World Economic Forum: 3 actions business leaders can take to help solve our water crisis
News Source: World Economic Forum
- Today almost 25% of the world’s population face looming water crises.
- The interlinked nature of water management means solutions must involve multiple stakeholders.
- Here is a guide to partnership actions corporate leaders can take to help mitigate this crisis.
With less than 1% of the world’s freshwater readily available for human consumption and demand expected to increase by 40% by 2030, effective governance and management of freshwater supplies is one of the most fundamental public goods challenges of our time.
Yet recent headlines about devastating wildfires and water shortages facing Australia, deadly flooding in Jakarta, and Chennai joining Cape Town and other cities in the struggle to avoid ‘Day Zero’ serve as just the latest reminders of how difficult a task this is becoming.
Already, nearly 25% of the world’s population face looming water crises, and by 2025 the figure is predicted to surpass 60%. In addition to the impacts on human health and ecosystems, water risks are also increasingly material for economic growth and business. The World Bank projects that water scarcity could cost some regions up to 6% of their GDP by 2050. In 2018 alone, companies reported more than $38 billion in financial losses due to water challenges.
The need for aligned action
As the frequency, severity and complexity of water risks increase, exacerbated by climate change, more ambitious and innovative approaches will be needed.
Governments at the national, state and municipal levels must be ultimately accountable for ensuring access to a clean, affordable and reliable supply of water. Yet the interlinked nature of water management and governance problems – such as protecting natural ecosystems, ensuring security of supply for industries and cities or mitigating the impacts of natural disasters – makes it hard to ascribe responsibility to any one governmental ministry or department. Such wicked challenges demand agile, inclusive public-private partnerships, through which different sectors and actors can leverage their respective capabilities and resources in response to rapidly evolving and complex scenarios.
Civil society organizations are vital in supporting independent research, local implementation and stakeholder engagement activities. Local civic platforms are especially needed in situations where vulnerable populations or excluded groups lack sufficient voice or resources to assert their rights.
The corporate sector also has an increasingly vital leadership role to play, particularly companies that are major users, distributors or managers of water supplies. Equally, companies in enabling sectors such as information technology can leverage their skills and investments to scale digital solutions, while financial institutions can increase investments, insurance and banking solutions for improving water use in cities, companies and households.
A framework for business leadership
There are three sets of actions any large company should consider as part of its commitment to help tackle the water crisis:
Water management: Corporate water strategies should ensure compliance, manage risks and improve water efficiency, waste management and replenishment in the company’s own business operations and value chain, with the dual goals of identifying and mitigating negative impacts and improving operational performance and excellence. In a growing number of industries and locations, there is untapped potential for harnessing new technologies and business model or financing innovations to move from ‘doing no harm’ to proactively delivering profitable and scalable water solutions.
Water stewardship: Leading companies are going a step further by committing to more integrated approaches that go beyond their own operations to work with others on watershed management and valuing water. This calls for the ability to effectively map and engage with diverse stakeholders, usually including competitors. It requires complex data collection and analysis on the economic value of water, including water use trade-offs, understanding the water-food-energy nexus, political economy and demographic dynamics. And to be effective, it calls for joint investments and collective water governance and accountability mechanisms.
Water advocacy: Some corporate leaders are also becoming outspoken champions for water sustainability at local, national and global levels. They invest in research, innovation and technology beyond their own immediate operational needs. And they support efforts to increase public awareness and education on the urgency of the water crisis, alongside joint advocacy for good water governance and appropriate public policy reforms.
CEO and board leadership are essential for setting strategies and incentives to achieve impact. Such leadership requires individual corporate action and responsibility, focused on activities that the business has the most direct control over and where the water risks are most material to the company and its stakeholders. It also requires collective action and collaboration with others in business, government and civil society to address the more complex, systems-level challenges that no one company or actor can tackle alone.
Various World Economic Forum partners are already demonstrating such leadership through collaborations such as:
· The 2030 Water Resources Group, a public-private platform led by the World Bank that consists of more than 700 actors working across sectors in 14 water-scarce countries to shrink the supply-demand gap.
· The 50L Home coalition,: an emerging effort to drive responsible domestic urban water consumption in water-stressed cities through innovations in technology, infrastructure, policy and regulation – so using 50 litres a day feels like 500.
· The Dutch-led Valuing Water Initiative, which includes governments, businesses, investors and NGOs working to inspire systems leadership and behaviour change through case studies in different value chains and sectors.
These are just three of a growing number of initiatives where individual business leaders are working together, as well as with policy-makers and civic leaders, to tackle the water crisis. The UN’s CEO Water Mandate and the World Business Council for Sustainable Development are two other leadership examples. In addition, a growing number of industry-wide platforms are taking action, such as the Consumer Goods Forum and the International Council on Mining and Metals.
Many of the corporate leadership qualities discussed above are reflected in the Davos 2020 Manifesto. This highlights a new era of opportunity for companies to work alongside all stakeholders to advance policies and practices that strengthen the long-term prosperity of the company while also managing shared risks and creating shared value for others. Scaling such approaches—not just at some point in the future but immediately and urgently–will be a defining factor in our ability to meet the Sustainable Development Goals. Absent an IPCC or COP equivalent for water, it will also be necessary to find ways to galvanize this leadership transformation. For example, a G20-led CEO water security summit would offer a prime opportunity for businesses, governments and leading technology experts to accelerate solutions to avoid future ‘day zeros’.