The Business of Water

Water Cooperation: Progress through Partnership

World Water Week has concluded in Stockholm and this year’s theme was water cooperation, following on the United Nation’s call for 2013 as the International Year for Water Cooperation.

For PepsiCo this was a perfect opportunity to highlight its comprehensive approach to water stewardship, including the key partnerships that help the PepsiCo Foundation provide access to safe water as well as the company’s operational successes to increase water use efficiency.

Effective water stewardship is achieved through a variety of means but the goal is always the same: to use water responsibly. Transforming aspiration into reality demands engagement at every level. No single entity, program or organization has the resources or capacity to tackle this challenge single-handed. Collaborative innovation is the vehicle by which the goal of global sustainable water management and access to safe water will be met. In short, progress comes through partnership.

Community partners, internal practices

The ongoing process of collaborative innovation that leverages the strengths of the PepsiCo Foundation’s key water partners -- including the Safe Water Network, Water.org, Inter-American Development Bank, China Women's Development Foundation and the Water Center at Columbia University’s Earth Institute -- enabled PepsiCo to meet its goal of providing access to safe water for three million people in the developing world by 2015, three years ahead of schedule.

Water savings within the company’s own operations were driven by tools like ReCon Water, an in-house system for prioritizing water saving opportunities. ReCon Water was fundamental to the company reaching its goal of improving water efficiency in its global operations by 20 percent in 2011, four years ahead of schedule.

Performance with Purpose

PepsiCo is guided by Performance with Purpose, the company’s goal to deliver great performance while doing the right things for people and communities around the world. Dan Bena, PepsiCo’s Senior Director for Sustainable Development, considers PepsiCo’s water stewardship efforts a great proof point for Performance with Purpose. He refers to the company’s efforts as “enlightened self-interest” and says that being a good corporate citizen -and taking a partnership approach to address industry issues - is simply good for business.

Bena is a respected voice at World Water Week; his enthusiasm for the work he does with PepsiCo's water partners is infectious.

“It’s engaging the community,” explained Bena at a Tuesday morning workshop with key partner Water.org, “it’s using resources innovatively and wisely, and it’s making the community part of the process.”

It’s a philosophy that serves the company and the community well and is one example among many in Stockholm that helps demonstrate how true progress comes only through partnership, understanding and cooperation.

Celebrating success, getting back to work

It’s both inspiring and humbling to sit and listen to the give and take of conversation and discussions echoing through the halls at Stockholmsmässan, the venue for World Water Week. This is where new ideas are considered, new partnerships forged and commitments reaffirmed for making water stewardship and the basic human right of access to clean water and sanitation a reality.

Attendees might take a moment to pat themselves on the back, but not too long. There’s too much work left to do.

Have you pledged to provide safe WASH to ALL employees at the workplace?

From left to right: Joppe Cramwinckel, Director WBCSD Water Program, Virginia Roaf, Advisor to the UN Special Rapporteur on the right to water and sanitation, Carlo Galli, Technical and Strategic Advisor Water Resources, Nestlé, Dorothea Wiplinger, Sustainability Manager, Borealis AG, Alfred Stern, Executive VP Polyolefins, Borealis AG, during the launch event.

The pledge for access to safe water, sanitation and hygiene is now launched. By signing it companies commit to providing appropriate access to safe WASH for all employees under direct company control within three years of signature. Borealis AG, EDF, Greif, Nestlé, Deloitte LLP, Unilever, Hindustran Construction Company and Roche Group have already committed. As presented today by Dorothea Wiplinger from Borealis and Carlo Galli from Nestlé, there is a tangible business benefit, for e.g. in terms of employees' health and satisfaction, and there is space for improvement even for companies who already present leading practices in this area, especially in terms of hygiene education. The guiding principles developed together with the pledge provide information about good practice in terms of water, sanitation and hygiene, and drawing companies' attention to issues like special needs for women, disabled or elderly people, cultural sensitivies and others. As emphasized by Virginia Roaf, advisor to the UN special rapporteur on the human right to water and sanitation, business has a responsibility to respect human rights, even in locations where appropriate government regulation is not in place, acknowledging however that States are of course human right's duty bearers in the first place.

Appropriate access to WASH in companies' direct operations is a necessary first step. If the 180+ WBCSD member companies were to implement the pledge, over 15 million employees would have access to safe WASH at the workplace. However, this is only the start of the business contribution on the journey to increasing sustainable access for the billions of people who go without. Businesses are indeed encouraged to go beyond their fence line and engage with supply chains and surrounding communities to scale up impact. 

Listen to Carlo Galli from Nestlé explaining why in his perspective committing and implementing this pledge is an important step for the business community at large:

How can watershed collaboration and water valuation help better manage the resource?

Very exciting discussions at the Sharing water: Engaging business seminar we co-organized yesterday with Wetlands International and the OECD! There was a real consensus that business needs to be involved in discussions at the watershed level. Looking at water risks beyond the company’s fenceline makes total business sense: companies can’t have a narrow view about their responsibility and wait for the system to collapse before taking action.

Forward-thinking companies have already shifted their practices from “do less harm” to “do more good”. However, one of the big hurdles of watershed collaboration is obviously data availability: how much water is there and of which quality? How many users are withdrawing water? What are the seasonal variations of water in the aquifer, etc. ?

Watershed approaches should also include the question of water allocation. In water-stressed watersheds, water should be allocated in a way that allows for the values for society, the economy and the environment to be maximized. But in real life, this is not easy to do! Market mechanisms also tend to be considered as “easy-wins” solutions, but they require a complex set of policy mechanisms and institutions to work properly. Markets are not the answer to every issue…

The seminar was also the opportunity for us to release the Business Guide to Water Valuation, which was very well received in Stockholm.The different business case studies presented during the seminar demonstrated that valuation is indeed a useful tool that can support business decision-making. The nature of the questions raised by the audience during the panel discussion also showed that the level of discussion has incredibly progressed since last year. At the water valuation side-event we organized at the 2012 WWW, we were under the impression that delegates were discovering water valuation – whereas yesterday, discussions were at a more technical level. It was also encouraging to see quite a number of business participants in the audience who were already considering using valuation. The key challenge in the coming years though, will be about whether we can come up with a common methodology that all companies can use and that allows the results of valuation studies to be comparable.

Listen to Mathieu Tolian from Veolia Water speak about the business guide for water valuation:

Mainstreaming resilience is urgent: comprehensive approach is needed beyond process

A workshop took place yesterday on climate change adaptation and mitigation strategies. It focused on the necessary coherence between these concepts and the mainstreaming of resilience through improved cooperation between water, agriculture and energy management.

Claude Nahon, EDF VP for Sustainable Development, set the stage on the adaptation to climate change theme from a private sector perspective and more specifically from an energy company point of view. In power companies, water is the link between mitigation and adaptation strategies.

Listen to Philippe Joubert, WBCSD's Managing Director for Energy and Climate, on the urgency of adaptation and mitigation, two sides of the same coin:

The awareness of business risks associated with scarcity issues - climate impacts core activities! - increased within the company with the European heat wave in 2003 which brought the company in the heart of the water and energy nexus, with an understanding of potential risks and of the necessity to anticipate. EDF understood that the transformation of climate would affect the way of conducting its activities, as for instance water availability concerns not only hydro-generation but is also key for running thermal power plants, and storms can impact networks. Action plans on extreme events (not only heat waves) were developed, and the water topic is now fully integrated within the company’s business lines. A carbon strategy has been developed in parallel to reduce the company’s footprint and promote the reduction of carbon intensity for its customers’ and partners.

Claude underlined (spontaneously!) that the collaborative work within WBCSD was the starting point of her awareness on the importance to develop a joint water and energy approach. Adaptation of the fleet and measures (as R&D modelling of rivers) is now part of EDF’s everyday business, with 400 million euros spent so far on various measures.

Listen to Claude requesting more business participation in the debate:

When and how to invest in transformation are key questions in this capital intensive industry, with infrastructure that is here for a long period of time and a difficulty to predict how climate change is going to play out. As Claude pointed out, mindsets have to change: facilities were built to resist to anything, but now the question is how to build in a resilient way, as we don’t know what will happen. We must shift from the oak to the wind. And we cannot do it on our own – understanding and resilience must be built in collaboration with the local and scientific communities, the authorities, other sectors of activity. Collaboration must be embedded in water management.

Ambassador Robert Van Lierop, Special Envoy for the Republic of Suriname, gave in a keynote speech in which he underlined the need to provide access to water, safe sanitation and hygiene regardless of income, gender, country of residence, perceived social status… He mentioned among others that water is life but can also be a threat to life, and that those who think their wealth will protect them live a fantasy as one catastrophic event could propel us all in a big unknown. “We either face the future together or none of us will have a future at all.”

Other speakers discussed the way forward on the implementation of coherent solutions and underlined the need to think about these concepts in concrete terms, not in opposition to one another. Risks and economic consequences are indeed very real. Dr Diego Rodriguez from the World Bank pointed out that the business case is clear and should be demonstrated in the languages of the different sectors of activity. The cooperation of all stakeholders is vital, and communities have to learn to become resilient in order to be able to face the unknown. The topic must definitely be looked at with a sense of urgency, a comprehensive approach, and not only as a process.

Water value versus price: what will it take to realize water's worth?

Netafim, an Israeli company that pioneered drip-irrigation, received the Stockholm Industry Water Award earlier today. Going to a company that aims to improve water productivity in agriculture, the award further emphasizes the key role of this sector to achieve water security - 70% of our freshwater resources are in fact used for irrigation!

Consequently, the Founders Business Seminar that followed the award ceremony focused on agricultural water-related issues. The theme of this years’ seminar was “the paradoxes of water value versus price” and included a heated debate about how water pricing can support behavior changes. In fact, the price elasticity of demand is highly variable depending on the country, the sector of activity etc. so the price of water shouldn’t be considered as the unique way to influence water consumption levels. Water pricing is also a very political issue, and new pricing policies are, in real life, very difficult to implement. Not to mention that water is a human right and that, as a consequence, pricing policies should allow fair and equitable access to enough water in quantity and quality to satisfy all people’s basic needs.

There are however many ways governments can incentivize reductions in water use. The removal of harmful subsidies - the ones that incentivize water wastage or water-intensive activities in water-scarce regions (e.g. rice crops in Australia) - is one of them.

Many of the examples given during the session came from Australia. The millennium drought that impacted the country during the past 10 years has strongly affected the way water is managed there, and in particular the perception of the value of water by civil society and business, which has legitimized the steep increase of water prices. It is unfortunate to think that the recurrence of such extreme water-related events may be the only way to make governments and people realize how much water is worth to society and to the environment…

The video of the full event can be accessed from the World Water Week website.

The debate on the value of water will continue tomorrow, through the Sharing water: Engaging business seminar that the WBCSD is co-organizing with the OECD and Wetlands International.

Action for wetlands urgently needed demonstrates TEEB for Water and Wetlands report

During the session TEEB for Water and Wetlands it was interesting to learn that the forest community was able to successfully make the case for forest conservation, and that the common perception – and this includes the conservation community – is that tropical forests are the most valuable ecosystems on earth. Actually the TEEB for Water and Wetlands report demonstrates that wetlands provide many more services. However, this is overlooked globally, and estimates suggest that since 1900 the world has lost around 50% of its wetlands with 60% loss in Europe!

It is urgent to act. We need to leverage the findings of the TEEB report, but also need to collect enough data to make the case to non-expert audiences, e.g. site operation managers, farmers. The response should also come from the policy makers, who have the responsibility to stop subsidizing human activities that destroy wetlands. It is also urgent to restore wetlands, and business has a role to play there, as it benefits from the services that these precious ecosystems provide.

TEEB for Water and Wetlands is an extremely valuable report that provides evidence for policy makers, business and the conservation community of the value that wetlands provide, helps understand the connectivity of wetlands with other ecosystems, explains the benefits of better valuing wetlands to better manage them, highlights what the policy responses should be, and support dialogue towards the identification of new solutions.

 

 

Peter Bakker challenges the World Water Week to elevate water to a strategic debate

The theme of this year's World Water Week is cooperation. Speaking at the High-Level panel of the week's opening ceremony, Peter Bakker put forward a challenge for the attendees: before we can cooperate we need a language we all understand when we talk about water. This language requires several elements:

1) definition of the risks associated with water, be they social (access to water and sanitation, health etc.), environmental (weather events, floods, droughts) or other
2) agreement on a framework to value water throughout the economic process and to create incentives to avoid water waste and achieve efficient use of water
3) agreement on a much needed governance framework to allow for fair water allocation decisions

Water stress is local but we need to turn water into a strategic debate to agree on a governance framework to make decisions, manage risks, value water and allocate it accordingly in order to solve water related challenges he said. 

Listen to Peter Bakker's message:

 

Doing more with less: business enterprises as change agents

During the session “ doing more with less – what can we learn from managing drought” Dr Dilip Kulkarni from Jain Irrigation said that technologies must be compatible with smallholder farmers' needs in the Indian context. Combined application of fertigation and micro-irrigation for e.g. lead to an increase of nutrition efficiency. In a country with 17% of the world's population, 2,4% of the land and 4% of water resources the goal is: less water used, less agricultural resources (e.g. less land with vertical cultivation), and more productivity. To achieve that business enterprises must be change agents, at an ever growing scale.

Cooperation it is..on resource recovery and reuse

The World Water Week started for WBCSD with a snappy discussion on the key role of strategic partnerships for resource recovery and reuse. To operationalize the latter on the scale we need today sustainable business models and enabling environments need to be put in place. Johannes Heeb from Cewas outlined a new partnership concept: it's not anymore about business development but about bisNET development, as a multitude of businesses need to get involved throughout the resource recovery and reuse value chain.

The WBCSD is currently developing a business to business and public private partnership model to scale up existing solutions for low income urban environments. And we started the process from the end, by looking at scale first, then work on business development and land on the necessary implementation mechanisms in different local contexts.

The possibility of tension between different players in the cooperation game has been raised with a conclusion that partners with competitive advantage must be able to build on each other's strengths to reach a competitive advantage at the global scale...together. Tension can also be positive in the process, as it spurs creativity and innovative thinking.

Listen to Miriam Otoo, from the International Water Management Institute who was convening the session, speak about the key role of strategic partnerships in resource recovery and reuse:

 

 

 

 

The World Water Week has ended. Now it’s time to get our hands and feet dirty.

The closing plenary of the World Water Week earlier today got us extremely energized – which is no easy task on the last day of a very intense and busy week. Peter Bakker, President of the WBCSD, underlined that water is the language the planet uses to talk to us. Any crisis you look at, be it the melting of the arctic ice, floods, droughts, increasing food prices, everything is related to water. Speaking to an audience of practitioners, academics, businesses, young people and many others, he made a very strong call to action: to address this crisis we need to scale up solutions. Business is ready and business has examples. But for powerful scaling up we need to collaborate. Next year’s water theme is collaboration. WBCSD will be a committed partner in the effort to bring business solutions to the game. Listen to him in the following video: