CDP’s Cate Lamb tells Terry Slavin she hopes her new role championing water at next year’s COP26 in Glasgow will lead to joined-up thinking on water’s role in the race to net-zero
When Covid-19 plunged boardrooms into crisis early this year, CDP directors held an emergency meeting to discuss whether they would send out their annual questionnaires on climate, water and deforestation risk as usual, or give business leaders a year off to concentrate on responding to the immediate threat on their doorsteps.
“We decided the environmental risks facing the planet are so great, we couldn’t afford to take our foot off the pedal,” says Cate Lamb, who is global director for water security at CDP. “Climate change is continuing, deforestation is rising, and biodiversity in freshwater ecosystems is on the verge of catastrophic collapse. Investors backing our information requests [to companies] also wanted us to continue.”
It turned out to have been the right decision. Rather than the number of respondents falling, as had been feared, the number of companies reporting on water through the programme rose again this year, with 2,934 businesses disclosing, up from 2,433 in 2019, and from 150 when CDP first started asking companies about water risk 11 years ago.
Lamb is pleased by the increase in reporting, but says the acid test is whether companies are taking commensurate action to reduce their risk. And, with an almost 50% increase between 2015 and 2018 in the number of companies reporting higher water withdrawals, the gap between reporting and action is not only large – it is growing.
Asking companies to report is a mechanism by which we drive change
CDP hasn’t yet analysed all the data from this year’s responses, but fewer than half of respondents to the 2019 survey said they regularly meter and monitor the quality of their discharges into the environment, while just 12% have set a water pollution reduction goal or target.
“Asking companies to report is a mechanism by which we drive change,” Lamb says. “We want to see companies begin to set ambitious targets and eliminate pollution from their value chains. At best, we want to see them halt freshwater withdrawals at today’s limit or design out the need for freshwater withdrawals to make it available to those who need it more.”
In August, Lamb was appointed to the High Level Climate Champions group at COP26 in Glasgow as lead on water issues. She hopes that, together with Climate Champions Nigel Topping of the UK and Chile’s Gonzalo Muñoz , they will be able to raise water’s profile so it is seen not just as a sector threatened by climate change, but as one with untapped potential to provide mitigation solutions.
She references a recent report by the German government’s development agency GIZ that highlighted how freshwater peatlands cover only 3% of global land surface but store twice as much carbon as all of the planet’s forests combined. They are also being lost at three times the rate of forests, leading to the release of methane and nitrous oxides greenhouse gases with a far stronger global warming potential than CO2, GIZ warns.
The report also shines a light on rice, the main staple for 3.5 billion people, as an overlooked global warming villain, with methane and nitrous oxide emissions from flooded rice paddies alone responsible for at least 2.5% of global GHG emissions, as well as using up 40% of the world’s irrigation water. (See Why sustainable rice is an overlooked challenge for climate action)
"Changing the way we use, store and distribute and treat water could save as much as 10% of CO2 and other GHG emissions... Today, however, many of these solutions remain largely untapped.”
What’s the point in pushing green hydrogen if we don’t have the water available to fuel it?
Lamb said. “I’m here to change that and make sure that it gets the money it needs to contribute to our climate goals.”
In the run up to COP26, the Climate Champions will also be encouraging countries to include targets to cut water-related GHG emissions in their updated Nationally Determined Contributions over the next five years, as Chile has done in its revised plan, including a novel target of restoring 1 million hectares of natural ecosystems.
Lamb says she will also use her role at COP26 to highlight some of the implications for the planet’s dwindling water resource of some of the technologies being promoted in the race to net-zero.
She gives the example of green hydrogen, which the EU is investing heavily in as part of its Green New Deal package, and is seen as crucial to the
bloc achieving a targeted 55% cut in CO2 emissions by 2030.
“We want green hydrogen to succeed, but producing it is very water-intensive and so far, there has been very little dialogue on this nexus issue. Unless we force ourselves to take a broader view of the environmental implications, we will waste our time and worse still, design in solutions that are far from resilient. What’s the point in pushing green hydrogen if we don’t have the water available to fuel it in the first place?”
The trade-offs are even more stark when it comes to electric vehicles, and their impact on the booming market for lithium. Demand for this water-hungry mineral, mainly extracted from salt flats in the “lithium triangle” of Chile, Bolivia and Argentina, is projected to increase tenfold over the next decade, leaving the mainly indigenous communities who live there without the water they need to survive.
There will be synergies and trade-offs everywhere in the green transition. We must be aware of what they are
“We are absolutely correct in pushing for EV for zero-carbon transport, but this is coming at a cost. In the Atacama desert [in Chile] lithium mining is having detrimental impacts on groundwater depletion and the potential for pollution is really high.”
And lithium is far from the only water-dependent metal that will be critical to the success of the energy transition. The World Bank predicts that the production of minerals such as copper, graphite, lithium and cobalt could rise by nearly 500% by 2050 to meet increased demand for components in batteries, wind turbines and solar panels, exacerbating water risks for a sector that is already the most exposed in the world, in terms of groundwater withdrawals and pollution. (See Can mining ride out the perfect storm of water risk)
“There will be synergies and trade-offs everywhere [in the green transition]. We must be aware of what they are and have systems in place to manage them,” Lamb says.
One big challenge is the fact that water pricing doesn’t reflect its true cost. Water pricing of consumers is politically sensitive, as was seen by the uproar in Ireland a few years ago when the government tried to introduce water metering, she says. “But from a corporation perspective companies are often paying less for their water than households, and that is a situation that cannot be sustained in any future that we imagine.”
She says in some cases companies access groundwater by drilling their own boreholes and pumping water, paying only a small licence fee. Yet it’s coming from the same aquifer as the drinking water for the city up the road, which pays the bills to maintain it.
Asked whether companies should set an internal price on water, as many companies do with CO2 emissions to manage their energy use, Lamb says “absolutely”.
We have the momentum. We have a large number of companies and investors that recognise the need to change
Yet the last time CDP asked companies whether they had set an internal water price, in 2016, only 53 companies, or 7%, reported they had done so. Data for this year’s survey has not yet been analysed, but Lamb is hoping for some improvement.
She is encouraged that numerous companies have gone public with ambitious goals to curb their water footprints in the last few months, including Microsoft, (see Working to protect Earth’s most precious raw material), Cargill, (see Scorched earth strategies), Kering, (see It’s time for fashion to turn its attention from the catwalk to water pollution), Accenture, and Unilever.
She praises the latter for its leadership in targeting the 85% of its water footprint that is accounted for by consumer use with innovative products like its no-rinse hair conditioner The Good Stuff, and Day2, the world’s first dry laundry spray, and its target of making its product formulations biodegradable by 2030.
“Unilever are making really bold and transformational changes to their personal care product lines, including recognising they need to eliminate certain products. They are taking a true view on [their impact on] water, climate and the destruction of nature overall,” Lamb says.
Just like in the energy sphere, the Climate Champions are hoping to create an ambition loop for water at COP26, with companies and governments spurring each other to set ever higher levels of action.
And like in energy, the role of the global finance community at COP26 will be key. And that is not only in where they choose to move their assets. She points out how, in the wake of the 2015 and 2018 tailings dam disasters in Brazil, it was intervention from institutional investors representing $1.3tn in assets that led to the development of a global standard for the management of tailings dams in an effort to prevent future tragedies.
“[Financial institutions] are uniquely placed as international players that invest in whole sectors, and have a global influence that no other national government has. That’s why CDP looks to them to deliver the change we need on climate, on water, and on forest.”
She is encouraged that 26 financial institutions in September signed up to the Finance for Biodiversity Pledge, pledging to reverse nature loss in the coming decade. (See Banking on nature)
“We have the momentum. We have a large number of companies and investors telling us they have a problem, that they recognise the need to change,” Lamb says. “What I’m hoping to get from the Climate Champions role is an opportunity to convert that interest into genuine action.”
This article is part of our in-depth Water Risk briefing. See also:
Running dry: Competing for water on a thirsty planet
Finance firms come together in bid to overcome barriers to banking on biodiversity
Mining firms ‘failing to get to grips with worsening water security crisis’
Scorched earth strategies: how Cargill, Unilever and Diageo are cutting their water footprints
Working to protect Earth’s most precious raw material
From 500 litres of water a day to 50: P&G heads up a partnership to stave off next Day Zero
The Gulf companies innovating to reduce dependence on desalination
‘It’s time for fashion to turn its focus from the catwalk to cutting water pollution’
water risk Covid-19 cate lamb CDP Freshwater ecosystems SDG6 COP26 Climate Champions energy transition green hydrogen lithium Atacama Desert water pricing Unilever Finance for Biodiversity Pledge