Media: Lufthansa Inflight Magazine 2019
Publication Date: October 2019
Interview with Tom Williams, Director, Water, World Business Council for Sustainable Development (WBCSD)
Water Scarcity: A Major Business Risk
New technologies and a circular approach to water management offer great opportunities to preserve the most vital resource, says Tom Williams of the World Business Council for Sustainable Development (WBCSD).
Essential in our daily lives and often perceived as a commodity, what is the current state of the world’s water resources?
Currently, major cities around the world face the prospect of a water crisis. The city of Cape Town, South Africa experienced a severe water shortage in early 2018 and became the first city in the world to face the possibility of running out of water. At the same time, billions of people living in rural areas struggle during dry seasons. But some geographical areas are affected more than others. Countries that are particularly prone to water shortages include China, Nigeria and India. That’s why the WBCSD Water programme is based out of Delhi, India which makes it the first global programme by the WBCSD that will be run outside of Geneva. The idea is to bring solutions to the places where the problems are felt the most.
Water quality is another dominant issue. Today, 2.1 billion people – about three in ten of the planet’s population – lack access to clean and safe water. In 2050, the number of people in the world is expected to top 10 billion, from just under 8 billion now, increasing the risk of a global water shortage. Global demand is expected to outstrip supply by up to 40% within 10 years.
What can be done to change this situation?
Everything we do requires water: 1kg of rice takes 2,500 litres of water; fattening a cow to produce the same weight of beef requires 15,000 litres. Globally, agriculture accounts for more than 70% of global freshwater withdrawals. Electric power generation is another large water consumer as power plants require large volumes of water. However, these links are often not recognised, and policies and governance on water, energy, food and agriculture or any other related sector are usually developed in isolation. But we are not going to solve the water crisis if we look at water as an isolated issue, you can't transform a food agricultural system without being water efficient — these issues are inextricably linked. Against a backdrop of current and future challenges, including the world’s increased desire for meat, manufactured goods and electricity, we need to find ways to change the whole systems in order to address these challenges and live more sustainably.
What are the main challenges companies are facing?
The issue of water has traditionally never been high on the agenda of most businesses, but fortunately, in recent years it has become a material issue for many companies. Clearly, the private sector’s motivation for engagement on water sustainability issues goes far beyond corporate social responsibility, it’s a core business issue. Many people might not realise it, but the truth is, whether you are working in the manufacturing industry or e-commerce, water most likely affects your business in one way or another.
There is an ongoing discussion on the value of water that has been there for decades. The main problem is that the price of water is well below its real value. Most food and beverage companies buy water from municipalities but their water bill doesn’t really reflect the true value of water considering its environmental and social benefits. That’s why a number of organisations, NGOs and governments have been discussing the need to increase the market price. Encouragingly, we have seen some positive examples of corporate action. For instance, Nestle has set an internal price on water to cover costs and reflect its true value and scarcity.
You only need to look at your operations and supply chain to understand that water consumption presents physical risks to your company. In fact, we saw cases where businesses had to relocate from areas where water is scarce to areas where water risks are lower. Together with our global partners World Wildlife Fund (WWF) and the World Resources Institute (WRI), we have produced online, publicly available water risk tools to help companies operating in multiple countries to analyse and understand their risks in order to build long-term water management strategies.
What are the areas businesses need to look into to overcome these risks?
Companies need to build water stewardship into the heart of their business strategies. The starting point for any company is to measure, report and analyse water data in its operations, at all points along its supply chain. This is important because if you don’t know how much you are using or how much is available to use, it is impossible to have a comprehensive understanding of your sustainability impacts. But in many cases, companies have challenges in mapping their supply chains effectively and have a comprehensive strategy, especially when it comes to larger multinational corporations. Fortunately, we can see that an increasing number of companies are interested in exploring opportunities to change this situation. They are interested in collaborating with us so that together we can build a platform that would help them to map their supply chain.
Companies should also look into implementing circular water management processes. There are already some good examples out there. For example, in the car manufacturing industry water is a core component of the process to spray cars, whereby the water gets polluted. Companies have come up with innovative ways in which the paint can be extracted from the water and the constituents of that paint can be reused, but also the water can be reused because it has been effectively treated.
Are there any particular sectors that are ahead of the others?
Food and beverage companies have both a strong interest and experience in managing water effectively because their products require water. But it is only a small number of companies, including familiar names such as CocaCola and PepsiCo, that have really compelling water strategies. Some of the larger companies are also actively working with SMEs to help them to start out on the long journey to improve the sustainability of their water footprints.
The chemical industry is another sector that relies heavily on water, thus realises its importance. At WBCSD, we have developed the Chemical Sector SDG Roadmap, an initiative led by a some of the leading chemical companies and industry associations. The SDG Roadmap aims to help chemical companies to take advantage of the opportunities offered by the chemical sector as well as to contribute to the SDG agenda.
P&G is another great example. The company has launched a 50L Home initiative, in which it hopes to bring together companies and policy-makers, to show people how to limit daily water consumption to 50 litres in an effort to help solve the urban water crisis. As part of this initiative, P&G has launched a hair care collection which is designed to be used without water. It was actually inspired by Cape Town’s drought that I mentioned earlier.
What new methods and new technologies are being developed in terms of water management?
There is a number of different technologies and solutions. For example, the Microsoft founder Bill Gates and his Bill & Melinda Gates Foundation donated $200 million to universities around the world to develop safe non-sewered sanitation systems, in other words, a next-generation toilet. The technology funded by the foundation extracts clean water from human waste and turns it into clean water. Then there are companies that have come up with irrigation systems to help farmers to grow more with less water using drop irrigation. Another example is membrane technology that filters water to limit liquid waste at the end of industrial processes to Zero Liquid Discharge (ZLD). It means that there is no effluent discharge, all of the waste streams are either recycled or reused, and it absolutely minimises the pollution that is being put into water. So the methods and solutions exist. But the problem is that the enabling environment – policies, incentives, partners – are often not in place to support their deployment.
So what role should governments, regulators and policy-makers play?
Policy-makers need to undertake a root-and-branch review on the current policy regulations, with a focus on circular economy. In reality, many policies were developed years ago without even considering recycling products. For example, in Europe, we have the technology to extract certain chemical contents that can be reused in other products, but from a regulatory perspective, these materials are recognised as waste and can't be used. But in reality, treating and reusing wastewater not only provides an alternative source of water, but it can provide energy and other valuable resources such as fertilisers and bio-plastics. There are, of course, some positive examples like India, where in some states it’s becoming a regulatory requirement for companies to have ZLD technologies, but even there it’s nowhere near mainstream.
Are there any countries that are leading the development of these new technologies and innovation?
Yes, definitely. The Netherlands has a very good global reputation for water management in terms of planning processes but also on the technology side of things. It’s a small country, yet one of Europe’s largest producers of agricultural and food products, so water is fundamental to the Dutch economy. The use public-private partnerships (PPP) between government, businesses and some of the leading universities in the Netherlands has been leading the way for sustainable innovation.
How do you see the landscape evolving over the next 5 to 10 years?
The discussion on the water sustainability issues has been there for decades. To date, this discussion has been quite conceptual.But today, companies have a broader perspective of their water footprint and that’s a great first step. Water is becoming an increasingly important topic in the boardrooms as companies understand both risks and opportunities, which they can turn into value. One thing that is still lacking is greater cooperation. There are so many professionals engaged in the water sector, but the problem is, they don’t engage enough with each other. I think it would be a great opportunity for the water community to collaborate more with each other, but also with other sectors. This year, together with our member companies, we are planning to facilitate this more, and I’m quite hopeful because I do see signals that change is starting.