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Circular water management: Still a drop in the bucket

For many large companies, water-related risks are still not a key factor in strategic decision-making.

While the risks associated with water are widely known within large businesses, the majority of companies still lack the tools and strategies to turn their data about consumption, scarcity and other water-related issues into actionable insights, according to an exclusive recent study conducted by GreenBiz and Ecolab, a global provider of water technology and services.  

The opportunity for action was well documented by the 2017 CDP Global Water Report, which determined that in 2017 companies committed $23 billion in global investments to mitigate water risks. However, in spite of the higher level commitment from corporate leadership teams and increased project investment, there still remain significant barriers to implementing circular water management strategies. A 2017 World Business Council for Sustainable Development (WBCSD) report cited four obstacles to water reduction reuse and recycling — regulation, resources, lack of awareness and lack of dialogue.

More recently, the 2018 State of Green Business report, written by GreenBiz with the help of Trucost (part of S&P Global), identified that 53 percent of companies' water use comes from supply chains, with 27 percent coming from cooling water and 19 percent from direct withdrawals.

While the practice of corporate water reduction target setting has increased by roughly 10 percent over the last five years, only 25 percent of global companies have established water reduction targets. Furthermore, only a quarter of global companies report on water-related risks. So, while the risks are known and the opportunities for savings are documented, plenty of work is still to be done.

One key finding is that there is plenty of opportunity to use better tools and improve collaboration between corporate leaders and individual site managers.
GreenBiz, in partnership with Ecolab, the U.N. Global Compact, Pacific Institute and Trucost, set out to determine the drivers and opportunities for continued action on corporate water management. Given the localized nature of water and the well-documented understanding that water is undervalued, the project analyzed how corporate goals are set; studied the level of interaction between corporate leaders and onsite managers; and considered the tools and technology needed to move projects to action. GreenBiz conducted a web survey of 184 sustainability professionals from large companies with annual revenue of at least $1 billion across a wide range of industries.    

Given the diversity of companies and industries surveyed, GreenBiz evaluated the priority level and activity on water management across various sectors. Overall, while the risks of water are known and water is an increasing priority for many companies, water is still is not a key factor in strategic decision making. Furthermore, there is a disconnect between corporate leaders and site-level managers when it comes to executing water projects. The large majority of companies do not provide incentives or other resources to site-level water projects; that lack of support is especially striking across industrial and basic materials sectors.

Similarly, 82 percent of corporate leaders are not sufficiently using advanced measurement tools such as submetering equipment and advanced data analytics tools to manage and prioritize water projects. Again, that gap is more pronounced across certain industries, such as the industrial and basic materials segments.

One key finding is that there is plenty of opportunity to use better tools and improve collaboration between corporate leaders and individual site managers. In order to truly move the needle on water, companies must adopt a smart water management strategy that leverages advanced technology and prioritizes a collaborative approach.

One company that is taking a data-driven approach to water management is Mondelez International, a global snack foods company and the parent company of numerous iconic brands including Cadbury, Nabisco and Oreo. According to Andrew Boyd, director of environment and sustainability at Mondelez, who is focused on global operations, the organization uses several high-powered tools to analyze and prioritize individual sites. These tools include Aqueduct, a product of World Resources Institute; the Global Water Tool from WBCSD; and the Water Risk Monetizer, a collaboration among Ecolab, Microsoft and Trucost.    

Mondelez used these tools to identify 32 priority sites where water is the most scarce with a goal of reducing absolute water use by 10 percent. Mondelez partnered with Ecolab to define a global approach of working with individual sites, doing plant assessments and introducing advanced technology, while constantly analyzing the business impact.

"Every year, we have a 2020 planning process and we interact closely with each individual site," Boyd said. "Corporate provides support, sharing and knowledge transfer and the site managers regularly update the network with sharing of best practices. Every month, we publish data internally by site, regional and globally with tips on why certain sites are better than others." 

This week, at the GreenBiz 18 Forum (appropriately located in Phoenix, Arizona) nearly 1,000 sustainable business leaders will convene to talk about a range of topics. If you are attending the GreenBiz 18 Forum, be sure to attend the workshop session "Best Practices in Circular Water Management" for an engaging discussion on the findings of the GreenBiz research project, to hear from corporate practitioners and to visualize a circular model for water.

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