The world’s fresh water supply is running out. Already, one in five people have no access to safe drinking water and the water crisis is cited as the number one global risk to society in terms of impact*. Growth in agricultural production, urbanisation, energy demand and the rise of the middle class in emerging markets have all led to demand for water growing at twice the rate of population increase.

So what can businesses do to help combat the global water crisis? It’s a complicated challenge. Water is a shared resource with many complex interdependencies that have a direct impact on everything from climate change, energy and agriculture, to business and the economy.

This increases pressure on businesses to build long term resilience to water availability into their strategies and work with others to address a wide range of water related issues, both locally and globally. Water affects all areas of commerce so more businesses need to wake up to the important role we can play in helping to address the global water crisis. In some businesses, this is happening already, water is an issue that is slowly rising up the boardroom agenda but there is more work to be done in understanding the true importance of water and the role that the private sector can play in safeguarding it.

Appropriately ambitious

As a beverage company, water is an essential ingredient of our products so of course it is a particularly serious and growing issue for us at Diageo. We have a big responsibility to promote water stewardship and we have increased our prioritisation of water significantly over the years, both in our own operations and increasingly now in our broader supply chain.

In our recently announced Water Blueprint, our strategic approach to water stewardship, we have scaled up our efforts to address water issues in all areas of our business, with some appropriately ambitious targets to reach by 2020. This includes a commitment to replenish water stressed catchments with the equivalent amount of water used in our final products which are produced in water stressed areas.

We are not alone in our focus on developing innovative strategies to help manage and protect water resources. Coca-Cola has developed leading water programmes and their shared learnings have been important as we plan our new programmes. In 2013, they replenished around 108 billion litres of the water used in their products.

Whilst efforts by some businesses should be applauded, it’s vital to realise that the key to making a real difference, a sustainable long term impact, is collaboration. At Diageo we know we are not experts in this field and we can’t do it on our own, so partnering with NGO’s, local government, charities and other organisations is key to the success of our programmes. For example WaterAid, who we partner with on a number of projects, has a wealth of expertise and has a strong track record in delivering effective water development projects.

Scaling up

Partnerships like this are absolutely essential if we are to make any sort of meaningful difference, we are part of a joint effort and most of our water projects involve multiple partners. For example, our Water of Life programme, key to our Water Blueprint, has a project in Ghana working with numerous local authorities and NGOs to provide access to clean water for local communities. Since 2007, it’s supported 34,000 local jobs and livelihoods in over 60 communities across the country, with 79% of households being dependent on the programme. On average there has been a 33% reduction in time used to source water and a 3-15% reduction in water borne diseases in beneficiary communities. Understanding the real impact of water development projects on communities is critical to measuring success.

Projects like this are inspiring and they do make a real difference, but they are not without their challenges. Scaling up a project from one pilot requires a lot of investment to ensure that it has impact, and it takes time and ongoing work with local communities to develop a long term solution beyond just two or three years. Getting the right baseline data that will help identify whether a meaningful difference has been made is also difficult, but essential to credible impact assessment.

Action points

In our experience, there are some key actions that businesses can take to collaborate effectively to address the water crisis. Firstly, it’s important to properly quantify risk, using robust data (which should be shared) that looks not only at the volume of water used and which areas of the business should be focussed on in order to get results, but also the financial implications.

Secondly, working with the experts is essential and identifying third parties to work with that have real expertise and that have been independently recognised for their success, is a major step towards a collective approach to managing and protecting water resources.

Lastly, adopting new ways of working with partners and developing a new culture of tapping into the expertise, skills and specialists out there will go a long way in creating a truly collaborative environment that will give us the best chance of making real, measurable change.

At Diageo, our water strategy is a process of continuous improvement, always looking to develop new ways of working together that will increase the impact we have and learning from what others have done. It is only through increasing our efforts to address the water crisis, through local and global advocacy and through working collaboratively that we will have a positive and lasting impact on the global water crisis.

Michael Alexander is head of water, environment and agriculture sustainability at Diageo.

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