The recognition that a company’s long-term financial stability is tied to environmental sustainability is driving a paradigm shift in the way businesses operate. Water is a growing concern, with businesses around the world realizing they face diverse and complex water-related risks, in tandem with many other threats exacerbated or caused by climate change.
Water crises are already forcing businesses to change geography, strategies and priorities, and business leaders are increasingly aware of the need to improve the forecasting of potential water-related risks. This is a subject that is impossible to ignore, ecologically and economically.
From a purely pragmatic point of view, acting immediately, rather than waiting to fix problems after the fact, makes financial sense. According to a 2021 report by CDP, a non-profit organization that operates the global environmental disclosure platform, “the cost of water-related risks to businesses could be more than five times the cost of action taken now to deal with these risks.
Businesses facing water crises are assessing the cost of past inaction and learning from their mistakes. Broadly speaking, business leaders seek to understand how to better prepare for and mitigate water-related risks, adapt to changing scenarios, reduce pollution, reduce consumption, and play a role in conservation water resources.
Measuring what matters to ensure water safety for a single facility or an entire industry requires bringing together multiple data points and making sense of the data through an environmental and financial lens. By doing so, a company can not only take steps to ensure its water safety, but also to fulfill its ecological commitment and its responsibilities to the community.
Water is a resource shared and used by almost every sector, and we are seeing innovative solutions being adopted across a wide variety of industries.
Food and beverage producers, for example, are among the biggest consumers of water. In this sector, large producers are drastically reducing their water consumption by developing much more efficient irrigation methods or by rationalizing production methods to increase the efficiency of water use, while simultaneously reducing loads of polluting discharges.
To give a good example, in Southern California, an extremely water-stressed region, farmers grow about one million acres of alfalfa. Growing alfalfa is water intensive, as the crop is fed using a technique called flood irrigation, where a berm is built around the field and the area is then flooded. This method is incredibly wasteful because a lot of the water evaporates. To solve this problem, many farmers are now switching to sprinkler or drip irrigation, which are much more efficient techniques.
Some food and beverage companies also play a stewardship role in working to improve watershed health and access to safe drinking water. Starbucks, for example, invests in initiatives that provide clean water, sanitation and hygiene to underserved communities, and provides support to improve climate resilience and long-term water security. in areas with very high risk basins located in Colombia, Brazil, China, Mexico and the United States.
The IT sector is also making great strides. Great strides have been made in recycling rare earth elements from electronic waste, for example. Rare earth materials are an essential component of everyday technology essentials such as cell phones, televisions and monitors, computers and electric vehicles. Their supply is extremely limited and the extraction of these materials involves water-intensive extraction methods, hence the importance of improving recycling.
Tech companies are partnering with cities to build water reuse facilities and are developing data centers and chip factories – traditionally requiring large amounts of water – that use less water or source water from from recycled sources, instead of tapping into fresh water.
In water-scarce Arizona, Intel has funded more than 15 water restoration projects that it says are on track to restore about one billion gallons each year. The company says it has achieved net positive water at its manufacturing plants in the United States, India and Costa Rica, capturing and returning more fresh water to local communities than it withdraws.
Meanwhile, a spokesman for Taiwan Semiconductor Manufacturing Co.’s new plant in Phoenix, Arizona – which is expected to become one of the city’s biggest water users – told a local newspaper that ” approximately 65% of the water used in the Arizona plant will come from TSMC’s in-house water reclamation system, which helps reduce the city’s water consumption.”
For businesses today, reducing water risk and increasing water efficiency go hand in hand, because the more efficient a process becomes in using water, the more it helps to reduce risk. The main objective of companies is to maximize their triple bottom line – to achieve results in terms of revenue, as well as in terms of social and environmental impact. Ultimately, businesses, communities and our planet all benefit.
Jay Famiglietti is executive director of the Global Institute for Water Security.
Jose Ignacio S. Galindo is CEO and co-founder of Waterplan.