On July 28, the United Nations will recognize the one year anniversary of its declaring that water is a human right. Here at Dow Water, we’re marking the event by asking the question, “What is the Value of Water?”
A recent Black & Veatch study found that in 2011 “water emerged as the top concern of United States’ utility industry executives.” Every form of electricity generation requires reliable access to water for cooling. Moreover, persistent droughts and increased scrutiny of water pollution have only heightened utilities’ concerns about water risk.
Extreme weather events due to climate change and the resulting costs of adaptation are denting corporate profits and compelling more and more CEOs to address water and resource issues head-on. As articulated by BSR, a global business network and consultancy focused on sustainability, climate change will “test companies’ ability to effectively deliver high-quality products and services.” In a water-constrained world, water is, in fact, the new frontier for forward-thinking business leaders who want to increase productivity and improve human prosperity.
The Carbon Disclosure Project recently provided definitive evidence that water has entered the boardroom. In a questionnaire to 302 of the world’s largest companies, nearly 40 percent reported already experiencing negative impacts of water disruption, from drought or flooding to declining water quality, increases in water costs or pollution.
While companies have started to see the negative impacts of water uncertainty, most lack the metrics, visibility, or incentives to address their water use and risks. A business manager focused on meeting tough profitability standards can’t integrate water into the black and white of a profit and loss statement. Organizations like BSR aim to make the business case for water stewardship, but without incentives to improve water productivity, companies will focus elsewhere.
What is the right model to think about water, which is so intertwined with both basic human survival and business success? How should executives value the vital importance of water and do their part to manage it better? We can learn a great deal from the agriculture industry, which has made a science of “water productivity.” In large part due to improved crop yields, the total productivity of water in agriculture improved by at least 100 percent between 1961 and 2001. Because agriculture accounts for about 70 percent of world water use, the industry has had the strongest incentive and greatest impact.
Hara, a start-up that helps companies monitor their environmental impact, describes a large pharmaceutical company with U.S. manufacturing concentrated in one location. When faced with a restricted supply of water, the company examined their processes to find new efficiencies. Hidden in their processes, they were using fully twice the water necessary.
Levi Strauss has also placed a new value on water, which is critical to manufacture their iconic denim. It typically requires 42 gallons of water to “finish” a pair of jeans. On a new specialized line of jeans, the company saves from 28 to 96 percent of that water. By replacing the repeated wash cycles with ozone processing and removing the water from some steps, the company has created a unique product with a unique message for consumers. With the spring 2011 jeans line, the company expects to save 16 million liters of water.
Finally, the beer brewing industry is particularly sensitive to water use, and has made impressive strides in efficiency. Most breweries use four to five liters of water per liter of beer produced. Anheuser-Busch InBev has reduced their ratio from five to four, with plans to reduce it to 3.5 by the end of 2012. In some plants in water-sensitive areas, they have cut the ratio approximately in half and achieved significant savings on both water and electricity costs.
By thinking differently about water and valuing it as a critical resource, firms can increase their bottom line, while having a more positive impact on their local communities. One of the critical ways to to do this is to reduce the power consumed by water purification. Using the latest reverse-osmosis technology, companies can reduce the power waste of their process by 99 percent.
Some processes require especially high water quality, like silicon chip manufacturing, oil refineries, chemical production, and power plants. Water is often filtered through reverse osmosis twice to achieve the highest purity. Dow Water & Process has improved the energy efficiency of this “two-pass” system by 50 percent in the last 20 years. The method is so common that this has saved enough electricity to power New York City for a year.
Another approach to reduce the energy footprint of water treatment systems involves capturing waste energy throughout the treatment process. Innovative desalination technologies that use low-grade or waste heat instead of electricity have the potential to substantially reduce energy inputs, yielding a more environmentally benign process and lower operation costs. Other important technologies in the future include improved energy recovery devices in desalination plants like microbial fuel cells that will feed off wastewater and cogeneration plants built at the same location as wastewater treatment facilities.
Companies that rethink their water use and increase water productivity get better bottom-line performance and improved profits in the long-term. And by thinking of themselves as stewards of the water supply, firms can bring immeasurable benefits to their surrounding communities.
[Image: Flickr user fox_kiyo]
Snehal Desai is the the global marketing director for Dow Chemical Company’s Water and Process Solutions Business. To learn more about it, check out Dow Water‘s latest paper, “Thinking Differently About Water Part II – The Value of Water.”