Business in the world of water

Tom EggertWI Sustainable Business CouncilWI School of BusinessWI Department of Natural Resources

• Water supply and demand (population growth; increased scarcity)

• Water quality (250 million new cases of water-related disease per year; 10 - 12 million deaths)

• Geopolitics and international law (who owns the water? (surface; ground; shared; rain; sewage)

The Current Water Crises

• Total amount of water is constant and renewable

• Amount available =~ 34,000 – 44,000 km3(best estimates by UN)

• Problems? Distribution; timing; and erratic supply

• Water not only essential for humans, but for all life

How Much Water Is Available?

How much water will be withdrawn with respect to the amount that is naturally available?

Freshwater Stress is Increasing…Faster than Expected

---- 2005

• License to Operate

• Climate Change Droughts Stranded Assets

• Increased Production Costs and Interruptions

• Community and Regulatory Pressure

• Health of Employees

• Brand Image

• Limitations to Growth of Consumer Markets

Water Risks to Business

Water Ban in IndiaP

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Aug 2006: Kerala, India ban on Coke and PepsiCo products after Centre for Science and Environment said they contained unsafe levels of pesticides. Six other states in India prohibited sales at or near schools, colleges and hospitals.

Complex Interplay of Local and Global Influences…

WaterMore drops, more value per drop

It’s been said that we will run out of water before we will run out of oil.

WaterMore drops, more value per drop

Due to overpumping, the groundwater in several countries is severely or completely depleted.

WaterMore drops, more value per drop

Depleted aquifers leads to cutbacks in grain harvests

Which lead to higher food prices and food shortages

WaterMore drops, more value per drop

China ranks fourth in the world for renewable water resources, but because of its large population, it has only 1/4 of the global average of water per capita.

WaterMore drops, more value per drop

A Water Problem can fast become a hunger problem.

Redistribution Challenge

Agriculture: 70%

Industry: 22%

Domestic: 8%

Accounting for the whole system

Estimated water use by life cycle stage (%)

Unilever, 2005

Virtual Water – to produce one kilogram of…

1,300

liters

3,400

liters15,500

liters

Climate change impacts accelerate….

Impacts of historical water overdrafts & ecosystem changes manifest

Security through interdependency emphasized

Accountability for ‘virtual’ water uses/impacts emphasized

2012

Governments enable economic value of water

Global market opportunity for innovative solutions

Rapid gains in efficiency

Social tensions/conflicts and rivalries over water increaseLegal and moral liabilities about access and responsible use flareNational security interests inhibit progress towards international water rights management

Three Different Futures Could Unfold…

For your Company, is Water a…

Key Messages

• Technology is only part of the solution.

• Solutions are available only on a local level.

• Business cannot buy its way out of water problems.

• Creating trust helps to secure the license to operate.

• Growing water issues and complexity will drive up costs.

Key questions

•How can businesses be encouraged to see water-related problems and constraints as opportunities for innovation and value creation?

•How do we allocate water fairly for all users in a community, not just the highest bidders?

• Can you assess your water footprint? What measures do you have in place to monitor water use? What do your competitors do? What is best practice?

Thank you