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.
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.
[1] UNESCO[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
