Water Rises up on the Boardroom Agenda

“Any Other Business”

Energy has long been high on the boardroom agenda for organizations looking to control their budget and comply with changing industry legislation.  In contrast, water is often viewed under the item “any other business”. With regulated markets and comparatively low costs, many businesses believe that there are limited opportunities or risks associated with what is, in fact, the most essential and precious of all of earth’s resources.
Although routinely undervalued and taken for granted, the converging megatrends of population growth, climate change, and urbanization are leading to changing perceptions about water risk. Such changes are even occurring outside of the developing nations, for whom water scarcity has always posed a very real risk to their communities.

Changing Perceptions:

The United Nations (UN) has warned of the threat of water scarcity, caused by not only natural events but also uneven distribution, waste, pollution and poor management. The UN predicts a 40% shortfall of available water supplies by 2030 and between 24 million and 700 million people being displaced. The urgency for business is the risk to the sustainable supply of water to their operations, how can organizations be sure they have access to water for their offices, factories etc – especially those organizations with an international footprint.

The World Bank global GDP growth rates will fall 6 percent by the middle of the century as a result of increased competition for water. And this would result in costs of $2.5 billion for companies at the mercy of increased water scarcity. (Raconteur)

Even in the north-west of England where the climate is described as “cool summers, mild winters, heavy rain all year” has only avoided a hosepipe ban at the eleventh hour following a recent deluge replenishing depleted stocks caused by one of the driest summers on record in the UK. This follows growing concerns over the condition of the industry, with 3bn litres of treated water each day being lost through leakage before reaching the customer. This, leading to calls for huge investment in infrastructure to safeguard water supplies even to a region long considered as one of the wettest in the UK. This set of challenges is mirrored across many geographies, particularly due to the increased focus and record high temperatures in 2018.

Opportunity for Organizations:

Whilst governments, NGOs and water companies are tasked with finding long-term sustainable solutions to ensure a regular supply of water is delivered to a growing world population, companies can drive change much more quickly. In 2017, CDP recorded 2025 companies worth approximately US$20 trillion in market capitalization reporting their water data.  This oversight of water information is allowing companies such as Nestle and Diageo to introduce water management strategies designed to not only help the environment but also protect them against higher operating costs, supply chain distribution, water supply disruption, constraint to growth and brand damage.
The immediate opportunity can be realised with 5 pragmatic recommendations:

• Measure

Before setting overly-ambitious reduction targets first understand how much water you use and what metrics are in place to monitor your consumption.  This information will act as a baseline against which any improvements can be measured. Many organizations that started acting in 2015 are seeing results already, in some cases up to 12% savings. 

• Risk Assessment

Identify how water is supplied to your premises and determine both the probability and impact of supply disruptions to your business.  Understanding your water dependency will leave you better equipped to prepare, prevent and respond to challenges.

• Benchmark

Validate site consumption levels against any available metrics; whether industry averages, businesses specific or simply comparable premises across your estate.  Ranking performance and identifying exceptions will allow you to focus your efforts on those areas most in need of urgent attention.  In the long-term, your entire water using portfolio warrants management, however, short-term wins provide stimulus, and in some cases, release necessary revenue, to continue or even broaden your programme of works. Benchmark standards exist in many geographies, for example, Real Estate Environmental Benchmark (REEB) in the UK, or GRESB itself globally.

• Assess

Data is only powerful if you do something with it. Knowing how much water you use needs to be understood within the context of how, where and why you use it.  There is no short-cut to this, and for assurance that water is being used wisely, fittings should be inspected, processes tested, staff behaviour evaluated and best practice implemented across your portfolio.  This stage is key to setting realistic reduction targets and identifying improvements that will deliver meaningful results – with success being driven by your knowledge of site infrastructure and water activity.

• Implement & repeat

Once the risks and opportunities are identified for your business, create a clear programme of works with stakeholders to ensure that all proposed initiatives are understood, agreed and given clear ownership.  The benefits of each action should be measurable and, once implemented, communicated to relevant parties to provide feedback, generate further buy-in and, where not wholly successful, aid lessons learned.
Having driven efficiency savings, the next step is the ongoing management of your estate through continued monitoring and maintenance.  Business priorities, technologies, behaviours and legislation continually change, so make sure that your water management strategy evolves with these changes to keep one step ahead.

To read more on water and other energy and sustainability topic, visit the Perspectives Hub
 
This article is written by Eddie Spencer, Head of Water, Schneider Electric