Most businesses are spending their time focusing on reducing carbon in the race to Net Zero. This is a good start but focuses only on the obvious source of carbon – emissions – and distracts attention from the elephant in the room: water and its associated embedded carbon.
The United Nations found that the world is set to face a water deficit of up to 40 per cent by 2030 – a stark number that would have enormous ramifications for lives and livelihoods around the world, especially in the global South.
Water has a symbiotic relationship with carbon – improving one will help the other, and vice versa. We call this the water-carbon nexus. Optimising water use could deliver a quarter of the 7.6 per cent annual carbon emissions drop needed to reach the 2030 goals. That’s why business leaders, governments, and every organisation worth its salt should be extending their environmental commitments to focus firmly on water, before it’s too late.
To make this course correction, there are two key steps you should make:
1. Understand your water impact
Looking at how water is used across the value chain is the first step for any business wanting to reduce its carbon emissions and improve its use of water. Our research on this topic, ‘The Big Drop: The untapped potential of water on decarbonisation,’ found that over a third of businesses find it difficult to target where and how specifically to reduce their water usage, while almost half say they have to make trade-offs with other sustainability targets.
In today’s industrial landscape, we use enormous amounts of water to source, create, package, ship, and stock products – in just three months, for example, a semiconductor fabrication plant will consume 927 million gallons of fresh water. Without an ample supply of fresh water, we’d experience enormous supply chain issues across every industry.
Moreover, the sourcing, processing, moving, returning, and treating of water has a knock-on effect: carbon emissions. It takes significant energy to process the water we’re accustomed to using every day.
Fixing this requires a step back – not just looking at what’s already happening in pockets and siloes – but taking a top-down view of where water is used throughout a business’ entire value chain. Businesses need to take a less myopic, more encompassing view of sustainability and decarbonisation and assess how to be more innovative and efficient with water use and put the steps in place that will also reduce its associated carbon emissions; separating grey (sinks, dishwashers) from black (sewage) water for example and reusing grey water without treating it to the same levels as sewage will save inordinate amounts of energy, chemicals and water.
But one of the hardest parts of fixing the water-carbon nexus is understanding and balancing the trade-offs. Solving one half of the bargain isn’t always the right move for the other. Take renewable energy, for example. We all know that moving towards renewable energy generation is much better for people and the planet, yet what’s often not considered is that green energy sources like hydrogen will increase water usage significantly. Therefore it’s important to understand that the answer isn’t simply ‘let’s all use less water full stop’ – the answer is much more nuanced. We need both more water and; we need to use and reuse the water we have more efficiently – so integrated innovation in between water and carbon is key.
2. Investing in new water recovery methods
Few businesses have begun to explore new ways to access water throughout their value chain. As water demand increases, thanks to urbanisation, population growth, and climate-related natural disasters, so too will carbon emissions. Businesses need to start accessing water in new ways – and they have the means to do so.
There is a growing cohort of companies, especially start-ups, focusing on innovating water – whether by converting wastewater into reusable water, providing new water sources by making greywater potable, or desalinating seawater through renewable energy such as solar power.
Nobody is asking manufacturing or pharmaceutical businesses to become desalination innovators. In fact, the best move for all parties is to partner with companies already doing the work and help them scale – incorporating their technologies into your innovation roadmap, in a way that will also help achieve ambitious ESG targets.
Partnerships will be critical, both for reducing carbon emissions and improving water usage. The outdated approach of businesses all competing for the same resources must come to an end. Instead, working alongside local businesses to strategically use and re-use the same water could reduce water usage enormously and create cost-savings and carbon reductions, too.
To make this transition a reality, businesses need to understand their environmental impact, and work together to reduce it for everyone’s benefit – whether with local competition, with start-ups who can provide the innovation they need, or with charities and organisations helping the communities suffering the most from water scarcity.
Making the business case for sustainability
Consumers want to buy from brands with sustainability at their core, and organisations that can demonstrate that they’re doing the right thing, such as reducing water consumption and replenishing water supplies when possible, will grow faster and command higher margins.
Danone is setting a great example for other industrial leaders, making significant strides in water stewardship. The company takes a three-pronged approach to water conservation: preserving water through regenerative agriculture, driving circularity within its factories, and providing safe drinking water to vulnerable communities. Through all of these efforts, Danone remains the number one source of fresh dairy and plant based products worldwide, capturing 54 per cent of sales within the category. Danone makes it clear that by doing good, companies can do well, too.
By committing to more sustainable practices, organisations are securing future supplies to support their operations long-term, while improving the state of the planet.
A symbiotic focus on water and carbon will create the next generation of businesses – businesses that can deliver profit while prioritising people and planet.