What will it take for water to take its true place centre stage?
With World Water Day still in people's minds, I keep reflecting on its value to companies. If a friend asked you or me as individuals whether we need water or whether we care about too much carbon the answer would be clear, water is essential to life and what is carbon anyway! Why then is water relegated to last place behind carbon, energy, fuel and a multitude of other priorities in sustainability strategies?
I suspect the partial answer is that it’s historic. When companies start on their journeys to reduce their environmental impact they, quite sensibly, usually focus on areas with high costs attached to them. After all how better to engage a Board and staff than by aligning supporting the environment with saving cash and becoming more competitive! I’ve done it myself and I still recommend it as an effective emerging strategic approach. However it never seems to recover its rightful place as a priority as these strategies mature.
This must change. For companies producing or selling an agricultural product it’s obviously an essential component but even manufacturers of non-food products often use vast quantities of the stuff. Whether we want to prioritise it or not the matter is being taken out of our hands – ASDA in an industry leading report last year stating that 95% of their global produce supply chain is already at risk from climate change. And water was one of the key components to reaching this conclusion – too much or not enough and changing rainfall patterns.
By 2050 it’s expected that summer rivers will be 35% lower in England that today and the Environment Agency is already reducing allowable amounts in water extraction licences. This could lead to significantly higher costs for food as companies invest in water storage facilities. Taking the South East of England, the Institute of Civil Engineers has predicted that by 2035, just 20 years away, the population will have grown by 23% - they all need water to live.
But its certainly not all doom and gloom. The World Economic Forum, arguably one of the most powerful groupings of global CEOs, recently stated that water scarcity is in their Top 5 risks to profitability. More and more future looking companies, such as HEINEKEN through their Brewing a Better World strategy, are developing action plans to tackle water scarcity in their supply chains and others are following.
We all need to recognise going in to World Water Day that water is most certainly a strategic risk to profitability, its going to likely get harder to source and strategies need to at the very least start to map usage and reduce consumption. And yes the price will almost certainly rise in the not too distant future.