Water vs. climate: How to prioritize sustainability risk
For all the progress on climate change still left to be desired, the issue has managed to evolve into something of a poster child for corporate sustainability efforts.
Sure, sustainability strategies progressively have integrated a wider range of related issues — deforestation, air pollution, waste — and water in particular is starting to attract some much-needed attention. The problem: There’s a long way left to go, and not much time to adjust course when it comes to impending shortages.
The impacts of water scarcity already are starting to chip away at profit margins and look likely to wreak more havoc as we continue to increase water use. Water crises already top the World Economic Forum’s Global Risk report (see WEF Risks-Trends Interconnections Map).
While interconnected climate and water issues both provide big opportunities for savvy businesses to shift strategies in a way that bolsters both sustainability efforts and the bottom line, the reality is that companies often must evaluate the benefits of tackling disparate environmental risks.
So, when making a decision on where to invest your environmental bucks, where should businesses concentrate their efforts — on climate change or on water?
Some companies already have experimented with a water footprint assessment or a risk assessment. Those working for large corporations most likely have defined water-reduction commitments in your CSR report.
The “but” you heard coming is just that: Collectively we still must do much more to run resilient and profitable businesses.
Asking the right questions on resource allocation
One case study in this realm comes from office furniture manufacturer Steelcase and sustainability consultancy Quantis.
The conversation started with a few relatively straightforward questions: How can a global company most efficiently invest resources in environmental stewardship? Is climate change still the top priority, or should budget allocation also cover water issues?
Next came an advanced life cycle assessment to measure the environmental impact of climate change and water resources scarcity on ecosystems and human health. The purpose was to explore the nature of both climate change and water, which have very different impacts when a chronological perspective is considered, as the infographic below shows:
A Steelcase lounge-seating product was used as the case study, because different component materials — wool, metals, plastics — provided a good example of an industrial product.
With this detailed analysis complete, it then becomes possible to evaluate the more macro-level implications of each issue — and what that means for doing business day in and day out.
Water is urgent…
Simply put, the water consumed to produce a good has an immediate impact on water resources. That means now.
If water consumption happens in specific locations where the resource is already scarce due to socio-economic realities or the over-use of resources, then it might be a short-term issue. There is a risk of permanent depletion from areas where water is abstracted, although most water used on Earth is renewable within a few years.
Some companies, such as food giant Nestlé, have had their water versus climate a-ha moment. It’s no surprise when we consider that 70 percent to 80 percent of the water consumed on Earth is used for food production.
For Nestlé, it’s about staying in business, being resilient. Our study also concluded that water use is a direct, immediate threat to the environment and to business.
… but climate change remains the overall, long-term priority
When looking at the environmental and social impacts of climate change over a long period of time, our results show that climate change has a much greater impact than water.
Over a long period of time, greenhouse gases emitted by the production of each chair have an environmental impact a hundred times greater than water-related impacts. The ratio is 100:1 for our chair.
Part of the explanation is that greenhouse gases emitted in the production process remains in the atmosphere for up to 500 years, potentially emitting heat the entire time. The effect during the first year of GHG emission adds up with the second year, third year and so on.
More important, climate change also negatively will affect water resources worldwide in the long term (an effect taken into account in the analysis for climate change).
Obviously, the type of product studied influences the results; however, based on our expertise and experience with diverse consumer products, if we are not talking about a product linked to irrigated crops, the conclusions presented here might be valid for any manufactured product. The point where climate change becomes a bigger impact than water impacts might change in particular depending on the product and its production location influencing the extent of water-related impacts.
Measuring costs and benefits
More detailed results of the analysis were outlined in a Steelcase-Quantis White Paper.
One key takeaway is that the science of sustainability is in continuous evolution. Every day, we learn more about our resources, how to measure them and how to protect them.
The methodologies used in this study, while science-based, are exploratory and will evolve towards more precision in the future. Nevertheless, these metrics can help businesses start answering some questions, begin reviewing the allocation of strained budgets and urge businesses to make some decisions about priorities for a resilient future — in year one and from 10 or even 100 years out.
What’s important is to start measuring one step at a time — whether that be water, carbon or land use — in order to manage and plan for a sustainable future. What’s your next step?
Here are four central concepts to ponder during your next sustainability strategy meeting:
- Consider how environmental impact happens over time. While a water footprint has a direct impact on our planet and represents a direct risk, climate change is only affecting us over time; for example, what we experience now is the direct result of the past 100 years of GHGs emissions. Over the long term, climate change will have a much greater impact than water scarcity; although for the short term, water scarcity is a much higher risk. This is reinforced by the fact that the past GHGs emissions resulted in a change of climate affecting the global water cycle and water availability.
- Use LCA metrics to prioritize and complement your materiality assessment. Companies tend to use materiality assessments to prioritize environmental issues, which is mostly based on stakeholders’ perception. Obtaining a measure of the environmental issues, or going beyond perception, is obviously an important input to the prioritization process. Life Cycle Assessment is an efficient quantitative process that will provide science-based metrics of your environmental performance that will support your strategy.
- Plan to include other environmental issues. Although companies recently have focused on carbon and water (which is a great start), other environmental issues just might be of even greater importance. For example, in our case study we explored 10 additional environmental impacts and discovered that land occupation and particulate matter emissions were of greater importance than water and even climate change (causing more impact on human health and ecosystems).
- Consider water pollution as being a much more important issue than water use. The Steelcase study showed us that water pollution is a much greater issue over the life cycle of an industrial product than water consumption. When thinking about water, people tend to think only in term of use of availability, rather than pollution. But water pollution is probably an issue as important as water supply worldwide.