Water crisis and companies: part of the problem and part of the solution

Private sector must prepare for a scenario aggravated by climate change, but can articulate for better governance for water resources


It's all over the news: Brazil is experiencing the worst water crisis in the last 91 years, according to the Ministry of Mines and Energy (MME). This situation has a direct impact on electricity generation, water supply and generates inflationary pressure, affecting the already strained budget of Brazilian families. The reservoirs in the Southeast and Midwest, which correspond to 70% of energy generated in Brazil, have 21.3% of storage capacity, according to the National System Operator (ONS) and the forecast is that by November this number will reach 10% . Although the government rules out energy rationing, the fact is that the situation is far from comfortable.

And the scenario tends to get worse, as we are more exposed to the effects of climate change. The rise in global temperature, which has already reached 1.09°C, tends to bring more frequent extreme events, such as droughts, according to the most recent report by the UN's Intergovernmental Panel on Climate Change (IPCC), released in August. 

Another factor that corroborates this risk scenario is the loss of surface water that has been occurring in eight of the twelve Brazilian hydrographic regions, according to a recent study carried out by MapBiomas. Between 1985 and 2020, the reduction of fresh water in rivers and lakes in the country was 15.7%.

Deforestation, which continues at high rates in important biomes such as the Amazon and the Cerrado, is one of the main reasons for this loss and contributes even more to this desolate scenario. With less forest, there is a break in the water cycle, resulting in a smaller flow of the so-called “flying rivers”, which bring humidity and rain from the Amazon to the Center-South.

Although rich in water resources, the country has been suffering from a lack of water governance. The existence of management instruments provided for in the National Water Resources Policy since 1997 - such as basin plans, granting and charging for water use -, which are at different stages of implementation in Brazilian hydrographic basins, has not been enough to reverse this situation.. It is at this point that it is up to the companies to make some reflections: based on what we are seeing today, it is inevitable that the reduction in water availability will be repeated over the years, affecting the volume and price of grants. Water is on the way to becoming a more expensive input, which should affect the production chain of many sectors.

Businesses are part of the problem as well as part of the solution. They can help in different ways: becoming more active in the governance of water resources, with more active participation in Basin Committees; investing in the so-called green infrastructure, with Nature-Based Solutions and actions to recover springs and permanent preservation areas; and also working on the recovery and planting of forests in degraded basins.

It is also necessary to advance in water reuse policies. This practice has already been successfully adopted by companies in different sectors, from petrochemicals to steel, with environmental and economic benefits: there are cases in which water recirculation exceeds 90%. However, the country lacks a specific national regulatory framework for the reuse of sewage water, not just industrial effluents. There are opportunities to generate new business from the treatment and reuse of sewage, which would contribute to increasing water security nationally. 

At CEBDS, we have a Technical Chamber dedicated to water that acts in the production of knowledge and articulation of solutions. In this forum, we discuss ways for Brazil to leave the negative scenario behind. We cannot wait idly for new crises to follow, or, worse, normalize the water scarcity and the impacts it generates on the pockets and lives of Brazilians. In 2020, we moved forward with the approval of the new legal framework for basic sanitation, which is already generating effects in attracting investments and holding concession auctions. Now, in the face of the water and energy crisis, the private sector can and should use its influence along the supply chain to outline more ambitious goals for water reuse and savings, reforestation initiatives, and lead new advances.


By Marina Grossi

President of CEBDS


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