Water is a strategic resource for most global businesses.
The reasons are straightforward. A growing population and increasing economic activity coupled with declining water quality in many regions has resulted in increased competition for water in the public and private sectors. While the term “water scarcity” is frequently heard, we are more specifically experiencing greater competition for water. The amount of fresh and accessible water is static; we do not create new water or “use up” existing supplies. Instead we are placing greater demands on an irreplaceable natural resource.
The response to this increased competition is multifold. Most importantly, the true value of water is increasingly being recognized. From a business perspective, the value of water resides in business continuity (having an appropriate quantity and quality of water), license to operate, and brand value. This recognition of value translates into growth in the number of companies mapping risk within watersheds, measuring usage in direct operations and the supply chain, establishing water-related targets and goals, deploying technologies to increase water reuse and recycling, engaging with a wide range of stakeholders, and increasing disclosure of water management efforts.
Water scarcity is fundamentally about understanding water risk and resultant business risk (operational, regulatory, and reputational), but understanding risk is only the beginning of a successful water stewardship effort. Stewardship requires engagement with stakeholders to collaboratively manage water as a shared resource; it is not possible to address the challenges posed by water scarcity alone. The need to engage with other peers and other sectors, non-governmental organizations (NGOs), communities, and governments to develop broad watershed-level approaches to managing water is essential.
Water scarcity is also driving innovation. We are witnessing the creation of a new paradigm for water management that includes initiatives such as improved water data acquisition and analytics, precision agriculture, improved water efficiency, addressing water losses from pipeline leakage, energy efficient water treatment technologies, and a move to extract energy and nutrients from wastewater.
This report reflects these changes in how businesses are managing risk and creating
business opportunities. The CDP Water Disclosure information request is an important effort, along with other global initiatives, in transforming how we manage one of our most essential natural resources.
We are proud to be part of CDP’s effort to increase awareness of the importance of addressing water scarcity and resulting business risks and opportunities. We recognize the efforts of those companies that responded to the information request, to the investor organizations which are signatories to CDP Water Disclosure, and to our colleagues from Molson Coors, Norges Bank Investment Management (NBIM), and Irbaris who have shaped a successful 2011 CDP Water Disclosure program.
Will Sarni
Director and Practice Leader, Enterprise Water Strategy
Deloitte Consulting LLP