It has become even more obvious that water scarcity poses one of the largest overall risks to the planet, and therefore, to businesses worldwide. Despite successes in boosting water access to more people across the globe, the United Nations made water and sanitation one of its foremost sustainability goals.
The U.N. estimates that by 2050, when 9 billion people are expected to live on Earth, one in four citizens will be affected by chronic water shortages. The World Economic Forum identified water crises as the world’s largest economic risks over the next decade. Furthermore, Ceres, an NGO that advocates for sustainability leadership within the private sector, has long pushed for more proactive water stewardship, from more action at the corporate board level to pushing insurance companies to take water scarcity more seriously. More companies are paying attention to water-related challenges, but the road ahead is still a very long one.
But as Paul Reig of the World Resources Institute (WRI) points out, while companies and governments have found consistency in how they approach carbon emissions and climate change, a standardized approach toward economic risks related to water is seriously lacking. According to Reig, three main challenges stand in the way of businesses tackling challenges related to water scarcity.
First, a one-size-fits-all approach toward water stewardship is not tenable as water risks vary greatly depending on location. Reig reminds us that in the case of emissions, the impact of greenhouse gases is the same everywhere. But with water, the risks and solutions are far more complex. Water is a local source, not one that is global. What is the source of water across a company’s value chain? Where is that water discharged? Are there ways in which water use can not only be more optimized, but even reused so that companies score an economic benefit?
Campbell Soup Co., for example, is one large food manufacturer that has taken water risks seriously for years. The company has worked within its supply chain to instruct farmers and produce brokers on how they can minimize water waste. Depending on the type of water efficiency project in which Campbell’s has invested, the ROI of such an initiative has been as high as 20 percent — which scores points with all shareholders and stakeholders.
In addition, from region to region, water scarcity risks can stem from a variety of reasons, from aquifer depletion to polluted waterways to, of course, drought. One way in which companies can navigate around this problem is by partnering with NGOs to get a better feel for what is needed on the ground, especially in emerging economies. PepsiCo, for example, has long worked with Water.org to find ways in which to address water risks and access in nations including India. The textile industry, heavily dependent on water in manufacturing its products, has also become more proactive on water issues. Ikea says its close relationship with WWF has helped the company ameliorate its water impact across its supply chain.
Finally, while science has driven action toward the development of a broad framework to address climate change, there is no unified voice when it comes to water. Thanks to the long road to COP21, we have heard the relentless call to limit the increase in Earth’s atmospheric temperature to 2 degrees Celsius this century. There is no analogous clarion call when it comes to water. We can debate whether this is actually necessary, but the high-level goal of the world’s nations to halt climate change has not only made it easier to derive a common goal, but also makes this case an easier one to argue before the globe’s citizens.
To that end, WRI is working with companies, including Mars Inc., to create a more uniformed approach for setting water targets within the private sector. The goal is to create a platform by which targets can be set across a company’s value chain, from the earliest sourcing of materials until consumer end use. The group seeks to deploy a range of indicators that cover water quantity, quality, ecosystems and social impact and broad-based goals based on science — and, in fairness to many companies, such information in many parts of the world is still sparse. Considering the current plight water scarcity has on the world’s poor (mostly women), and the fact that diminished water means diminished business returns, the exact time to build on this momentum was, as always . . . yesterday.
Image credit: Leon Kaye