Managing water risk: Five top tips for businesses
As rising temperatures around the globe lead to more extreme weather events, water security and mitigating water risk are increasingly important topics for businesses.
With that in mind edie hosted the 2015 Corporate Water Risk conference which brought together industry experts to consider how to improve their company's water efficiency, stakeholder engagement and water stewardship.
The five easy tips below represent the collective wisdom of some of the most water-tight businesses on the planet.
1) Get the board on-board.
This point was made by Sainsbury's head of sustainability Paul Crewe, who reports directly to the company CFO. Crewe said the close link with the Sainsbury's top money man had enabled him to get the right investments to help cut water usage.
"It helps," said Crewe. "That everything we do is commercially viable. It is worth doing financially, because at the end of the day we are a UK plc."
"[Sainsbury's CFO John Rogers] is now overtly aware of the importance of sustainability. So when we talk about investing, he absolutely gets it. This is pound notes. If you don't do it, you lose pound notes out your door."
Responsibility for water issues now lies at board level in 62% of CDP reporting companies @Morgan_CDP— David Norman (@davenorman) January 29, 2015
2) Take care of the value chain
Brett Fulford, a sustainability leader at pharmaceuticals giant GlaxoSmithKline told the conference that just 3% of his company's water-use came from their own factories. 82% was used by suppliers at the raw material phase, while 14% was used by customers after purchase.
"It's all very well us investing in new processes in our factories," said Fulford. "But that's not going to make a dent compared to other areas of the value chain.
To that end, the company invested in education campaigns to encourage consumers to turn the taps off when brushing their teeth, as well as partnering with the Carbon Trust to tackle the supply chain.
Louise Nicholl, head of Marks & Spencers' Plan A intiative had a similar message about water stewardship in the supply chain.
3) Be willing to step outside your own operations
David Norman, a senior manager of sustainable development policy at brewing company SABMiller went one step further than Fulford, telling a story about a brewery in Colombia that was having its water prices hiked higher and higher with a corresponding fall in profits.
After speaking to the water supplier, they found that the main source of water – the river flowing into Bogota – was being filled with silt and sediment by a cattle farming operation upstream.
Despite having nothing to do with SABMiller, the company invested in an education program with the farmers, training them to use water and farm more sustainably.
The result was a clean free-flowing river and falling water prices.
"Although it was beyond our supply chain and the locals are naturally suspicious of any multi-national corporate, that small investment was a win for us, a win for the water company and a win for the farming operation upstream," said Norman.
4) Take action before you are forced to take action
"The problem with most resources is that they don't become finite until they run out," said Rich Clothier, the managing director of Somerset cheese manufacturer Wyke Farms.
After a dry winter dried up the local boreholes in 2005, the company was forced to haul water in at a cost of £100,000 over a two-month period – a significant cost for a family operation.
Their response to the drought was simply to dig a bigger borehole.
Said Clothier: "That once-in-a-lifetime event was never going to happen again we thought, but obviously, with the climate the way it is, it did. There was a realisation that we had to focus on water recovery and invest in the right technology because we faced a genuine business risk.
The company has since cut the amount of water used to produce a litre of milk by two-thirds, saving themselves 500 cubic metres of water every day.
Clothier's message of precautionary measures was specifically directed at small businesses, of whom 59% still do not have a plan in place to deal with extreme weather conditions.
5) Challenge industry norms
"Just because everyone else does something, doesn't mean you have to do it as well" said Vidyanath Gururajan, the innovations director at Branston, a potato processing company.
Gururajan slashed his company's water use by 60%, when he challenged the industry practice on washing potatoes.
He discovered that it was safe to wash potatoes using non-potable water, which is easier (and cheaper) to re-process and re-use. The recycling technology still cost £2m, but is quickly paying for itself
The thread linking the above tips freom the Corporate Water Risk conference is profit. Whether avoiding the costs of disaster (Wyke Farms) or cutting operating costs (Sainsbury's/ SABMiller), the companies mentioned are careful with water because it directly impacts their bottom line. None of these companies are charities. For them, water conservation and mitigating water risk is simply good business sense.