By Mehmood Khan, PepsiCo
Water scarcity is one of the greatest risks facing humanity and the global economy. Water shortages—from the U.S. to Peru to India—are impacting every facet of our society, including our global food supply. The UN estimates that by 2025, 1.8 billion people will live in countries or regions in which water is scarce, and approximately two-thirds of the world’s population could soon be living under water-stressed conditions. With ratification of the UN Sustainable Development Goals just days away, governments, as well as business leaders must take action to meet these challenges.
Water is a fundamental human right, and water stress has distinct, deep consequences in communities around the world. It is the responsibility of every company, government and public institution to develop solutions that meet acutely local needs, and scale those with widespread applicability to drastically improve water availability and efficiency.
The food and beverage industry, for example, must redouble its focus on innovation and collaboration, to do more with less. This work includes product reformulations, sustainable agricultural practices and manufacturing and operational efficiencies, all of which can lead to water efficiency gains.
This is not simply good for society. Promoting water stewardship is also a strategic investment in long-term business resilience and sustainability. PepsiCo for example, decreased its absolute water use by approximately one billion liters last year and achieved cost saving of approximately $17 million in 2014 alone from reducing our water use per unit of production. Overall, we have reduced our water use per unit of production by 23% since from 2006 to 2014, already exceeding our public target of a 20 percent reduction by the end of 2015. We report on these efforts in our newly released 2014 Sustainability Report and at the sustainability micro-site HowWillWe.com.
All industries are being impacted by the realities taking shape today, including droughts and extreme weather, and we applaud other companies that share our commitment to addressing this issue and contributing to meaningful solutions. Diageo is a great example. It has recently released its Water Blueprint, a strategy that outlines how the company will protect and manage its water resources globally, especially in the water-stressed areas where a third of its production takes place.
We can also learn from pioneering startups and benefit from cutting-edge technology. PepsiCo is developing an innovative approach to farming potatoes used to make our Lay’s chips and Walkers crisps. Working with farmers and academic partners in the U.K., including Cambridge University, we are deploying technologies through our “50 in 5” program to reduce the carbon footprint and water used to grow potatoes by half over a 5-year period. We have made great progress so far, enabling growers to decrease water use by 31 percent by the end of 2013 and cut their carbon footprint by 42 percent by the end of 2014, and we are on target to reach both our water and carbon footprint goals by the end of this year.
Partnerships are crucial, because global value chains are so large and involve many interconnected players. The public, private and non-profit sectors must work together. We have embraced this spirit of collaboration to reduce water usage in our operations and help to provide access to safe water in communities where we do business. For example, through the PepsiCo Foundation and in partnership with non-profit organizations, such as Water.org, Safe Water Network, Columbia Water Center, the Inter-American Development Bank, China Women’s Development Foundation and 2030 Water Resources Group, among others, we are helping local communities in Brazil, China, Columbia, India, Jordan and Mexico to provide access to safe water for millions of people through initiatives that include water conservation, distribution, purification and hygiene. It is through these kinds of collaborations that we have reached our goal to provide access to safe water to six million people in developing countries one year ahead of our target.
Systemic changes across sectors and among competitors will encourage innovation and wider adoption of proven tools and practices. To make an impact, we must look at the entire water use system, from end to end and embed sustainable water use into our products from the start. And while business has the ability and the responsibility to do more to address global water issues, governments should also promote and incentivize smart water use with tools such as research and development tax credits, matching funds and regulatory reforms to create a legitimate “enabling environment” that frees capital and stimulates sustainable, holistic water solutions.
Only by working together and rethinking our approach to global water stewardship—just as we have begun to shift our thinking on the issue of carbon emissions—can we enable water to be a resource that is abundant and flexible enough to meet the world’s needs in coming decades.
Dr. Mehmood Khan is PepsiCo’s Vice Chairman and Chief Scientific Officer, Global Research and Development and chair of the company’s Sustainability Task Force.