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Last week I presented at World Water Week in Stockholm – the annual forum for sharing insights and case studies on water sustainability.
Reflection is a great filter and here are my five takeaways for business:
1. Get ready for uncomfortable trade-offs
So far business has largely responded to water stress issues by seeking improvements in operational efficiency to reduce both energy and water requirements. Efficient facilities are a source of best practice and provide credibility in engaging suppliers and stakeholders. As water scarcity bites deeper into value chains though it will inevitably require energy to address it: whether it’s pumping more groundwater, purifying to increase quality, or even desalination. Increasingly, leaders will be faced with difficult decisions that look more like trade-offs and dealing with these will mean they need to find energy and cost savings elsewhere to compensate.
2. Raise your expectations on resilience
Rising energy costs and tightening carbon legislation already have significant impacts on business but preparing for resilience on this basis alone is not enough. When a license to operate is not granted or a facility runs short of water it’s raw business continuity that’s on the line. This new urgency means that deeper and more robust resilience needs to be factored into value chains to cope with water related events that are becoming much more frequent. This may produce further financial pressure as budgets earmarked for mitigation projects have to be diverted into near term adaptation measures.
3. Invest beyond the factory gateImage may be NSFW.
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Becoming efficient in your use of water within your own operations is a given, but quickly reaches a point of diminishing economic
returns. Many of the more effective high return opportunities to make a difference to security of water supply most often lie beyond the organisation’s four walls. Leveraging budgets to build supply chain resilience or in collective action at the river basin level offers new routes to more effective outcomes, but these will require organisations to develop new collaborative skills sets to ensure they are successful.
4. Target your incentives and communications
Water sustainability is a complex subject and businesses can quickly burn a lot of time to little effect. Leaders need to find ways to target the right message to motivate the right audience to take effective actions at the right time in both their organisations and their spheres of influence: product designers will need to know how design affects a products water and carbon footprints, procurement departments will need to know how to build capacity for climate change resilience in key suppliers; in agricultural supply chains farmers will be need to appreciate the potential savings on fuel costs and long-term security by switching from pumping groundwater to smarter irrigation techniques.
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5. Scaling capacity in line with commitments
Businesses are increasingly hiring water sustainability professionals and while this clearly adds value, these people can quickly be overwhelmed by their complex global remits. Leaders need to recognise that committing to address transformations in their external environment means commitment to build internal capacity that is up to the task. Widespread training and capacity building will be needed for business functions like R&D, procurement, and front line operations who can make a difference.
