CEBDS is aware of the importance of water in industrial processes, and how the water crises experienced in Brazil in recent years have had a severe impact on the economy, leading companies to lose productivity or even stop operations, generating conflicts between society and the productive sector. Considering this scenario, the WBCSD brings to Brazil, with the support of CEBDS, the CEO Guide on Water – Building resilient businesses, which aims to stimulate increasing engagement from senior management in companies, to bring the issue of use, availability, risks and safety of water resources to the center of decision-making and business strategies.
Learn more about how CEO's Guide to Water can help your company's senior leadership see the importance of water not only as an input, but as a differentiator for business.
Why is water important for business?
Businesses depend directly on this important natural resource. This common good is shared with people, cities, other businesses and nature. And this competition will only get more intense. According to the World Bank, over the next three decades, the global food system will need between 40 and 50% more water; urban and industrial demand for water will increase between 50 and 70%, and water demand for energy production will grow by 85%. The materiality of water risks is clear and urgent. Demand for water already exceeds supply in several specific locations, as we saw in the recent water crises in Brazil, which particularly affected Brasília and São Paulo, in addition to punishing the Northeast region for years. Without any action, there will not be enough water available for the future needs of society and the environment.
Businesses also pay the price. Where water is not available for operations, companies need to spend more to cover the consequences of shortages or even change investment plans. Water risks directly affect the bottom line. To better plan for future problems and build resilience, there needs to be a fundamental change in the way companies price water.
Water should be a priority for the directors of all companies worldwide. Better water management is a key opportunity for companies to create and develop competitive advantages, while securing their operating licenses, reducing financial losses and generally ensuring the continuity of operations. But we need to go further. We need to consider water and its externalities in decision-making, not just in containment measures.
How does the lack of planning for water risks impact the business?
Lack of planning for water risks can lead to growth problems, as it increases the risk profile of companies, and consequently their capital costs. A study by Truscost 2017 showed that if all costs on water availability and quality had to be absorbed, this would result in an average reduction of 44% in profits for utilities and 116% for food and beverage companies.
Investors are increasingly paying attention to the issue of water and recognizing its real value. Therefore, they seek greater control over the issue in their investment decisions. For example, the recently launched Water Stress Test Tool reveals that even when exposed to medium-severity drought scenarios, most companies experience a downgrade in their credit ratings.
Learn more about the risks that companies may face if they lack a water business plan:
What opportunities can my company have with sustainable water management?
Investing in a business plan that considers water efficiency offers competitive opportunities for your company, for example, in offering solutions for water reuse and recovery of previously used water resources. This is one of the greatest unexplored opportunities to migrate from waste to resource.
How to implement water management in my company?
See below the seven steps that can help design and implement water management to meet your company's needs:
- Board attention to integrating water into business strategy and planning;
- Set meaningful and ambitious goals and objectives. Unilever example: By 2020, halve the amount of water associated with the consumption of the company’s products (compared to 2010);
- Price water appropriately to respond to its real risks and opportunities. Example from Nestlé: a theoretical price for water (between 1 and 5 dollars per m3) was established for the purpose of calculating payment for capital expenditures, considering the risk of the installation (Combined Water Stress Index);
- Implement innovative business solutions to achieve your goals and objectives;
- Dealing with water opportunities and risks in a shared way;
- Increase awareness and engagement among employees, suppliers and consumers;
- Advocate for political and financial strategies that support business investments in smart water solutions.
Discover practical cases of companies that already have water management in their businesses:
NESTLÉ – Making water circulate
“Zero-water” technologies have been used in a water-stressed area to recover water from milk (at a milk powder production facility in Mexico) for daily operational water needs. The dairy can operate without using any groundwater, running solely on water recovered from the milk.
AMBEV – AMA
AMA is a collective initiative by AMBEV. The goal is to bring clean water to those who do not have it. When purchasing AMA water, all profits, 100%, go to projects that bring water to the homes of families living in the driest region of Brazil, the semi-arid region. The projects developed in the communities bring immediate results to people's lives. In one year, more than 6,660 residents of nine rural communities in the semi-arid region already have access to water.
BRASKEM – Water Reuse
In 2012, Braskem innovated and replaced the collection, treatment and use of raw water with the consumption of treated domestic sewage supplied by the Aquapolo Project, which is the largest project for the production of industrial reused water in South America and the fifth largest on the planet. Since then, Braskem has operated with a water reuse rate of around 97% in the ABC region of São Paulo, a southeastern region of Brazil that has a history of water crises in 1964, 2003, 2014 and 2015. In the last 4 years, from 2014 to 2017, approximately 30 million m³ of reused water were reused through the Aquapolo Project, freeing up the consumption of drinking water for the ABC region in a volume equivalent to 12 thousand Olympic swimming pools. The use of reused water has established itself as a successful case of both adaptation to climate change and the circular economy of water, as it allowed industrial operations to remain under normal operating conditions during the water crisis of 2014 and 2015, breaking the linear practice of capturing, using water, treating effluent and disposing of it in water cups, starting to reuse treated domestic sewage back into the production process, and allowing the mitigation and control of operational (or physical), financial, market, reputational and regulatory risks related to the management of water resources.
Check out the CEO’s Guide to Water – Building Resilient Businesses:
