Doing Well By Doing Good: How Corporations Can Help Save Water And The Planet
By Kevin Westerling,
@KevinOnWater
Some companies talk a good game on sustainability, but how many actually walk the walk? Protecting the environment and preserving scarce resources, especially water, is not just sound business; it’s imperative to sustain life as we know it. The companies that truly get it are often identified by having a chief sustainability officer (CSO) in place. Those figures, such as Ecolab’s Emilio Tenuta, often spearhead initiatives and join with like-minded cohorts to address climate change and its impacts, including water shortages, while creating policy and practices within their own companies to combat, rather than contribute, to the problem.
For the past 11 years, Tenuta has led Ecolab’s strategic sustainability journey and is actively involved in advancing global sustainability practices, with a significant focus on water stewardship and climate action. In recent years, he’s become a leader in environmental, social, and governance (ESG) practices and reporting. He is also chair of the board of directors of the World Environment Center, a global non-profit, non-advocacy organization, and a member of the leadership council of the Corporate Eco Forum.
I spoke with Tenuta, CSO and senior vice president at Ecolab, about the state of our global environmental crises, movements afoot to improve sustainability, and the role of corporations in affecting positive change.
How would you assess what many consider to be a global water crisis? How bad is it?
How does this correlate to climate change and what do the leading authorities (e.g., the UN) recommend for improving the situation?
Water scarcity, especially within areas that are already water-stressed, is exacerbated by climate change. This is most commonly seen through extreme drought or heatwaves like we’ve recently witnessed across the western U.S.; flooding, such as the extreme cases in Italy; and even water-quality and sanitation issues. So, it is important to understand the link between water and energy, often known as the water-energy nexus.
Water must be cooled, heated, treated, and moved in order to be fit for use, all of which requires energy. When trying to mitigate climate change, people often look at decreasing carbon emissions, electrification, or reducing waste, all of which are valid, but in the process they overlook water. By addressing water use and improving reduce, reuse, and recycle strategies, organizations can address climate change by saving energy, reducing greenhouse gas (GHG) reductions, and even saving money.
When it comes to other leading authorities on the matter, such as the International Water Association, water-related hazards account for 90% of all natural disasters. In response, there are many actions the business community can take to address the water crisis, including collective action from corporations. Other leading authorities, such as the UN, have suggested reducing pollution, halving the proportion of untreated wastewater, as well as protecting and restoring water-related ecosystems.
What can companies do now to reduce emissions, address water scarcity, and meet recommendations from the latest UN climate report?
Many companies and business leaders think that sustainability and profitability can’t co-exist, but that couldn’t be further from the truth. Ecolab’s Water for Climate program is designed to help companies meet their ambitious climate and water goals without ever having to compromise business growth. By acknowledging the water-energy nexus throughout operations, businesses can simultaneously reduce their energy use and GHG emissions. For example, in the beverage and brewing manufacturing industry, the program is designed to help reduce water use on average by 25%, energy use by 12%, and GHG emissions by 6%.
It's also worth noting that nobody can solve this crisis by themselves. The importance of working together was one of the biggest takeaways from this spring’s UN Water Conference, and companies need to consider how they can ensure collective action is part of their response to addressing climate change, especially as it relates to water. Public-private partnerships, such as the Water Resilience Coalition’s new WaterEquity Global Access Fund IV, will also have enormous ramifications.
It only takes 150 companies to have a positive impact on one-third of the world’s freshwater use. It’s up to businesses and their public sector counterparts to find each other and form these game-changing alliances.
Can you provide some detail on the WaterEquity Global Access Fund and the ramifications you referenced?
On March 16, 2023, the Water Resilience Coalition (WRC) launched the WRC Investment Portfolio and unveiled an initial supported vehicle, the WaterEquity Global Access Fund IV. The fund has already attracted nearly $140 million in investments, including five member companies — Starbucks, Ecolab, Gap Inc., Reckitt, and DuPont — who make up the corporate investors and join a public commitment from U.S. International Development Finance Corporation.
This first WaterEquity fund will help up to 5 million people in at least eight countries gain access to water, sanitation, and hygiene assets (WASH). The fund works by enabling households to gain access to microfinance loans for the purchase of WASH assets, such as household toilets and sewage treatment systems. This is innovative because it mobilizes corporate capital in a radical new way through co-investments. Not only is it able to make a needed difference in people’s lives, but it’s doing so in a way that makes the business case for sustainability by showing a positive return on investment and a positive impact.
The fund is managed by WaterEquity, which is the first asset manager exclusively focused on solving the global water and sanitation crisis, and it is just the first of many exciting innovative financing vehicles included in the WRC Investment Portfolio aimed at addressing water challenges. The entire WRC portfolio charts a pathway for long-term sustainable investments in water at a time when global stakeholders are calling for new investment strategies for water and increased investments from the private sector. Also, the WRC is still open to additional companies joining their pledge.
What was the motivation for Ecolab’s recently conducted Water, Sustainability and Climate Change survey, and what were the findings?
Ecolab conducted this survey for three main reasons. The first was to determine consumer perceptions of how companies, governments, non-governmental organizations (NGOs), and the general public are reacting to climate change. The second was to measure the impact of climate change on consumers globally, and the third was to uncover attitudes and behaviors toward water conservation. After receiving the results, we were able to glean three valuable insights:
Insight #1: The impacts of climate change are top of mind and physically present for most global consumers. Almost 80% of the total sample indicate they have been impacted by climate change, and about 60% have been without drinking water recently. Also, more than half of consumers globally signal water scarcity as a top concern, while 50% of respondents listed climate change as a top concern, outpacing personal health (45%), COVID-19 (42%), and pollution (40%).
Insight #2: Global consumers pin some responsibility for unfavorable climate change effects on companies because most organizations have not yet achieved emissions goals or demonstrated impact in the field. Four in 10 global consumers hold companies “most responsible” for causing climate change, 45% agree that companies are not doing enough to tackle climate change, and nearly 75% think companies should address climate change as a “high” or “essential” priority. Additionally, despite companies boosting their messaging on climate change, only 44% of consumers globally think CEOs care about the impact their companies have on climate change.
Insight #3: But that does not change the fact that consumers think sustainability is essential to addressing climate change. Three-quarters of consumers think it is a “high” or “essential” priority for companies to conserve water; however, only one-quarter of consumers currently think companies are taking the right action in conserving water. Plus, over half of global consumers agree that reducing water use can positively curb greenhouse gas emissions.
If companies prioritize profit over sustainability, or even their own customers’ desires, what will compel them to make the necessary changes to combat the environmental crises that threaten us all?
Sustainability policies are now standard practice for most enterprises but are often framed as matters of social and moral responsibility. Framing these considerations this way might work for a handful of CSOs, but viewing sustainability through that lens can be limiting. While consumers do have lofty expectations when it comes to corporate actions on sustainability, seeing sustainability policies as only a moral responsibility implies that these policies cannot also make good business sense. This is not the case, and through strategies such as better water management, companies can achieve their profitability and climate goals simultaneously.
It is a mistake to see business and citizenship initiatives as separate. They can — and should — co-exist. To start, companies need to understand and marry their sustainability and business goals, then they can start gaining insight into their unique challenges and opportunities and how one can impact the other. With that insight, companies can start implementing actions to create maximum impact. Companies can then deliver outcomes that achieve business and citizenship goals.