Addressing water risks in the business strategy
According to the new global risk report issued by the World economic forum, water-related risks are amongst the five key risks for the fifth year in a row now. According to United Nations’ estimates, by 2030 almost half of the global population will be living in regions with high water stress.
Time for business leaders to address these risks with the implementation of a sound water risk strategy as part of the ESG (Environmental and Social Governance) in their operation.
The elaboration of a corporate water strategy for the upstream and downstream operation of an Oil and Gas company would be one good example. With the support of Denkstatt, Austria, a clear water ambition statement was issued, telling all stakeholders the O&G company´s understanding of water being a valuable resource and one of the key factors for a local license to operate. Additionally, the water strategy covers clear goals on water use and water efficiency improvements, water discharge quality goals and measures to mitigate local water risk for all sites. This approach can be implemented for investment or real estate portfolios. Knowing how water risks trigger the necessity for innovative water saving or treatment technologies is key to manage water risks within a portfolio appropriately.
Identification of local water risks and mitigation plan
A big, global soft drink bottler was kicked out of a country at the beginning of the Millennials because he was claimed to have caused groundwater depletion due to excessive pumping for the soft drink production. This was the start of an investigation and assessment program for sustainable use of water and technical integrity of infrastructure for all bottling plants worldwide. HPC Germany has conducted more than 100 of such assessments and has developed the tools for a successful and sustainable improvement of the sites regarding water management. The tools consist of data and information gathering regarding available and used water quantities, water quality issues, wastewater treatment and discharge, river basin and groundwater management, legal compliance, stakeholder engagement and technical features for water supply, transport and storage. Training, transparency within the operations and capacity building are part of the assessments. The tools provide mitigation measures and cost estimates for identified issues of concern. The so-called Source Vulnerability Assessment in combination with water stewardship measures helped to make the company globally No 1 of the Dow Jones Sustainability Index for 4 consecutive years. The program goes on.
Taking the lead: be a water steward!
One of the globally most sound approaches to sustainable water governance is the Alliance for Water Stewardship (AWS). AWS is a global organization made up of members from leading businesses, non-profits, public sector agencies and academic institutions with the collective goal of promoting responsible use of freshwater that is socially, economically and environmentally beneficial to all. AWS has developed the certifiable AWS Standard, designed to help companies and other water users implement responsible practices that mitigate water risks, improve efficiency, and address shared water challenges.
Achieving AWS certification is a rigorous process that includes a series of actions, criteria, and indicators for how to manage water both at the factory level, as well as outside the boundaries of a site.
In 2017, Denkstatt together with HPC were asked for support for a certification of a cigarette producer site in Brazil against the Alliance for Water Stewardship (AWS) standard.
They prepared the site, which had no comprehensive water management at all at his stage, for the certification. In a record time of four months, the site gathered all required documents, contacted relevant stakeholders and excited them to contribute to this challenging project, implemented the necessary management measures and started to upgrade the infrastructure according to a gap analysis and action plan developed during the assessment by Denkstatt and HPC. Finally, the site achieved the certification. The benefits are manifold. Besides a responsible and sustainable use of the precious resource water, it can increase the value of a company or organization helping to drive the change in water stewardship in the region. By now, 5 other sites of the same client in Italy, Turkey, Portugal, Russia and Indonesia achieved AWS certification or are short before. AWS is applicable to all industries and administrations dealing with water.
This article is written by Dirk Münstermann, Senior Consultant at HPC AG and Joachim Kircher, Senior Manager at Denkstatt GmbH