The business case for aggressive water management is building. Increasing interest in water management is a function of the powerful combination of cost savings through risk mitigation, good ROI, and the advantage of being first to market in this critical space. Businesses that tackle water conservation and replenishment will be working to provide critical solutions to a serious problem. They will also be well-positioned to take a leadership role in the industry.
The costs associated with inaction and the drivers supporting action make water stewardship an imperative for businesses. Water related issues represent a $63 trillion risk. The actual costs are increasing each year. According to CDP water-related impacts cost companies $14 billion in 2015, or more than five times more than they did the previous
year ($2.6 billion).
The World Economic Forum says that water crises present one of the top global risks over the next decade. A 2016 World Bank report finds that most countries can neutralize the adverse impacts of water scarcity by taking action to allocate and use water resources more efficiently.
The average cost of water is already on the rise, having increased 48 percent since 2010. Companies that invest in water treatment and reuse technologies stand to reap tremendous benefits. Triple Pundit cites reports that anticipate 22 percent annual growth in recycled water production and use across all market sectors. As reported by Environmental Leader, Bluefield Research forecasts US water reuse capacity to increase 58 percent in the next 10 years. The report said CAPEX investment in reuse is expected to total $11 billion between 2016 and 2026.
The potential associated with water investments are catching the attention of global investors. Chinese investors seem to appreciate the scale of this opportunity and they are enjoying significant returns. At the end of last summer, the China Water Index was among the best performing sub-indices for the month with a 10.3 percent gain. Water.org estimates that every $1 invested in water and sanitation provides a $4 economic return. Going forward we can expect the demand for advanced water treatment technologies will grow exponentially.
These solutions commonly involve recycling wastewater using technologies like micro filtration, UV disinfection, biological treatments, capacitive deionization and forward and reverse osmosis. These approaches are being used by governments and corporations. Cities in Texas treat wastewater to produce drinking water. California is about to expand its use of recycled water from purely non-potable purposes such as agriculture and irrigation to include drinking water.
Some world leading corporations are already using tools to assess their water risks and are crafting targeted solutions. Here are seven examples of leading water management in the private sector:
Drought has made California a testing ground for radical water efficiency strategies. California’s wine and beer industries have been especially creative. Vineyards across the state have stepped up to meet the challenges associated with water scarcity. One winery that stands out is Jackson Family Wines and there are many other sustainable wines in the marketplace.
Environmental Leader recently reported that General Electric (GE) is helping to turn rainwater into wine. The project is a collaborative partnership between GE Water & Process Technologies, wine industry services provider Winesecrets and the University of California Davis. The project is an amalgamation of existing technologies and advanced digital capabilities. They rely on a reverse osmosis system and a total organic carbon analyzer.
Given the quantities consumed and the consequent demand on water resources, it is appropriate that the beer industry is emerging as a sustainability leader. The brewing industry has taken great strides to minimize their rapacious appetite for water. Pilot projects are underway that transform gray water into both beer and renewable energy.
MillerCoors is working to reduce the amount of water they use to meet their ambitious 2020 goals. They have already reduced their water usage by 128.8 million gallons as assessed year over year. Anheuser-Busch has achieved the goal of lowering its water usage. In 2014 they committed to seven global environmental goals including three that involve water. By the end of 2017 the company aims to Reduce water risks and improved water management in 100 percent of its key barley growing regions in partnership with local stakeholders. They also engage in watershed protection measures in their facilities. SABMiller has been recognized as a leader in water management and
conservation and they also work with their vendors to reduce water
pollution and minimize runoff. Some other sustainability leaders in the beer industry are Asahi (perhaps the world’s most sustainable brewery) and Heineken.
Conserving water is a bottom line issue. As reported by Environmental Leader, PepsiCo saved $80 million by cutting water use by 26 percent between 2011 and 2015. PepsiCo’s Frito-Lay snacks near net zero footprint facility in Casa Grande, Arizona, treats and recycles about 648,000 gallons per day of process water. This LEED EB Gold-certified facility from the US Green Building Council. They recycle up to 75 percent of process water, enabling Frito-Lay to reduce its annual water use by 100 million gallons, and sends less than 1 percent of its waste to landfill.
PepsiCo has reduced its operational water use per unit of production by 26 percent, exceeding the company’s goal of 20 percent reduction by the end of 2015. Lux Research ranked PepsiCo and Kellogg as the food and beverage industry’s leaders in water efficiency. The PepsiCo Foundation has partnered with nonprofit organizations around the globe to help provide safe water to 9 million people since 2006, exceeding its original goal of 6 million by the end of 2015. The company also works with its suppliers to help them operate more efficiently with less water. PepsiCo also developed and deployed a direct seeding machine for rice farmers in India, helping growers there to save more than 10 billion liters of water since 2013.
“As a global food and beverage company, water is the lifeblood of our business and the many communities we serve,” PepsiCo’s Al Halvorsen, senior director environmental sustainability global operations, told Environmental Leader. “Conserving water across our global enterprise can have a huge impact on our communities and our planet. From a business perspective, these efforts help us lower our operating costs. By doing more with less, we are able to increase our agricultural yields, strengthen our water infrastructure and deliver cost savings.”
In 2016 Coca-Cola announced that they and their bottling partners have met their goal to replenish the equivalent amount of water used in their global sales volume back to nature and communities. They have also improved water use efficiency by 2.5 percent from 2014 to 2015.
Another Environmental Leader article reports that Coca-Cola returned about 191.9 billion liters of water to nature and communities in 2015 through community water projects in 71 countries. This represents about 115 percent of the water used beating its 100 percent water replenishment goal five years early. The company’s water usage inside factory walls has achieved a 27 percent improvement in water efficiency since 2004.
The company has set a 2020 goal to improve water efficiency in manufacturing operations by 25 percent, compared with a 2010 baseline. Coca-Cola now uses 1.98 liters of water to make 1 liter of product and is working to reduce it to 1.7 liters of water per liter of product by 2020. Coca-Cola has invested $300 million in water efficiency technologies and these investments will help the company and its bottlers avoided about $1 billion. To address global water issues Coca-Cola currently partners with about 400 governments, nonprofits and other private companies.
Chief sustainability officer Bea Perez, and Greg Koch, global head of water stewardship make the business case for Coke’s water replenishment projects saying:
“If you think about what we sell as a finished product, our no. 1 ingredient is water,” Perez said. “It’s very important for us to be as efficient as possible with water and we also have to ensure we’re protecting the water source — quantity, quality and infrastructure — for the local communities in which we operate. That’s what allows us to be welcomed by the community and operate as a thriving business.”
Coca-Cola CEO Muhtar Kent made a bold prediction when he wrote, “I predict that if you aren’t responsibly managing water in your business, you won’t be in business 20 years from now”.
Ford is a serious player in the corporate water conservation
space they understand both the business case and consumer appetites.
They get results through their extensive use of comprehensive risk
assessment tools. Ford’s global water strategy is on track to reduce water
usage per vehicle by 72 percent as of 2020. The company saved 10 billion
gallons of water from 2000 to 2015, a decrease of 61 percent
To commemorate World Water Day on March 22, Ford announced significant water savings at one of their facilities. As reported by Environmental Leader water saving technologies at Ford’s Chicago Assembly Plant have reduced the company’s water usage by 13 Million gallons in 2016 and even greater savings are expected in 2017.
Ford supply chain efforts are on track to save an additional 550 million gallons of water over the next five years. Ford’s new manufacturing water strategy calls for a 30 percent reduction in water use per vehicle from 2015 to 2020. The company has a long-term goal of zero drinkable water use in manufacturing. These efforts have earned Ford an “A” grade for water management from the CDP.
Ford sees water management as a top trend in 2017. A recent report from Ford offers a window into the rationale driving their pursuit of water stewardship. As explained by an Environmental Leader article, Ford’s annual trends report 2017 draws on insights — from technological, economic, environmental and political arenas — to “create meaningful vehicles and services.” This guidance document helps them to provide products and product features that appeal to consumers. One of the trends that stands out is that customers want and are prepared to pay for a product that has a respectable water footprint. This is something Ford calls sustainability blue.
Sheryl Connelly, Ford global trend and futuring manager said There were three trends that stood out in the report and water, and a company’s overall environmental footprint, was one of these trends. She goes on to suggest that manufacturers across industries can follow Ford’s lead in water management and achieve water and cost savings, as well as other business benefits.
Levi has become a champion of water stewardship and they have been working on conservation for several years. Levis WaterLess jeans use a technique that reduces water use in the finishing process by up to 96 percent. Nike has developed a waterless dyeing process for fabrics.
No discussion on water stewardship would be complete without mentioning Nestlé. In addition to their in-house efforts, they have recently invested $7 million as part of an innovative plan to transform a California milk factory into a zero water factory.
Finding solutions to the growing problem of water scarcity demands the involvement of industry. However, there are many in the corporate sector who have yet to see the wisdom of assuming their share of the water stewardship burden.