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How to do business in a world running out of water

If there’s any doubt that water crises loom over the globe, consider these news headlines from a mere 10 days in January: from Brazil, “Sao Paulo state faces worst water crisis in its history”; from Nigeria, where 73,000 deaths were tied to water scarcity, “Water shortage deadly”; from Ireland, “Thousands more to take to the streets over water.”

Protests and riots over water also dominated headlines from Parbatipur and Maheswaram, India, where residents “had no drinking water for two weeks.” Meanwhile, newspapers in Winnipeg, Canada, warned residents to boil water before drinking it. Those in Flint, Mich., were just plain told not to drink tap water. And a water dispute in parched California had to go to the U.S. Supreme Court to be resolved.

In this context of ever-rising tension over rights and access to clean water, the United Nations Global Compact and the Pacific Institute have issued a Guidance for Companies on Respecting the Human Rights to Water and Sanitation (PDF). The key takeaway for businesses is that water scarcity and resulting human suffering — which can turn into social turmoil reverberating through local economies — don't look likely to recede anytime soon, putting pressure on companies to be on the right side of the equation. They'd be smart to act now to mitigate potential risk.

“We think this is broader than CSR. This is not just philanthropy," Mai-Lan Ha, a lead author of the report and senior research associate at the Pacific Institute, told GreenBiz. "It's insuring that as a business you have enough water for operations but also ensuring that the community where you're doing business also has access to water," which alleviates risk. Companies are grasping the compelling business case for water stewardship, she said. "It is core to makng sure a business is successful in the future."

Indeed, business leaders gathered last month at the World Economic Forum — not to mention recent U.S. intelligence reports (PDF) — cite water crises as likely to have significant impacts on global security and economic activity in the years ahead. The U.S. Office of the Director of National Intelligence predicts that the next 10 years will usher in a convergence of environmental and social fallout linked to water issues, as many countries will experience "shortages, poor water quality, or floods — that will risk instability and state failure."

That means that gone are the days of cheap water when companies could use massive volumes for operations without concern about whether there's also enough water for local communities or host countries.

The rising number of water shortages, contaminations, floods and human dislocation and suffering resulting from water problems are not expected to abate. That means there's risk both in water availability and stability of communities.

None of this is particularly new news to the U.N., however. Work on drafting the guidance began back to 2010, when the U.N. General Assembly voted to recognize a Human Right to Water and Sanitation (and was then included in the U.N. Guiding Principles on Business and Human Rights in 2011). Large multinational water users — Coca-Cola, PepsiCo International, Nestle and about 120 others — also helped draft the report. The Pacific Institute and Shift drafted the specific language and implementation steps to help businesses.

Bracing for turmoil

So what does this all mean for individual companies?  

Here's the process that the U.N. Guidance for Companies suggests:

Elements for respecting the human rights to water, in practice.

This process is designed to “help companies translate their responsibility to respect the human rights to water and sanitation into their existing water management policies, practices, and company cultures,” the report foreward states.

The first suggestion is to start by examining water use practices throughout operations, as most environmental impacts tend to be found in increasingly complex global supply chains. The next step is defining what a commitment to human rights to water and sanitation would look like to business operations.

That responsibility starts with an understanding that “human rights aim at securing the basic dignity and equality of all people.” In terms of water and sanitation, respect for rights to safe, clean, accessible water and sanitation facilities should be embedded throughout a company’s operations and dealings with stakeholders.

“Water and sanitation facilities must be present in order to meet peoples’ basic needs," the guidelines state. "This means a supply of water that is sufficient and continuous for personal and domestic uses, which ordinarily include drinking and food preparation, personal hygiene, washing of clothes, cleaning and other aspects of domestic hygiene, as well as facilities and services for the safe disposal of human excreta."

Facilities to access clean water and sanitation also should be near enough to prevent hardship, and the water has to be safe. The guidance also suggests engaging staff and business partners in the process of revamping water systems, including supply chain partners, so that all parties have an understanding and a stake in the commitment.

In the event those systems should fail, the guidance also calls for creating a mechanism to deal with grievances and a process to remediate poor water access or quality.

To help track performance and facilitate positive relationships with nearby communities, clear communication to staff and other stakeholders also should be prioritized. 

Read more about business risks posed by water scarcity in the new State of Green Business report. Imagine the challenge of doing business in a "water-less" world at GreenBiz Forum 15.

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