Water Management Strategies to Mitigate and Prevent ESG Risks
Sustainable Water Optimisation guarantees global water quality and water security which are the foundations of Healthy economies and Business Eco-systems.
Water quality strengthens financial and social inclusion, coordinates supply and value chains, and has a significant impact on the Gross Domestic Product (GDP).
A Secure Water supply is necessary for commercial, agricultural, and domestic use.
An efficient Water Management Strategy is a global priority for Resource Accessibility and ESG performance.
Global Water Consumption Data
By 2025, 1.8 billion people will face water scarcity.
In many parts of the world, existing water supplies are insufficient to meet all of the urban, industrial, agricultural, and environmental demands.
Water Scarcity impacts many communities, their families and businesses that have limited access to potable and clean water which remains a major challenge, affecting the Global Economy.
What’s a Company’s Water Footprint?
What’s the role of Water Footprint in Supply Chain Management?
Water footprint is an important metric used in supply chain management to understand and manage water-related risks associated with a product’s production, transportation, and distribution. The water footprint of a product refers to the total volume of freshwater used to produce it, including the water used in the production of raw materials, as well as in the manufacturing and transportation processes.
By calculating the water footprint of products, companies can identify areas where water use can be reduced or optimized, leading to more sustainable production and lower costs. This helps companies to manage their water resources more efficiently and effectively, reducing the risk of water scarcity or pollution, and enhancing their reputation as responsible corporate citizens.
In addition, water footprint analysis can help companies to identify suppliers and regions that are particularly water-stressed or water-scarce, and develop strategies to address these challenges, such as implementing more efficient water use practices, using alternative water sources, or sourcing from suppliers in less water-stressed regions. Ultimately, integrating water footprint analysis into supply chain management can help companies to reduce their environmental impact, improve operational efficiency, and enhance their overall sustainability performance.
How to identify and manage water-related business risks
To identify and manage water-related business risks, companies can take several steps. The first step is to conduct a water risk assessment to identify potential risks and opportunities related to water availability, quality, and regulatory compliance. This assessment can help a company to understand how its operations and supply chain may be impacted by water-related risks and prioritise actions to prevent and address those risks.
Once risks have been identified, companies can develop a water stewardship strategy that includes setting goals, implementing water conservation and efficiency measures, engaging with stakeholders such as local communities, NGOs, and government agencies (This engagement can help build relationships and trust, identify new investment opportunities, and address potential conflicts related to water use), and monitoring and reporting on progress. By taking a proactive approach to managing water-related risks, companies can improve their operational resilience, reduce costs, and enhance their reputation among stakeholders.
How to Conduct a Corporate Water Footprint Assessment
Corporate Water Stewardship is a priority to mitigate risks and advance sustainable Water Management strategies.
Corporate water use should be managed responsibly, using scientifically-sound strategies to protect and conserve freshwater resources, while also taking into account community needs, environmental sustainability, and economic benefits.
The Role of Water Accounting in Advancing Sustainable Water Management
Corporate water accounting is a critical component of an ESG risk assessment. Companies must be able to measure and account for their water use and wastewater discharges to become more responsible water stewards. Comprehensive water accounting includes a variety of different components and data points, which all work together to better understand and reduce water-related risks.
The key components are:
External Water Resource Context and Data: The general environmental conditions of the watershed, ecosystem, community, government, and economy in which businesses exist can affect its global competitiveness.
Corporate Water Accounting: This involves the internal analysis of the company’s water consumption. It entails the measurement of water use and discharge. Accounting lets companies know how much water they consume, where it comes from, and where it’s going. It also provides insights into how to optimise their water management.
Public Disclosure and Stakeholder Feedback: This is the external feedback, it’s about how businesses use their corporate water impact in the discussion or among communities, investors, and stakeholders to get feedback on what constituents want and make business improvements accordingly.
Corporate Water Management and Stewardship: This is the corporate response. It reduces the risks and the impacts, by giving more efficient corporate management responses.
Stakeholder Water Practices and Strategies: To sustain water management, all the players involved have to take action; sustainability of water is not only the responsibility of corporations, but also an issue that communities, policymakers, and other stakeholders need to get involved in.
Sustainable Water Management: This is the objective of the whole system. It involves implementing responsible water practices, managers, and companies that do better than harm the environment.
The most efficient and innovative Water Tech solutions
There are a growing number of innovative water management technological solutions. Governments are implementing policies that support the adoption and dissemination of new water technologies, enabling water optimisation and water accessibility. More diverse actors, investors, policymakers, and companies are collaborating from inside and outside the water space to create a water-secure future. According to Bluefield Research investment opportunities in water technologies will double up to $55.2 billion in 2030, from $25.9 billion in 2021.
Waterplan is a Climate water platform that helps companies conduct their water plan to quantify their water risks.
Indrawater is a leader in the water waste treatment industry. INDRA offers a system that can handle a wide range of pollutants from typical sewage wastewater (STPs – Sewage Treatment Plants) to highly toxic industrial effluents (ETPs – Effluent Treatment Plants).
UpLink, the open innovation platform of the World Economic Forum, is building an innovation ecosystem that sources and scales water solutions worldwide.
The top 10 innovators from the UpLink Global Freshwater Challenge will share CHF 1.75 million and gain connections to leading experts and investors to accelerate their solutions. These innovators are developing efficient and innovative water technologies to improve water quality and water waste management.
Primo is a leading pure-play water solutions provider in North America, Europe and Israel focused on healthy and sustainable hydration solutions, specialised in water stewardship.
Investment Opportunities in Water Stocks
To invest in water stocks, you can purchase individual stocks or invest in a mutual fund or ETF that has significant exposure to water-related industries such as irrigation, utilities, and water treatment. These investments provide a great opportunity for exposure to the water industry.
Kenya Case Study: Solutions to Water Scarcity
Prospects are important in determining the appropriate solutions for solving water scarcity concerns in Kenya.
Different techniques have been employed to solve the issues of water scarcity. Water recycling and reuse are two techniques that have been recognised as adaptive solutions to water scarcity. They represent the concept of a circular economy. Adopting advanced technological solutions and practices is a priority for water management, it includes improved usage by users reducing water loss, supporting the sustainability of water resources, and increasing their economic profitability.
The Poverty Reduction Strategy Paper of the Government of Kenya (2008) provides a short-term strategy for recovery which includes the restoration of Kenya’s water infrastructure and the supplying of water to Kenyan people. It highlights a variety of projects that includes the securing of wildlife protection in the five major water towers – Mau Escarpment, Mt. Kenya, Aberdare Ranges, Cherangany Hills, and Mt. Elgon. Some of the most promising plans and projects include: –
Restoration and protection of indigenous forests in the 5 water towers – The plan aims to promote sustainable management of water catchment areas – Mau Escarpment, Mt. Kenya, Aberdare Ranges, Cherangany Hills, and Mt. Elgon in Kenya. This is in line with the Constitution of Kenya 2010, Article 69 (1a), where the state has committed itself to ensuring sustainable exploitation, utilization, management, and conservation of the environment and natural resources, including the water catchment areas. Also, to ensure a 10% land cover by forests.
Water storage and harvesting – The plan aims to the development of two multi-purpose dams having a storage capacity of nearly 2.4 billion cubic meters along River Nzoia and River Nyando. Construction of medium-sized dams, 24 of them having a capacity of 2 billion cubic meters to supply water for domestic, livestock, and irrigation in the arid and semi-arid regions – Turkana, Wajir, Narok, etc., in the country.
National Water and Supply Sanitation – The project intends to expand the Mzima pipeline in meeting the wants of the coastal towns and cover the urban water supply and sanitation in towns within Nairobi, Mombasa, Nakuru, Kisumu, and Kisii with other 26 medium seized towns with the capability to support manufacturing and tourism activities in Kenya.
Water Conservation Strategies in Kenya
As the population of Kenya increases, so does the need for water accessibility water use and water management. Conservation strategies have been put in place with some of the intuitive approaches being:
Limiting consumption – Using policies, economics, and technology helps regulate the demand. Policies might include restrictions and bans on certain types of water use, standards for fixtures and appliances, enforcement on recycling, etc. Economic measures like setting prices for water consumption usually make people more diligent about their water-related activities. Technological advances may help use less water for the same function (water-efficient washers, toilets, etc.).
Eliminating losses – Using regulation and metering, water-sensitive design, smart technology, and leak identification systems are all key factors of this strategy. Smart controllers for water use are also a type of conservation technology.
Preventing water pollution – Less pollution reduces the need for water recycling and creates more opportunities to conserve natural water supplies. Government regulations need to be aligned with wastewater plants to reduce the discharge of their effluent into rivers, oceans, and other bodies of water. There are also many technologies available to treat sewage that comes from residential homes and industrial facilities. Wastewater management has also been recognised as a solution to water scarcity in the slums of Nairobi including Mathare by reducing disposal into the rivers. Controlling water leakages has also been identified as a solution.
According to the Constitution of Kenya, 2010, Article 43 (1) (d), every person has the right to clean and safe water in adequate quantities; Article 56 (e) emphasizes the need for minorities and marginalised groups to have reasonable access to water, health services, and infrastructure.
The government acknowledges that adequate water is a necessity for attaining the much-anticipated Vision 2030, which is Kenya’s interminable development blueprint.
In African Union Agenda 2063, the union promotes the need to have environmentally sustainable and climate resilient economies with a key focus on natural resources management and water security with a guide from the UN’s SDGs no. 6.
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