Industrial transformation in a time of water scarcity

Acute water shortages will change strategy, business operations; depletion of global water resources is more rapid, severe, and complex than anticipated.

WASHINGTON, D.C. – Population growth, urban development, farm production, and climate change is increasing competition for fresh water and producing shortages so acute that virtually every industry in the world anticipates sweeping systemic transformation over the next decade in their strategic planning, production practices, and business models.

“These findings should sound the alarm for companies that haven’t yet established robust water strategies.”

– Chris Coulter, senior vice president at GlobeScan

That is the conclusion of a global opinion poll of more than 1,200 sustainability experts conducted and made public today by GlobeScan, an international public and stakeholder opinion research firm, and SustainAbility, a think tank and business strategy consultancy.

Jeff Erikson, senior vice president at SustainAbility, told Circle of Blue that the decisions executives make to respond to freshwater scarcity will penetrate almost every aspect of their business operations. For instance, executives who consider locating plants in China are likely to more carefully consider the consequences of rapidly melting Himalayan glaciers in the Tibetan Plateau that feed some of China’s most important rivers. In the United States, manufacturers may shift new plants from the increasingly dry Southwest back to the water-rich Great Lakes region.

“Over the last 20 years water shortage has not been a lens that has been heavily considered in plant siting,” said Erikson. “That will change.”

Poll Results

The Sustainability Survey Poll on Water was conducted in more than 80 countries. Some 1,200 influential thought leaders from companies, governments, NGOs, and academia said that multi-faceted engagement with water will be required for companies and governments to effectively manage businesses and communities. The new SustainAbility and GlobeScan survey comes six months after a Circle of Blue/GlobeScan survey of 15,000 people in 15 countries found that water scarcity and water pollution are the top environmental concerns in the world. (See Sustainability Survey Poll on Water Infographics below.)

Along with return on investment, capital requirements, and quarterly returns companies that want to stay in business will need to add expertise to their staffs to manage the new market signals in the era of water scarcity. New business practices will stress water conservation and efficiency, ecosystem protection, public education and engagement. Companies also will need to anticipate market pressure to appropriately price water.

“Our panel of experts has been very good at predicting implications for companies in the sustainability agenda,” said Chris Coulter, senior vice president at GlobeScan. “These findings should sound the alarm for companies that haven’t yet established robust water strategies. This is about literally retaining license to operate in many parts of the world.”

continued