Industrial uses of water and the environment
The blue frontier
Why humanity’s water footprint is just as important as its carbon one.
We will look back on 2019 as the year that the world finally woke up to its environmental crisis. The emergency is no longer looming. It is real. A record seven million people were displaced by extreme weather in the first half of 2019 alone – and that was before wildfires swept through Australia and California, and air pollution enveloped Indian cities.
From school children to presidents, the world is now tackling carbon emissions with renewed determination. But there is a problem. Focusing exclusively on reducing humanity’s carbon footprint risks ignoring another impending catastrophe – the depletion of our water resources.
Over 2 billion people already live in countries suffering high water stress. In 10 years, 700 million of us could be displaced by intense water scarcity.1
That is clearly not sustainable. Not only do we need to consume less water, but also become more efficient with what we do use. Industry is critical in this, says David Lloyd Owen, policy analyst, author and managing director of water consultancy Envisager.
“Globally, companies are responsible for some 20 per cent of the water used by humanity. So they have a major role to play. Industry can demonstrate that it is part of the answer,” he says.
Fair comparison
Measuring and comparing water use across industries is a vital first step to a water-efficient world. Much work is still needed, but efforts are underway.
One useful tool is the Planetary Boundaries (PB) framework. Developed by the Stockholm Resilience Center in 2009, the model attempts to measure humanity’s environmental footprint along nine dimensions, one of which is water use. It suggests we can consume up to 4,000 billion cubic metres of freshwater per year without damaging the planet – broadly in line with current useage, according to some estimates. But by 2030, world water demand is forecast to reach 6,900 billion cubic metres, far exceeding accessible and reliable supplies2.
For the world to stay within the PB boundaries, research shows that businesses should use no more than 52,915 cubic metres of water for every million dollars of revenue they generate3.
A different kind of water use measure comes from the United Nations. It looks at how much gross value added economic activity a business (or an industry, or a country) generates per unit of water consumed. This metric – known as water use efficiency (WUE) – is being championed by the UN as part of its Sustainable Development Goals (SDG), which aim to ensure the availability and sustainable management of water and sanitation for all. Crucially, the UN CEO Water Mandate allows such data to be verified by third parties.
“It has the potential to make external verification the norm,” says Lloyd Owen.
But before WUE scores can be used to distinguish the efficient from the wasteful, or even as the basis for official water targets, it is important to ensure they are truly comparable and truly reflective of each company’s water use. For now, this is probably not the case. WUEs range widely both across industries and among companies in the same industry.
Ending water scarcity, one investment at a time
Take brewing, a big water user. Overall, the industry produces some 1.9 billion hectolitres of beer a year4, and – from crop cultivation to consumption – uses at least 60 times as much water in the process5. Yet within the industry there are huge variations in water consumption from one brewer to another.
One international brewing group, for example, has reported a WUE score of USD1,850 of gross value-added economic activity per cubic metre of water consumed, while its rival only manages USD270.
The issue is that while the better-scoring brewer is clearly further advanced on the water efficiency path, it is at present hard to conduct a fair comparison as the calculations can vary widely.
“This highlights just how varied companies can be within a sector," Lloyd Owen says. "It also may point to different water use criteria being adopted. Does, for example, one company include the water needed to make the raw materials it uses while another only includes the water directly consumed?"
For the data to be meaningful, companies must analyse their water use across the whole production chain – something which many currently do not do. A typical clothing retailer, for example, will use relatively little water directly. Yet that ignores the fact that the cotton, from which the garments are made, is very water intensive to produce. Just one t-shirt uses 2,700 litres of water before it’s even worn (see chart).
Looking at the business in isolation not only downplays the role the company can play in global water efficiency (in this case by raising the issue with their suppliers), but also the extent to which it could be negatively impacted in case of water shock.
Additionally, location is not taken into account, and that can strongly affect the likelihood of water stress occurring.
Circular approach
Being water efficient means using less, but also reusing more. In other words, the world's industries need to adopt a circular economy approach – to treat waste water as a resource rather than as something to be disposed of. Real-time process monitoring and control of water use is particularly important to achieving that goal as it enables companies to develop the manufacturing processes with water efficiency in mind.
Some industries clearly use more water than others, and thus have more scope to push through change and reap associated benefits. Utilities or companies involved in food production are obvious candidates. But there are less obvious water users, too. A typical semiconductor manufacturing facility, for example, uses two to four million gallons of ultra-pure water per day, which means efficiency gains could be considerable.6
“The potential for innovation and its potential impact is arguably greater than any time in the last 100-150 years,” according to Lloyd Owen, who highlights smart water monitoring and management systems as key gamechangers for industrial water efficiency.
The impetus to act is strong – businesses which do not embrace water efficiency face increased risks not just from water shortages, but also from changes in regulation and growing awareness of environmental issues among consumers. Being more efficient thus makes financial sense, because it will enhance a company’s reputation and reduce its water-related risks, whether those come in the form of fines or manufacturing difficulties.
Water scarcity is as grave a problem as carbon emissions. It's time the business world realises that before it's too late.
[2] 2030 Water Resources Group, “Charting Our Water Future”
[3] "Towards defining an environmental investment universe within planetary boundaries", C.Butz et al, 2018
[4] Barth Report Hops 2018-9
[5] "Water Futures", WWF, SABMiller, GTZ, 2010
[6] Morgan Stanley, "The World's water crisis and industries at risk", 2019
