, August 23, 2006


[Rachel's introduction: There's a cruel irony in a new report just out from the World Wildlife Fund: Water crises, long seen as a problem of only the poorest, are increasingly affecting some of the world's wealthiest nations.]

by Joel Makower


That's a far cry from the usual water-related enviro-screed, which typically cites U.N. data pointing to the 1.1 billion people around the world who lack access to improved water supplies and the 2.6 billion who lack access to improved sanitation. It's become chic to say that, "In the 21st century, water will be the new oil."

All true, of course. But as the WWF report, Rich Countries, Poor Water (2.6 Mbyte PDF), points out, a combination of climate change, drought, and loss of wetlands that store water, along with poorly thought out water infrastructure and resource mismanagement, will lead to increasing water problems in countries such as Australia, Japan, the U.K., and the U.S.

In Europe, countries on the Atlantic are suffering recurring droughts, while water-intensive tourism and irrigated agriculture are endangering water resources in the Mediterranean. In Australia, the world's driest continent, salinity is a major threat to a large proportion of its key agricultural areas. Despite high rainfall in Japan, contamination of water supplies is an extremely serious issue in many areas. In the United States, large areas are already using substantially more water than can be naturally replenished. This situation will only be exacerbated as climate change brings lower rainfall, increased evaporation, and changed snowmelt patterns.

Says WWF:

"Some of the world's thirstiest cities, such as Houston and Sydney, are using more water than can be replenished. In London, leakage and loss is estimated at 300 Olympic-size swimming pools daily due to ageing water mains. It is however notable that cities with less severe water issues such as New York tend to have a longer tradition of conserving catchment areas and expansive green areas within their boundaries."

The implications for companies doing business in the industrialized world are implicit if not explicit: access to water could easily become a constraint to operations. In some cases, water-related problems could lead to decreases in water allotments, more stringent water-quality regulations, growing community activism, and increased public scrutiny of water-related corporate activities. These may impact site selection, license to operate, productivity, costs, revenues, and, ultimately, profits and corporate viability. As the Pacific Institute put it in a 2004 report detailing risks to the private sector from inadequate freshwater resources: "Water-related risks now pose a potential multi-billion-dollar threat to a wide variety of businesses and investors."

(I've posted previously on this theme -- see, for example, this and this.)

What to do? The WWF report suggests that we have to change "our attitude toward water."

"It is clear that fresh water has long been an under-appreciated and undervalued resource and the attitudes of developed country governments, industries, and populations to water need urgent revision."

Addressing this, says WWF, will involve the proper and equitable pricing of water and the ecosystem services provided by freshwater flows; the ending of subsidies that encourage wasteful use; ramping up water conservation and recycling efforts; maintaining and restoring aquatic ecosystems; and more.

That's just for starters. WWF says we'll also need to deal "openly and accountably" with water. That includes accounting for the cumulative impacts on human and natural water systems, "a factor often ignored in one-off project impact assessments"; and adopting a precautionary principle where knowledge of impacts or natural systems is inadequate.

The bottom line: Companies should expect to find water issues rising to the level of awareness that energy conservation and efficiency has seen in recent years. The good news is that companies that already have implemented comprehensive energy efficiency and management systems will have a jump on those that haven't. Addressing both energy and water involve extremely similar processes: conducting audits and establishing a current baseline; identifying cost-effective, low- hanging fruit for making efficiency improvements; generating organizational awareness of the issue through effective communication and training; getting top-level buy-in to tackle the bigger, longer- term, and more challenging issues, such as water-intensive manufacturing processes; engaging suppliers, activists, and other stakeholders; measuring and reporting; and on and on. You know the drill.

And along the way, some leadership companies will establish themselves with innovative technologies and practices, smart and effective partnerships, and new business models and opportunities.

Even before that happens, customers, regulators, and activists will likely be chiming in, inquiring about what companies are doing to mitigate the risks of doing business in a world where access to water is a constraint to productivity and profits.