Why should companies invest in their water footprint and management?
Like every year, Water Week is an opportunity to reflect on water challenges and call companies to act to protect their businesses and their local communities.
The role and use of water are omnipresent in the life cycle of everything we need, use, and produce as humans. In certain areas, it has become one of the most contested resources. Unlike tackling the carbon emission challenge that the world is facing, the water crisis is a global challenge that needs to be tackled locally. Replenishing the groundwater levels in Flanders will not have an impact on the groundwater levels in Morocco. However, climate change continuously proves to be one of the global water system's greatest threats. We need to understand that water and emissions are challenges that need to be tackled in unison and have a significant and complex impact on one another.
What are the challenges facing water resources?
The water challenges we face have implications on multiple levels. Water-related risks as seen through the public’s eyes are generally limited to physical risks like droughts and floods. However, water-related risks can have considerable implications on economic and political stability.
Worldwide, 70% of water use is accounted for food production, of which 30% is lost or wasted. A Morgan Stanley research states that the gap between global demand and supplies of fresh water will reach 40% by 2030. Putting this in an economic perspective, the World Bank estimates that water scarcity can negatively affect the GDP growth of countries at risk for water scarcity by 11.5% by 2050. Combining these economic implications with the humanitarian risks related to clean water's unavailability easily translates into political tension.
This is the case for the conflict over the construction of the Grand Ethiopian Renaissance Dam (GERD) on the Blue Nile, which is the main tributary of the Nile River. The reservoir feeding the hydroelectric power station of the GERD is large enough to store the full annual Blue Nile flow, which worries the downstream countries of Egypt and Sudan which are 90% dependent on the Nile River for providing sweet water. The GERD allows Ethiopia to exert control over the flow of the so-called vein of life in Egypt and Sudan, which results in political instability in this region. The GERD case teaches us that benefitting from renewable energies can create conflicts with dependencies on water sources.
At the European level:
Conflicts like the GERD project may seem like a faraway show for inhabitants of the European continent, but the impacts of climate change have resulted in water scarcity no longer being considered a rare event in Europe. The 2021 European Environment Agency (EEA) report mentions that 30% of Europeans are affected by water stress per year. Climate change is accentuating the frequency and intensity of droughts and heat waves in several countries, adding to the pressure on water availability stemming from agriculture, manufacturing, and tourism. The EU has adopted a number of directives to address the water issue, including the EU Water Framework Directive (WFD), the EU Floods Directive, the Urban Waste Water Treatment Directive (UWWTD), and the Drinking Water Directive, among many others. However, the EEA sees that the implementation and effectiveness of these policies need to be improved.
The drought-stricken river Po in Italy revealed economic and political implications closer to home. The valley of the river Po, which produces around 40% of the country's food, including wheat and rice, has barely seen any rainfall for months. According to the confederation of national agricultural producers, the estimated economic impact for the farmers dependent on the river is estimated to be more than 3 billion euros. Other dramatic economic impacts of the 2022 drought in Europe include the disruption of nuclear power plants in France due to the river Loire drying up and the shrinking of the Rhine River, threatening a stand-still of shipping operations.
In 2019, a report by the World Resources Institute (WRI) ranked Belgium 23rd out of 164 countries in water scarcity, which is the third highest in Europe. Overconsumption of water is a serious problem in Belgium too. Marc Van Molle, a professor in physical geography at the Vrije Universiteit Brussels (VUB), told the Brussels times that Belgium depends on other countries for more than two-thirds of its daily water consumption. This proves that a country’s historically rainy weather is not a sufficient indicator of its water abundance, and people can still use three times more resources than the country’s capacity.
One of the programs instigated by governmental organizations in Belgium is the Flemish Blue Deal, which states that water is a scarce and precious resource and that does not yet translate into our daily use. That is why the Blue Deal appeals to everyone: the ordinary citizen, cities and towns, industry, and agriculture. The Blue Deal acknowledges that Flanders has been one of the worst pupils in class in terms of water management and attempts to retrieve the naturally spongy soil texture by instigating legislation on water management. As stated, this Blue Deal also applies to companies. Belgium imports two-thirds of its daily water consumption, which means that companies’ water supply indirectly depends on other countries. Together with the risk of shutdowns during droughts, these are potential implications to be aware of as they can affect companies’ business continuity.
What can your company do?
These risks emphasize the importance of anticipating future crises before they take place by optimizing water use as much as possible and diversifying water sources. Prioritizing water within the value chain of companies and investing in mitigation strategies for water-related risks can benefit businesses on multiple levels. The global water challenge creates the opportunity for a collaborative approach to improved water management. By committing to water, businesses have one big opportunity ahead of them: creating a collaboration with neighboring businesses, towns, municipalities, and nature organizations. Inspirational projects for cross-sectoral efficient use of water are showcased on the Proeftuinen Droogte website.
The global focus on addressing greenhouse gas emissions and the skyrocketing energy prices have often pushed addressing water issues further down the priority list of companies. However, these topics should not be treated independently as one can influence the other, as water pumping, treatment and distribution use up to 8% of the global energy generation. Reduction of water consumption directly results in the reduction of energy consumption and related emissions of treating this water before consumption in the value chain. Furthermore, by investing in shifting the treatment of water from water distributors to the company site, the business continuity risks related to dependency on a third party for water are reduced.
As stated at the beginning of this article, the global water challenge we face is to be tackled locally. However, as improved water management plays a massive role in climate change mitigation by freeing up water resources to feed natural ecosystems (e.g., Blue-Green cities creating a cooling effect and wetlands acting as significant carbon sinks), it must be understood that tackling the local water challenges will collectively contribute to the mitigation of climate change and its related implications.
How can your business reduce its water footprint and improve its water management? Do not hesitate to contact our expert, Suzanne Reinartz for more insights and guidance in your water management.