Anheuser-Busch InBev puts a new price on water

Liquid Assets

Anheuser-Busch InBev puts a new price on water

Budwesier image by Jhong Dizon via Flickr

We need to rethink how we value water in order to move away from treating water as a throwaway commodity. It won't be possible to meet the increasing need to produce food, energy and products as well as the needs of people and ecosystems unless we embrace water stewardship.

From a business perspective, if we don't value water, we run the risk of business disruption and stranded assets. But some companies are taking action to put a new value on water, and Anheuser-Busch InBev is among those on the frontlines of this paradigm shift.

At World Water Week, held in Stockholm in September, the World Business Council for Sustainable Development (WBCSD) released its report "Water valuation: Building the business case."

"[The report] aims to demonstrate the business case for companies to engage in water valuation and is supported by a review of 21 business case studies that illustrate why and how different companies have carried out water valuation," the WBCSD said. This publication is part of the WBCSD's "Vision 2050," which mapped out "a pathway leading to a world where 9 billion people live well, within the limits of the planet, by 2050," according to the WBCSD.

The report provides valuable case studies to guide company programs for valuing water -- essentially internalizing an externality.

One mechanism for valuing water is payments for ecosystem services (PES). PES provide incentives to landowners so that they manage their land in a way that provides some sort of ecological service.

There are numerous examples of companies engaged in PES programs with NGOs. Ambev, an Anheuser-Busch InBev company, launched its CYAN Movement program in Brazil's Corumbá-Paranoá Basin in 2010, Hugh "Bert" Share, AB InBev's senior global director, told me at World Water Week.

Ambev developed the program as an ongoing collective action initiative that promotes the responsible use of water in high-risk watersheds.

Key elements of the program, Bert said, are:

• Launching stakehoder engagement and communications campaigns on responsible water use in routine daily activities in collabordation with local communities, governments and other stakeholders.

• Working with water utilities to establish "CYAN Bank," a reward program that incentivizes consumers to lower water consumption levels at home. Almost 325 million liters of water have been saved to date through the program.

• Sponsoring preservation initiatives in water basins important for Ambev's breweries and Brazil and driving positive change in high-risk watersheds through the collective action of local stakeholders.

In 2012, the program was expanded in the Jaguariúna region of Brazil with the goal to conserve the basin that supplies a portion of the water to the greater São Paulo region and the company's beverage facility in Jaguariúna. "The initial phase of the work involves creating a group of local partners and identifying the most critical areas that need restoration," Bert said.

AB InBev is supporting the social, environmental and economic research to create the right incentives for private landowners to protect critical natural areas that produce water resources.

PES programs acknowledge that water is a shared resource, it has value well beyond its price and frameworks and economic incentives can be used to protect it.

In my view, creative collective action programs such as PES will address water scarcity risks and the water needs of agriculture, energy, ecosystems and people going forward. Business as usual projections need not be the case if we embrace innovative partnerships and technologies.

Budwesier image by Jhong Dizon via Flickr