comes to taking action on water:
1. Appeal to consumer concerns.
Water stewardship is among top three consumer concerns, according to one recent study.
2. Approach water management as a competitive advantage
This may help prevent higher compliance costs when water regulations tighten.
3. Save money through more efficient facilities and methods.
Thomas Bergmark, Head of the Environment at IKEA says in the report that: “We’re very confident that over time we will reduce costs significantly by taking a structured and strategic approach to water management”.
For example, a Petro-Canada operation in Edmonton, Alberta, is being designed to accept grey water from the city, cleaned by the company, and then used in the facility before being re-released into the environment in a clean and ambient condition. In many large companies, these kinds of innovations are reaping some very real rewards. The new report looks into these in detail.
4. Reduce use now
The report found that many corporate leaders and other stakeholders are encouraging governments to raise the price of water to more accurately reflect its value.
Rio Tinto is currently working with a number of universities and research institutes in Australia to determine a price for water that includes risk factors and a value that reflects the ecosystem service that it also provides.
"We needed to make better decisions, going beyond net present value to account for environmental and social values of water,” says Kristina Ringwood, Principal Advisor, Environment, Rio Tinto, in the report.
Methods such as water footprinting can help a company monitor use, understand areas that are most water intensive, predict need, and therefore understand risk. For instance, Coca-Cola recently reached a water efficiency measure of 2.47 litres of water used for every litre of its product produced, a 21% improvement since 2002.
5. Promote water stewardship
Education of stakeholders will be key. This, says the new report, will also contribute to employee morale, and improve the company’s public image.
“based on our track record, we are getting new access to water” says Kristina Ringwood of Rio Tinto. Both discuss their views on water in detail in the new report.
A few companies have begun promoting water handprinting as philanthropic or corporate social responsibility (CSR) projects by the companies that execute them.
While this is often harder or impossible to quantify in footprint methodology, measures such as Procter & Gamble’s efforts to support the Millennium Development Goal #7 clean water for children campaign.
The report found that labels and audits are currently being considered.
To date, third party regulation on water is limited to certification of water efficient products – such as the US Environmental Protection Agency sponsorship of the Watersense label, and in Australia, the Water Efficiency Labelling and Standards Scheme.
However, LEED (Leadership in Energy and Environmental Design, US) or BREEM (Building Research Establishment Evaluation Method, UK) represent the next stage in corporate certifications.
They cover building infrastructure. Other companies have sought an NGO label, such as Rainforest Alliance, which uses a more holistic approach to environmental issues, including water use.
Finally, several new labels are emerging, with the intent to recognise responsible water users or measure water efficiency.
These include the Water Stewardship Initiative, the Water Wise Marque and the China Water Conservation Certification. All these are looked at in the new report.
Through case study analysis, the report details some major multinational company water strategies:
Rio Tinto shares lessons from their five-year-old global water management strategy in the new report. The publicaton also looks at Intel's approach in the US, and how Coke is working on community partnerships and access across operations. SAB Miller, a leader in water footprinting, is also studied. Finally, the report looks at Molson Coors and their approach to water stewardship.
Take a look at more information on the report, the "Must-Have Guide to Water Ethics, Footprinting, Programmes and Supply Security" by going to: www.ethicalcorporationinstitute.com/reports/water.