Top 10 business benefits of reducing water consumption

As Business in the Community (BITC) recently warned, droughts and water scarcity pose a significant risk to the environment, society and the economy. But when it comes to conserving water, small adjustments can have a big impact on businesses...

BITC issued a call for UK companies to take action on water by releasing a report highlighting the key challenges such as water scarcity and increased risk of flooding – posed by climate change.

Many businesses still do not realise the importance of sustainable water management thanks to its relative low cost, although it can equate to 1 to 2% of annual turnover. However, mismanaging water can hamstring a company, whether through a broken supply chain or bad press, while a sustainable water program can slash operating costs.

In that spirit, here are 10 ways in which your business can benefit from water preservation:


1) Reduce costs

Water costs can be reduced by up to 50% by investing in no- and low- cost water reduction technologies. Efficient water management will reduce the cost of water consumption and disposal and associated heating costs.


2) Develop resilience to water scarcity

Almost one quarter (22%) of companies responding to CDP water programme’s 2014 information request reported that issues around water could limit the growth of their business. Minimising water consumption can help to reduce exposure to water scarcity which can disrupt and therefore damage brands.


3) Develop resilience to flooding

According to the Federation of Small Businesses, small firms lost more than £830m because of the 2013/14 floods in the UK, with the average cost to each business in flood hit areas estimated at £1,531. Firms in flood-hit areas suffered from reduced demand for goods and services, while transport disruption affected supplies and led to staff absences.


4) Realise market opportunities

A wide range of companies – from construction firms to shampoo manufacturers – are gaining competitive advantage and realising new market opportunities, by meeting consumer needs through supplying products and services that, for example, enable water efficiencies, provide sustainable drainage solutions or protect from flooding.


5) Respond to investor expectation

Investors are increasingly concerned about potential impacts to the bottom line, and the threats that poorly understood and managed water impacts pose to the future performance of their investments. Through CDP, a large and growing number of institutional investors are asking their portfolio companies what they are doing about water.


5) Comply with government policy and legislation

Governments have increased expectations for corporate sustainability around water issues. For companies operating in the UK, key pieces of current and forthcoming legislation and policy include the EU Water Framework Directive (requiring a more holistic approach to the management of water quality) and the 2014 Water Act (which sets out proposals for changes to charging and abstraction regimes). 


7) Meet consumer expectations

In the UK, expenditure on ethical goods and services has tripled in the last decade, and nearly 50% of consumers will pay a premium for environmentally-friendly products as public awareness of water scarcity increases, affecting purchasing decisions.


8) Ensure a licence to operate

Companies are increasingly recognising that they need to work with other river basin users, including local communities, to ensure that they are not taking an unfair share of water, or polluting local ecosystems and creating disputes.


9) Reduce carbon emissions

By better understanding the energy implications of heating or chilling water as part of the manufacturing process, businesses can cut their energy costs and reduce their carbon emissions too. Moreover, using less water creates less wastewater, which in turn uses less energy and costs less money.


10) Ensure long-term positive financial performance through valuing water as a natural capital

Many businesses do not consider the risks to their business if the quality and/or availability of nature’s services, including water are affected. A business that puts a value on the services it draws from nature will be able to make more informed investment decisions, which mitigate risk and improve resilience. Positive long-term performance relies on an understanding of the interdependency between financial, social and environmental factors.


Lucinda Dann

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