Sustainability: The Importance of Water Treatment in Businesses

4 October 2015

This paper is written by Koç University student, Işık Gökşin, as ‘Sustainability Management Graduate Course’ final requirement.

Background information:

It is no exaggeration to say that the world is running out of water resources, and the situation is certain to deteriorate drastically due to the effects of climate change increasing in the last 50 years. We are, as people, using excessive amounts of water every day. We use it in our households, in agriculture, industrial, recreation and environmental (such as artificial lakes) purposes. Even though there used to be a common perception of water being an infinite source around fifty years ago, with the increasing population all around the world becoming seven billion people, urbanization and industrialization. As the population growth is forecasted as approximately 3 billion people more by 2050, even more water will be needed to produce more food, and there need to be alternative and efficient ways of solving the water scarcity problem. Even now, there are 1.2 billion people who have no water to meet their demands in the areas with physical water scarcity, while more than 2.3 billion people of the world’s population don’t have access to clean drinking water. ^[1]

Even though the 97 percent of the World is water, it is mostly the salty water and not the fresh water that is needed for human use. The fresh water is only 3 percent of the total water amount in the world, while more than two thirds of this fresh water is frozen and the remaining is the groundwater that can be found above ground or in the air.

Figure 1: Distribution of Earth’s water: http://en.wikipedia.org/wiki/File:Earth%27s_water_distribution.svg

Water usage among different areas and water stress:

Agricultural sector consists of seventy percent of the worldwide water consumption for irrigation purposes, and it is estimated around 2,000-3,000 liters of water is needed to produce one person’s daily need of food. As sprinkler irrigation is not efficient much because of the water evaporation before it meets the root zone, there are other alternative methods such as drip or tickle irrigation, surge irrigation and some different sprinkle methods which are on the ground level to be more efficient. As these irrigation methods help loss of water, these systems are much more expensive than the usual methods. There are some improvements going on in order to be more efficient such as; new irrigation methods and technologies, crop types and water monitoring. ^[2]

The industrial sector follows the agricultural sector with 22% water usage worldwide. The industrial plants are using water for many different purposes such as for cooling, chemical processes or as a solvent in the manufacturing businesses. Water is also used as hydroelectric power, which is a low-cost, non-polluting and renewable energy source. In this process, the heat coming from the sun is used to evaporate water, ends up condensing in the air and flow downhill as rain. An artificial lake is built in that case to avoid using water out of a river, as it has smaller surface area and more efficient for evaporation. In the industrial sector a relatively small amount of pressurized water is used in water blasting and water jet cutters as it is also used for cooling during these processes to avoid overheating of the saw blades that it is used for cutting. The other industrial processes that water is used in are thermoelectric power production, oil refining, fertilizer production and the other chemical plant uses. If the right water-treatment is not done, the untreated water discharged as waste will cause both chemical pollution and thermal pollution (increasing the temperature of the water). ^[3]

Household water use consists of 8% of the worldwide water resources. Basic household requirements such as bathing, drinking, cooking and sanitation have been estimated to be equal to 50 liters for one person a day, and this doesn’t include water usage in gardening. ^[4]

Even though the recreational water use (for swimming, water skiing etc. activities) is relatively smaller than the other purposes listed above, it is growing every day. Environmental water usage is also a small amount compared to the other areas, but it is also growing percentage of total water use. This area includes artificial lakes to create a wildlife habitat, watering of natural or artificial wetlands and etc.

According to the World Business Council for Sustainable Development, the water stress means that there is no enough water for the use of all the areas stated above. The population growth, expansion of business activities, rapid urbanization, climate change, depletion of aquifers and water pollution are the first reasons to be listed causing the water stress. ^[5]

NGO’s and Institutions approach and actions taken:

Roughly 80% of the world’s population live in the areas where the threat to water security is regarded as high. As we will see, the situation is almost certainly going to become much worse in the future years, for the variety of reasons stated in the section above. In addition to lack of secure water supplies, there are other manifestations of the water crisis such as; more than 1 billion people lack access to safe drinking water. At any given moment in time, 50% of the world’s hospital beds are occupied by patients suffering from waterborne diseases, and these diseases are the leading cause of death for children under 5. More than 150 children die from waterborne diseases every hour. ^[6]

As this is the situation about the water, NGO’s and specific institutions/organizations are trying to warn the businesses and individual human beings. In UN World Water Report of 2006, it was noted that “there is enough water for everyone” and “water insufficiency is often due to mismanagement, corruption, and lack of appropriate institutions, bureaucratic inertia and a shortage of investment in both human capacity and physical infrastructure”. ^[7]It was when the businesses and individuals were called to a sense to start managing the water resources in a more efficient way.

Ceres, one of the leading non-profit organizations, is “mobilizing business leadership for sustainable world”, is trying to supply sustainable solutions for the companies and investors about many issues such as clean trillion, climate change, carbon asset risk, energy, supply chain, and water. Ceres have this new tool; Aqua Gauge to help managing the water risk for the businesses and investors as the pressure on water resources grows. This system is an excel-based tool where companies and investors can use to evaluate their existing water risk management approach with 20 core aspects; which vary from data gathering to stakeholder engagement. ^[8] Ceres defines the key elements of Corporate Water Risk as a function of three variables; company/sector specific characteristics, water conditions in particular geographies and strength of corporate management. ^[9]

Figure 2: Ceres Corporate Water Risk Dashboard: http://www.ceres.org/issues/water/water-and-esg-risk/key-elements-of-corporate-water-risk

As in outcomes water has a very important effect in a corporate’s material, financial and operating areas.

The Business Impact of the Water Crisis:

Businesses face 4 different types of risk because of the water crisis; physical risk, financial risk, regulatory risk and reputational risk.

The physical risk is the water scarcity that the businesses will face in the future when conducting their business operations, or flooding, or the polluted water that will unfit their business purposes. A number of industries have already begun to experience water shortages, especially in the context of competing water usages. An example for such industries may be the flower growing companies in Kenya, these companies around Lake Naivasha have been causing concern because their unregulated irrigation of the lake has caused the water level to drop. ^[10]

Businesses will also face a number of financial risks arising from the water scarcity creating problems as; higher energy prices, higher insurance, higher credit costs (where water scarcity becomes an issue, businesses will face higher credit costs) and lower investor confidence. ^[11] As in lower investor confidence, the Norwegian Pension Fund can be given as a strong example, which is one of the largest institutional investors in the world with $900 billion under investment and the Fund now publishes an annual account scrutinizing the water management policies of the companies it invests it, for the sake of assessing the risks to which its investment is being exposed. ^[12]

Another risk that the water crisis has on business is the regulatory risk, in the period of declining water supplies, governments will have to impose greater controls on water use. These controls will also increase the cost of operating of a business. These regulatory responses that the governments will gold may include, licenses to withdraw water, the refusal of licenses for other business purposes and the prices in general. ^[13]

As last but not least, and actually the most importantly for a business, there is a reputational risk that the water crisis have an impact on the businesses. Companies face reputational risk due to public perceptions that, for instance, they may be using more than their fair share of the water resources or in other words they may be using the water resources irresponsibly. WWF has observed: “The manner in which companies exploit natural resources continues to be the subject of public scrutiny. Where this scrutiny translates into public “outrage”, companies face dramatically amplified risks, especially when they are judged to be irresponsible.” ^[14]

Saving Water is a Business Imperative but also a Business Opportunity:

As it is pretty easy to be discouraged by the problems that water scarcity represents, it also enables businesses to create opportunities out of a better water usage way. By using less water for their operations they can reduce their costs, increase their competitiveness and improve resource utilization. ^[15]

Water efficiency measures can even help a company to get a new business. The tender by Novotel/Ibis, involving superior environmental design helped the company win its bid to build the Olympic village hotel complex at the Sydney Olympics. The company used recycled water for toilet flushing, reduced 50% of potable water from standard hotels and they reduced the number of baths per floor. ^[16]

Another business example of sustainable water solutions can be given for improved resource utilization, Nike’s European headquarters in Amsterdam. The building has cisterns on the roof to capture rainwater which is then used for its toilet facilities and for landscape irrigation. In this imaginative fashion, Nike saves money as well as 4 million liters of water every year. ^[17]

Thinking ‘Outside the Box’ Water Footprints:

Given the severity of the resource challenges facing us, we almost certainly are not thinking imaginatively enough about resource use. Turning to the particular issue of water scarcity, we may not be thinking imaginatively enough when we focus on how much water we might save when, such as flushing a toilet or doing the dishes. But it is probably necessary to think about water usage in a much more imaginative way.

A new concept has been introduced concerning thinking imaginatively, but realistically, about water usage. It’s called a product’s ‘water footprint’. A product’s water footprint refers to the total amount of water it takes, both directly (manufacturing) and indirectly (supply chain, transportation, etc.) to produce and distribute a product. ^[18]The water footprint costs may be much more than the product cost itself.

Conclusion:

In summary, companies, in order to be sustainable in their businesses should be watching out for their water footprints and in order to do some cost reduction they should be changing their business attitudes. As mentioned above, there are many risks that a business will come face to face if they don’t start taking action about their water treatment systems and it may cost them even more in the future. Most importantly, they should be doing some changes in order to help the world to be more sustainable and care about well-being, if they do want to continue their businesses in the upcoming years. Once they can get educated about this important issue, I believe that they will start to take action and they will induce individuals to be taking action too, and this world that we are living in will be a more sustainable and hopeful place.

References

Sustainability: The Importance of Water Treatment in Businesses