Water Footprint Assessment: A Guide for Business
67
Water Footprint Assessment: A Guide for Business
67Paperback
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Overview
Product Details
| ISBN-13: | 9781910174562 |
|---|---|
| Publisher: | Taylor & Francis |
| Publication date: | 07/18/2015 |
| Series: | DoShorts |
| Pages: | 67 |
| Product dimensions: | 5.81(w) x 8.25(h) x (d) |
About the Author
Read an Excerpt
Water Footprint Assessment
A Guide for Businesses
By David Tickner, Ashok Kumar Chapagain
Do Sustainability
Copyright © 2015 David Tickner and Ashok Kumar ChapagainAll rights reserved.
ISBN: 978-1-910174-56-2
CHAPTER 1
Introduction
IMAGINE THAT YOU NEED TO BUY SOME BREAD. As someone who thinks about sustainability (which we assume is the case given that you're reading this DoShort), you want to buy the loaf with the best environmental performance. You know that your decision should take account of several factors. One of these is water.
In the shop you pick up two loaves to compare. The packaging of each declares its Water Footprint. One has a footprint of 10 litres. For the other it's 100 litres. There's not much different in price or taste. So you decide that the best choice is the bread with the lowest footprint. Right?
Not necessarily.
It could be the case that the wheat that made the flour for the 10 litre loaf was grown in an irrigated system using water abstracted from streams in parched Australia. The flour for the 100 litre bread might have come from the rain-fed fields in relatively soggy Scotland. Now ask yourself, which loaf has the greater environmental impact? More specifically, which bread should you buy if you care about our over-stretched river and wetland ecosystems?
If you want to address your carbon footprint you need to know your numbers. The more CO2 or other greenhouse gas you pump into the atmosphere, the greater will be your contribution to climate change. You can tell if you're reducing your negative impacts because your footprint will diminish. There are implementation challenges and methodological issues to grapple with, but the concept is simple. And the idea is the same wherever you are in the world.
Water is more complex. Size may not matter so much; context is often more important. Knowing that the production of a loaf of bread requires 10 or 100 litres of water might be a useful starting point but if you want to understand how sustainable your Water Footprint is you need more information – about the degree of water scarcity where the wheat was grown, the pollution levels in rivers or aquifers, the extent to which multiple users in that location are collectively putting pressure on hydrological resources and the social costs and benefits of using all that H2O.
So what is the point of estimating Water Footprint numbers if they don't provide us with a simple guide to action?
This DoShort will try to answer that question. It describes the evolution of the concepts that underpin Water Footprint tools and methods and it explains the ways in which Water Footprints can be calculated. It discusses the way in which Water Footprints have been used to provide answers to questions that many businesses are asking and it highlights some of the questions that Water Footprint approaches can't answer. And it sets out the main advantages and disadvantages – the positives and pitfalls – of using Water Footprint approaches.
Perhaps most importantly, this book provides some guiding principles – or golden rules – that you should follow if you're thinking about looking at Water Footprints as a way of helping your business.
First, let's remind ourselves of what's happening to the world's water resources and why all of this matters ...
CHAPTER 2Context: Water, Business and Risk
2.1 The water's edge
WE ALL LIVE AT THE WATER'S EDGE. Whether we're at the end of a pipe or on the banks of a river, we rely on water to grow the food we eat, generate our energy and lubricate the industries which provide the stuff we buy. Water also provides for many of our most basic human needs. Contrary to popular perception, the water that we use doesn't really come from the tap or tank or pipe. We take our water from nature – from rainfall or rivers, from lakes or aquifers. After we've finished with it, we return some of our water, often in a reduced or polluted state, to those sources.
There is increasing concern that the world is facing a water crisis, driven by global 'megatrends' including rapid population growth, epochal shifts in the global economy and the looming impacts of climate change. All of these factors will add to the pressures on the rivers, lakes, aquifers and wetlands from which much of our water is taken.
The consequences of such pressures are already being felt by people and wildlife across the planet and unless governments and others implement rapid and radical improvements in water management the situation is likely to get worse. Water resources are being consumed faster than they can be replenished in large parts of China, India, Mexico, the Middle East, the Mediterranean region, Central Asia, Australia, southern Africa and the USA. Stories about conflicts between water users arise with depressing frequency. The impacts of pollution, chronic water scarcity and acute drought in some countries have impacted on households, towns and cities. These changes have also influenced global wholesale and retail prices of commodities (even as we are writing this DoShort, a drought in Brazil is reported to have driven the costs of coffee to record levels and there is mounting concern about the economic impacts of an historic drought in California). Climate change introduces a new element of unpredictability to rainfall and river flows which is very likely to exacerbate matters.
Ecosystems are suffering too. The combination of overuse of water, pollution, a huge expansion of water infrastructure such as dams, overfishing and the introduction of invasive species is profoundly altering the health of river and wetland habitats. As one indicator of this, the Yangtze River dolphin – the baiji in Chinese – is thought to be the first cetacean (whale or dolphin) to be driven to extinction by humans. Dolphin species in the Ganges, Indus and Mekong Rivers are faring little better. It's not just dolphins: authoritative reports have described rapid declines in a wide variety of fish, mammals, birds, amphibians and other creatures which live in, or depend upon, freshwater.
2.2 The good news?
It's not all doom and gloom. In global terms there is probably enough water to go around, despite those megatrends. Even in countries or regions where water is scarce, innovations in farming practice and better water allocation rules can make a difference. We know from experience that rivers which have been grossly polluted by sewage and industrial effluents can be cleaned up relatively quickly given sufficient political impetus and capital investment (tackling pollution from other sources, such as agriculture, is trickier). There's hope for freshwater biodiversity too. In the parts of Europe, for instance, populations of some wetland creatures, such as otters and bitterns, are recovering after decades of decline.
Most governments understand that water is important even if many have struggled to address the conflicting demands from an increasing number of water users. Some – especially those which have suffered crises through repeated floods or droughts or other disasters – have begun to invest financial and political capital in efforts to tackle the problems. China provides an interesting example. After the Yellow River dried up once too often in the late 1990s, the Beijing authorities put in place radical measures to restore its flow. More recently, the Chinese government made water conservancy the central theme of its 'number one' policy in 2011 and set out 'red lines' on water pollution, water allocations and efficiency of water use. It also announced a massive budget hike for water management. All of this has been prompted as much by concerns about the political and economic consequences of scarcity, pollution and ecosystem degradation as by any altruistic concern for biodiversity.
Other countries have also responded to chronic water challenges. Since the mid-1990s a wave of progressive water policies has swept the planet. New laws in countries such as Mexico, Kenya and South Africa put the highest priority for water allocation on meeting the most basic human needs and on ensuring that a strategic reserve of water flows through river systems to downstream users (hydrologists and freshwater ecologists call this an 'environmental flow'). Withdrawals of water for economically productive purposes – such as agriculture or industry – are meant to be secondary priorities.
There's a catch, inevitably. The combination of massive demand, economic dependence on water, contested politics, weak institutional arrangements and a complex array of vested interests has meant that it has proven very difficult for governments to implement such policies. Even in China, the Yellow River isn't yet flowing to the levels that were intended despite the clear direction from Beijing. Water management bodies are insufficiently resourced in many countries and when it comes to the crunch of re-allocating water from one user to another or enforcing stricter pollution controls they frequently find that the political wind is against them. Strategically important sectors, such as energy utilities, or groups with strong influence, such as farmers, often receive the water they ask for regardless of what the policy says.
2.3 Risky business
Think of something you bought recently – anything will do. That loaf of bread we discussed earlier perhaps, or a new shirt, or the laptop or tablet you're using to read this. It's very likely that water has been required for irrigation, processing, cleaning or cooling purposes at some point in its production. In most instances there was no alternative substance that could have been used. Water is both universally needed and non-substitutable.
Think for a moment about what this could mean for your business. You might have operations or, more likely, suppliers scattered across continents. For many, water will be a critical resource. It may be the case that, in one or more of those locations, water scarcity or pollution might be having an effect on production. If that's not already happening, it's increasingly likely that in future, somewhere in the world, there's a water-related risk which could affect your company.
Now apply this at the scale of whole economies. The combination of increased demand for water, pollution, poor management and climate change, together with ever-more complex and globalised supply chains, means that water-related risks arising in different parts of the planet are affecting more and more companies. Captains of industry are worrying. The World Economic Forum, in its 2015 survey of global business risks, concluded that water crises are likely to have the biggest impacts on economies around the world, ahead of challenges such as fiscal crises in key economies and structural unemployment.
In recent years, experts and commentators have published hundreds, if not thousands, of books and articles about the impacts of water scarcity or pollution on companies. An accepted typology of water-related business risk has emerged (Figure 1). In essence, problems can stem from:
• Shifts in regulation such as the licensing and pricing of water abstractions or pollution permits. As well as any direct impacts on costs from new regulations, the uncertainty which arises from varying regulatory regimes can hamper business planning.
• Potential damage to reputation and brand value, stemming from changes in the public or stakeholder perception of the company's impacts on social values linked to water. Companies, especially multinationals with a high profile, can be easy, and sometimes fair, targets for those seeking to apportion blame for pollution or depletion of rivers, lakes and aquifers or problems linked to unequal access to water supplies.
• A straightforward physicalscarcity of water, or at least a scarcity of water that meets quality standards necessary for production. Such scarcity can lead to factories or facilities shutting down, temporarily or permanently. This is, at root, the issue which gives rise to much regulatory or reputational risk, but it can in itself have direct impacts on a business, especially during drought conditions. (It's worth noting that in some places, flooding can pose problems for companies too.)
For many companies, these risks pose very immediate challenges. The costs of mitigation measures can be significant, in terms of financial or social capital, or both. Drinks manufacturers have been the first to feel the hydrological squeeze. If you talk to representatives from any well-known multinational beverage company, it's likely that they will regale you with stories of a bottling plant being closed because of concern about its real or perceived impact on local aquifers, or of a brewery needing to buy in tanker-loads of water because of shortfalls in piped supplies. In cities such as Dar es Salaam in Tanzania, companies like SABMiller (one of the world's largest brewers) have felt the need to invest substantial sums drilling new boreholes because public water utilities just haven't been able to cope with the burgeoning demands of a rapidly growing population.
Increasingly, voices from other sectors can be heard echoing these experiences. Nestlé (which makes food as well as drinks) is now vocal about the way in which water scarcity and pollution present strategic risks to agricultural supply chains. Retailers like Sainsbury's and M&S include water prominently among their sustainability priorities. IPIECA, the environmental body for the oil and gas sector, has launched an initiative to help its members understand and address water-related risks. Textiles and mining companies are, to one degree or another, following suit.
Major institutional investors are also now asking questions about water. CDP (formerly the Carbon Disclosure Project) surveys companies about water- related risks in order to inform investors of the state of play. Currently, the survey is backed by 573 different investors representing some US$60 trillion in assets. In CDP's 2013 survey, 70% of Global 500 companies reported exposure to substantive water- related risks; and 64% of them said that such risks were expected to impact now or in the next five years.
2.4 What's yours is mine
As the global debate about water and business has grown, the concept of shared risk has emerged. Water is a common pool resource. Where pollution or scarcity occurs, there are normally multiple users or polluters of the river rather than a single culprit. Declining quantity or quality of water in any river, lake or aquifer will impact in some way on everyone who uses that water, as well as on freshwater ecosystems. The corollary is that, in any given location, a single company can't possibly manage its risks by acting alone.
To give a hypothetical example, a brewery manager who draws water from a particular river might put in place measures to ensure that his or her operation is supremely efficient in its use of water. But if all the other farmers, factories and facilities along the river remain profligate then the river might still dry up. Our brewery manager will then find that he or she still struggles to get enough water to meet production targets. The only way to ensure that water supplies keep flowing might be to work with neighbouring factory and facility managers to understand collective exposure to water-related risk and to encourage all of them to implement carefully defined water use standards. Other stakeholders – be they householders, dam operators, fisher-folk or conservationists – might also demand a say in the process.
All these actors might need to commit to a package of measures which could include, say, developing new water sources, stricter wastewater treatment, improving management of wetlands and economic measures such as water pricing. Because there are always trade-offs, and because water is a common pool resource and often regarded as a public good, governments or regulators will normally have the final say on standards and measures. Businesses can play an important role by drawing attention to the issues, encouraging transparent dialogue, implementing good water stewardship practice and providing resources for some 'public good' measures such as enhanced river and aquifer monitoring.
2.5 From confusion comes wisdom
Water management is often complex, especially when it comes to designing and implementing standards and measures that address shared risks. It's not simple to balance upstream versus downstream users, the costs and benefits of different management options, short-term and long-term objectives, the needs of rich and poor people. For anyone who wants to engage with water, a first step is to understand that it can be a confusing issue. Silver bullets are rare.
If governments are to put in place targeted measures to ensure that rivers flow, aquifers stay clean and the wider population benefits, and if companies are to thrive in this context, they will need tools that can help them cut through the confusion, improve their understanding of shared risks and point to joint solutions. There has been substantial innovation in this field over the last decade, led by academia, NGOs and some of the most progressive (and vulnerable) multinational companies.
Among the new approaches which have emerged are Water Footprint Assessment techniques which map and measure the invisible, or virtual, link between water users in one part of the world, the products they grow or make and the companies and consumers, often in far off lands, who rely on such production.
(Continues...)
Excerpted from Water Footprint Assessment by David Tickner, Ashok Kumar Chapagain. Copyright © 2015 David Tickner and Ashok Kumar Chapagain. Excerpted by permission of Do Sustainability.
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