With World Water Day focusing minds on the issue of water scarcity, the need for businesses around the world to act fast on easing water shortages becomes more urgent. By 2030 global water demand is predicted to increase dramatically to a level 40% above current supply. This was recognised at the UN Conference on Sustainable Development in Rio last year, with UN-Water issuing a statement "the success of green economy depends on sustainable, integrated and resource-efficient management of water resources."
Currently, companies waste a huge amount of water. But the issue reaches beyond the factory gates. Energy shortages can be met with the purchase of generators; there is no such answer for water. Yet, water use has not, until now, been high on the business agenda. Our recent interviews with senior executives of large companies in the UK, USA, China, South Korea and Brazil found that only one in seven of those businesses had set water reduction targets or publicly reported on water performance. Most of the C-Level execs we spoke to do not believe they will need to make significant changes in their business operations to combat resource scarcity (including addressing water shortages) until 2018 and over 50% have not developed goals to reduce company water consumption, waste production or carbon emissions.
However, 86% were concerned that legislation is on the horizon, as governments around the world assess the vulnerability of water resources, and review water policies. This suspicion could be justified as last year, 45 of the world's most powerful CEOs signed a special communique at the Rio+20 conference to highlight the urgency of the global water crisis and called for a "fair and appropriate price" of water for agriculture, industry, and people. It is hoped that the introduction of a tariff will stop water being taken for granted.
It appears that businesses feel the issue is too large for them to tackle. They simply don't have the time or resources to invest in it. In considering what can be done now, the importance of certified measurement and management of water usage should not be under-estimated. Through rigorous, independent certification demonstrating commitment to reducing water use year-on-year, businesses can show publically their journey towards improved water stewardship. A formalised approach to certifying companies' water use serves the dual purpose of rewarding companies that are measuring and reducing their water use and highlighting those that are not. Initiatives such as the new Carbon Trust Water Standard fit exactly this purpose. It has already been adopted by some large businesses.
As well as not knowing where to start, companies are also delaying taking action on sustainability and resource efficiency as they see it as an obligation and a cost. Nearly half (47%) of executives we surveyed believe that acting on sustainability issues such as water scarcity would decrease profits. However, we know from our extensive work on carbon that good management of resources can lead to new commercial opportunities and thriving businesses. As companies begin to look for alternatives to the resources they are consuming, they can uncover more innovative products, processes and business models.
An inspiring example is Sainsbury's, which piloted the Carbon Trust Water Standard and is on track to save water equivalent to 393 Olympic sized swimming pools by the end of March. They have achieved this through a number of water saving measures that form part of their 20x20 Sustainability Plan. This includes eradicating underground leaks, saving individual stores hundreds of thousands of pounds each year. Technology innovations such as pre-rinse spray taps and low-flush toilets in all their stores and investment into rainwater harvesting as standard as well as retrofitting these units in existing retail outlets have all contributed.
Berendsen, the UK's largest textile rental and laundry organisation, has invested over £2m in new equipment and processes to tackle water scarcity. The business had the foresight to realise that major investment would lead to long term cost savings and benefits. Innovations include reverse osmosis systems, which ensure boilers are supplied with very clean water to reduce inefficiencies and leakage. The company also focused on using less water per wash cycle and on recycling and reusing water, with up to 75% of water now reclaimed and reused. It has succeeded in reducing water use by over one billion litres per annum since 2007.
These examples show that, while it's true that international policies, legislation and behavioural changes are vital to tackling the issue globally, businesses have a role. Measuring, managing and reducing water use and encouraging better water management across their business and suppliers can have a positive impact.
Today as the world turns the spotlight on water shortages, the important thing for businesses to realise is that water resources are finite. No resource is more fundamental than water to the health and security of people and the environment. Failure to act is exposing businesses to water scarcity issues further down the line, which in some cases could lead to dramatically increased costs, or could even grind operations to a standstill.