Water is rising on the sustainability agenda, as its scarcity is blamed for recent conflicts and corporations begin to understand their responsibilities

The below piece originally appeared as subscriber-only content with the September 2015 issue of Ethical Corp magazine. It has now been made free to access for World Water Day. 

Water is becoming the new oil, a shrinking, contested, necessary resource associated with border disputes and armed conflicts. It determines livelihoods, business locations, food availability, children’s well-being and even whether girls can go to school.

More than 1 billion people currently live in areas where water is scarce and as many as 3.5 billion could be in the same situation by 2025, according to the World Resources Institute. That may seem surprising since water covers 70% of the Earth, but only 3% of that total is fresh water and more than half of the fresh water is in glaciers or other hard-to-reach locations.

“There’s not really any area of the world not affected,” says Karin Krchnak, director of the Freshwater Program for WWF. “You could name any region of the globe and the forecast is pretty grim.”

The 2015 World Economic Forum named “water supply crises” as one of the top five global risks. Overuse and mismanagement of water resources, pollution, climate change and population growth all are reasons for water scarcity, although some conditions affect certain areas more than others. Many of the water sources that support ecosystems have become stressed, according to WWF, and more than half of the world’s wetlands have vanished. In addition, the WWF notes, climate change is disrupting patterns of weather and water worldwide, leading to shortages and droughts in some areas and floods in others.

More than half of wetlands have gone

“One-third of the major aquifers worldwide are being rapidly depleted,” says Jay Famiglietti, professor of Earth System Science at UC Irvine and senior water scientist at Nasa's Jet Propulsion Laboratory. “Unfortunately, these are the same aquifers that provide groundwater to irrigate the world's major food producing regions. Our water and food security is at far greater risk than we realise.”

Globally, agriculture uses the greatest share of the fresh water supply, representing about 70% of water withdrawals. Industry uses 22% and 8% goes to domestic activities. Farming also is one of the largest sources of water pollution, due to runoff from fertilisers and animal waste.

Water resources in parts of South Africa, the Mediterranean countries, the US, South Asia and China are being drawn down due to agriculture, according to Ruth Mathews, executive director of the Water Footprint Network, which “provides science-based, practical solutions and strategic insights” to stakeholders to improve the way fresh water is used and shared. The large numbers of smallholder farmers in South Asia and elsewhere are cumulatively contributing to a large water footprint for agriculture. Industry also contributes to the world’s water footprint with some industries consuming a lot of water and others generating a high level of pollution.

Animal waste pollutes water

“The drivers for shortages include competition and more demand than supply; there is a pretty set supply of fresh water,” says Brooke Barton, senior director of the water programme at Ceres, a US-based non-profit that works with investors, companies and public interest groups to foster sustainable business practices. “There has been very poor regulation of water throughout the world,” Barton says. “There has been very little data about how much water is being used, a lack of information about pollution, the economic or industry factor and lack of access. Many people struggle on a daily basis to get access to fresh water. And climate change adds incredible uncertainty to the system.”

Even in a water-rich country like Brazil, drought and mismanagement are leading to water scarcity, Barton adds. Water shortages in the US, China and India tend to be in certain regions, Barton says. In China, often the major culprit is pollution, while in certain parts of the US, an already-dry climate exacerbated by shifts in population and expanded agriculture tax a limited water supply.

China's water pollution leads to shortages

Water and war

Tensions and conflicts over water supplies are only expected to increase. Scientists recently cited a climate-change-influenced drought as a major factor that contributed to the civil war in Syria that began in 2011. Global warming intensified a severe drought in the country that lasted from 2006 to 2010, according to a report co-authored by climate scientists at Lamont-Doherty Earth Observatory at Columbia University in the US. Citizens weary of the economic stress, lost jobs and food shortages called on the government to do more, leading to civil unrest. The administration of President Bashar Assad cracked down hard on the protesters, leading to many civilian deaths and people fleeing the country.

Adding to the problems, for years, the al-Assads, the country’s ruling family, encouraged the growing of export crops such as cotton, which are very water-intensive. Irrigation wells that were drilled illegally depleted groundwater that could have been used during the drought, the report says. With water scarce, agriculture production, usually about a quarter of Syria’s economy, dropped by a third.

Since 1900, the region’s temperature has increased by between 1C and 1.2C, which has been attributed to human greenhouse gas emissions, the report notes, leading to an average 10% drop in rainfall during the wet season. Syria also has experienced a jump in population, from 4 million in the 1950s to the current 22 million.

The war in Syria could be just the first of a series of conflicts spurred by water shortages throughout the region, the report’s authors warn. Prolonged droughts and competition for water could make simmering tensions boil over. Turkey, Lebanon, Israel, Jordan, Iraq and Afghanistan as well as East Africa and parts of Central America all are potential hot spots.

Expect more climate refugees

In other parts of the world, populations battle water shortages and water-borne illnesses. Out of the 783 million people worldwide who do not have access to clean and safe water, 37% live in Sub-Saharan Africa, according to the Water Project. That means a member of each family must spend hours each day trekking to and from a fresh water supply with a jug. About 64% of households rely on women to get the family's water when there is no water source in the home, and girls under 15 are twice as likely as boys to be assigned this job, often preventing them from attending school. The United Nations estimates that in Sub-Saharan Africa, 40bn hours a year are spent collecting water. And yet, for every $1 invested in water and sanitation, the economic return is between $3 and $34, notes the World Health Organisation.

NGOs are playing a role in helping neighbouring countries negotiate water rights, says WWF’s Krchnak. “They are working to bring stakeholders together to have those dialogues.” WWF has been working in Cameroon to bring water supplies and sanitation into communities, she says. WWF also is collaborating with companies in Mexico, Belize and Guatemala that provide financial and technical support to improve the drinking water supply and sanitation. “When we go into countries to do these projects, we look at how they are done in terms of affecting the watershed, the impact on climate change and how to sustain the projects,” Krchnak adds.

Lack of adequate sanitation systems and safe drinking water also have a major impact on the health of the populations in many developing countries, particularly children. As much as 80% of illnesses in developing countries are related to tainted water and poor sanitation, the Water Project says. People with water-related illnesses comprise about half of the patients in the world’s hospitals and a fifth of deaths of children under five worldwide is attributed to a water-related disease.

Besides limited water supplies and access problems, in some countries, mismanagement in the form of uneven distribution of water resources and lack of oversight exacerbates the situation, says Water Footprint Networks’ Mathews. “Even in the developed world, choices are made for economic development, but making those choices is based on a value system; the water usage is not taken into account,” she says. “In developing countries, a problem grows and grows until the government steps in to make a radical change, so then a company either makes the change or the business shuts down.”

On the positive side, water stewardship is starting to feature more prominently in many companies’ sustainability reports, after decades of being off the radar. “For a very long time, businesses assumed water was cheap and limitless. There was a disconnect between the price and value of water,” says Ceres’s Barton. “Without a major signal, they really were not thinking about supply.”

Corporate conservation

More companies are showing an interest in water conservation as they realise water issues can pose a business risk, says Mathews. “We see companies reaching down into the supply chain to reduce their water footprint.”

The growing number of businesses participating in water conferences recently is a sign they are acknowledging global water concerns, Krchnak points out. “Businesses are really understanding [water scarcity], whether it is involving current business or future business. Most food and beverage and textile companies are starting to see water as a risk to their own operations and reputations. Mining companies have had to shut down because of massive flooding. They are working with us to see how they can take on these water challenges.”

Krchnak adds: “I see companies taking a stronger interest to see how they can be part of the solution to the global water situation. It’s amazing to see more companies working together. Since water scarcity is a collective as well as a local issue, you can apply some of the lessons used in other parts of globe, but have to take into account conditions in other countries.”

One approach Ceres is taking to get companies’ attention is working with investors who encourage companies to do more to conserve water, provide data about their activities and indicate how corporate decisions affect water resources. “Investors stress that portfolios need to reflect that companies are being as efficient as possible,” Barton says. “There is a growing interest among investors in climate and the environment, to integrate modelling into decisions about purchases. Investors need to see companies provide more data, so we are seeing more recognition of water’s value.”

Writing’s on the wall

In August, more than 60 North American and European institutional investors collectively managing $2.6tn in assets sent joint letters to 15 food and drinks companies calling for increased water risk management and disclosure practices, according to Ceres, a non-profit sustainability organisation. The letters were coordinated by Ceres along with the Interfaith Center on Corporate Responsibility and the United Nations-supported Principles for Responsible Investment.

The letter recipients were selected based on their relatively low water management risk scores in a recent Ceres report, Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks. Out of the 31 publicly traded US companies evaluated by Ceres’ report, 90% named water as a material risk in their 10-K filings, but only 30% indicated that water risks were part of major business planning activities and investment decision-making.

InterContinental Hotels Group (IHG), a company operating in almost 100 countries, has appointed Water Footprint Networks to develop its water stewardship programme. While IHG has had a sustainability programme for many years, company officials decided it was time to address the water issue more directly. “We’ve spent a long time trying to identify the right partner,” says Paul Snyder, IHG vice-president for corporate responsibility – environmental sustainability. “What we’re trying to do is figure out where to go next.”

As one of its 2013-2017 Corporate Responsibility targets, IHG is aiming to reduce water use per occupied room by 12% in water-stressed areas. By the end of 2014, the company had achieved a 4.2% reduction. IHG has 4,942 hotels globally.

IHG is looking to Water Footprint Networks to help it develop a deeper understanding of water usage at the local levels at its hotels and then employ best practices to address issues. “We want to combine that with the global scale to find more opportunities across the portfolio to do more,” Snyder says. “We want to be leaders in the area of water stewardship.”

IHG saved $92m with Green Engage

The water stewardship programme will supplement IHG’s Green Engage system, which was rolled out in October 2014. Green Engage includes more than 200 actions designed to reduce hotels’ environmental impact and almost 30 of them pertain to water. Among the recommendations are the ability to track consumption on a monthly basis, as well as guidance on more specific water-saving solutions such as metering, rainwater harvesting, and the installation of devices such as low-flow taps and showerheads. In 2014 alone, managed hotels cut $92m in costs by participating in IHG Green Engage, according to IHG. To address the severe drought conditions in California, IHG delivered Water Conservation Kits to all of its 230 hotels in the state.

Water stressed areas only will continue to multiply. Parts of South America are likely to experience more water shortages, leading to social conflicts around water, according to Mathews. “Certainly in parts of South Asia as well and the Mediterranean area there will be continued problems.”


Refreshingly drier

A partnership between Coca-Cola and WWF to address the impacts and risks associated with Coca-Cola’s water use has led to the global drinks giant improving water efficiency consistently since 2004.
Coke set a goal of reducing water use by 20% in 2012, and reached 21%. The next target is 25% by 2020, according to Greg Koch, the company’s director of Global Water Stewardship. By meeting the 25% goal, Coke can cut $1bn in costs between 2010 and 2020, Koch says. “We set up a tracking system, so we’re measuring water use not just overall, but where it is used throughout the plant.”

Among the water-saving measures implemented at some of its 900 plants worldwide, besides fixing leaks and optimising processes, are steps to remove water from the process entirely, Koch says. For example, instead of spraying conveyor belts with a soapy water mixture to prevent the scuffing of bottles, some facilities use dry lubricant. Rather than cleaning the inside of bottles with water before they are filled, some places are using ionised air.

Thirsty work

Looking outside its plants, the majority of water Coke uses is embedded in agriculture, to grow fruit and sweeteners, Koch says. “We’ve set a goal of sustainably sourcing 100% of our ingredients by 2020.” This includes water, and sustainability means irrigation efficiency; ensuring the source of water is sustainable; monitoring, tracking and limiting runoff to make sure it is not picking up chemicals; and changing the way fertilisers are applied.

WWF has been a valuable partner in helping company executives understand more of the social and conservation science involved in water stewardship, according to Koch. “It is a true partnership: they do a lot of work with river conservation, so we go out in the fields together,” he says. “We also look at shared watersheds, and contiguous market places. We also are interested in the community and ecosystem we are involved with. WWF pushes us. They pushed us to set a goal around sustainable agriculture.”

Other locations where shortages will probably worsen include the Rio Grande-Rio Bravo areas on the US-Mexican border, because an already dry region is being affected by climate change, says Krchnak. And as glaciers melt in the Himalayas, and water systems change, competition for water no doubt will increase there. A shrinking supply of surface water in the Middle East also will take its toll.

To really have an impact on water scarcity, corporations, agencies and governments are being encouraged not just to monitor their own water usage, but to get more involved in joint efforts, especially in areas where resources are shared.

“The future is getting companies to work together in these river basins, and working with governments,” says Krchnak. “We need to look down the supply chain, making changes to mitigate the situation and work collectively with companies and governments. With water that crosses borders, you need to work together to share data. Individual actions will help contribute to solutions, but what is more important is how we can do it together.”

water  natural resources  resource scarcity  water conservation  water briefing  sugarcane  coca-cola 

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