Sustainability In Times Of Stress — A 'Bottom Line' Endeavor

By Kevin Westerling,
@KevinOnWater

What's your company’s “bottom line?” If “sustainable water management” is your first answer, you probably work in municipal water.

More and more, however, industrial operators must also consider sustainable water management as an essential function — even if they primarily see the “bottom line” in terms of profit margin. That’s because, as water becomes scarcer in the face of climate change and population growth, the ability to efficiently manage it within heavy-use industries can either lift or sink profits — not to mention the impact on surrounding communities.

To understand the business, human, and environmental challenges of water management and how to surmount them, I spoke with Emilio Tenuta, senior vice president of corporate sustainability for Ecolab. A 36-year veteran at the company, he explains the role of smart technology for saving water (and money), and how Ecolab has expanded its stake in water stewardship by partnering to supply communities in need across the globe.

And, as if ongoing water and climate concerns weren't enough, all of our collective vulnerabilities worsened with the onset of the COVID-19 pandemic. In the following Q&A, Tenuta tackles this varied, intertwined set of issues, while keeping focus on the true “bottom line” — water for all.

What were the global trends regarding water use, availability, and climate impacts before the pandemic?

Prior to the pandemic, the world was already grappling with the growing threat of water stress. The demand for water is rising with our growing population, and [water] is needed to fuel industry and produce resources to feed the world. At the same time, climate change is drastically altering the dynamics of hydrological cycles around the world, resulting in increased droughts and flooding events. Flooding in the American Midwest has cost farmers their crop yields and caused billions in damage. And on the other end of the spectrum, in 2019 the City of Chennai, India, became the second city after Cape Town, South Africa, to declare a “Day Zero,” a term used to reference the day when local water supplies reach a critically low point.

Global water stress is an incredibly complex situation, as water remains an unequal resource around the world. While some regions have plentiful supplies, others are struggling to meet the needs of their ecosystems, communities, and economies. As water stress issues persist, we’ve seen governments, NGOs [nongovernmental organizations], and the private sector band together to take collective action in addressing this challenge.

At the start of 2020, the United Nations CEO Water Mandate launched the Water Resilience Coalition alongside founding members — including Ecolab, Microsoft, Cargill, AB InBev, and others — to take action with a private-public sector approach to local water issues. These collective efforts aim to address the uncertainty that many communities face around water quality, quantity, and access, which have been further exacerbated by the pandemic.

How has the pandemic affected the momentum and attention around climate action?

COVID-19 is a real test to the sustainability commitments and initiatives that we’ve seen from both government and business in recent years. The current pandemic has required our urgent attention, but even so, more and more companies are setting ambitious sustainability goals.

Geographies experiencing extreme water stress are at even higher risk during the pandemic, given the lack of water for use in basic hygiene. As we combat this pandemic and build a more resilient future, climate and water need to be considered as part of the solution to supporting healthy environments.

If we can come together in solidarity to turn the tide on this pandemic, we also have what it takes to achieve the action needed to address climate threats such as the water crisis. It’s going to be a big job, but we know it can be done, because we’ve seen it in our own operations and in our work with our partners.

How can technology satisfy the demand for water without adding to our carbon footprint?

Investing in water-related technology doesn’t mean sacrificing progress on reducing emissions. Digital and IoT [Internet of Things] technologies are practical applications for most industrial facilities to implement smart water management practices and to have better visibility into their water use. Technology has advanced to a point where we can now monitor, evaluate, and analyze water use in ways that we couldn’t in the past, making it easier to identify risks. This technology enables a level of transparency that allows facility managers to identify and diagnose areas of their operations that can be made more efficient through better methods of water treatment, or simply avoiding using more water resources than are needed.

The insights we have today provide the data needed to make the business case for action, implement effective localized solutions, and report progress back to the boardroom.

Which sectors or applications should employ these technologies for greatest impact? How would you describe ROI, in most cases, for the adopters of sustainable solutions?

There are certain industries, such as energy production, the agriculture supply chain, and heavy manufacturing, that have an incredible opportunity for energy and cost savings by cutting their water use. Companies that are true leaders in these industries, both in financial performance and in operating sustainably, have invested in ways to reduce their water footprint.

Recently, we partnered with Exelon Generation to create savings of 1.56 billion cubic meters of water (412 billion gallons) and eliminate the need for 11 million kilowatts due to shorter outages, saving close to $5 million. Ecolab helped them by using innovative chemistry for water treatment and implementing sophisticated automation technology to provide 24/7 monitoring and control of chemistry performance. We worked with food and agriculture giant ADM to help them save 7 million cubic meters of water (1.8 billion gallons) and avoid 31,500 metric tons of CO2 emissions per year, saving $28 million. We partnered with them at 212 facilities around the globe to deploy systems that helped them better monitor and manage water use.

We also worked with one of the oldest steel mills in India to help upgrade its outdated water management technology. Now the facility is saving 1.45 million cubic meters of water (383 million gallons) and avoiding 3,000 metric tons of CO2 emissions per year, saving close to $8 million.

Implementing smart water management practices and technology leads to both short- and longterm savings. We’re seeing major brands and leaders across industries, from tech companies to automakers, prioritize water management across their organizations, as it not only saves costs but makes their operations more resilient to climate change.

Is there pressure on private industry — financial, social, or otherwise — to adopt solutions that address water challenges in their communities?

There has certainly been more pressure from international bodies and activist movements, but we’re seeing some of the most effective pressure come from the investment community. Environmental, social, and corporate governance (ESG) investing is up sharply. Major investment firms such as BlackRock are showing growing concern not just for the climate, but specifically for water. In July of this year, in the midst of the pandemic, BlackRock released their report on the financial risk of water,¹ and how most companies underestimate the threat.

With the frequency with which companies have started to make public commitments about climate action or announce goals, there has been a counterbalance of activists and NGOs holding businesses responsible. You cannot get away with greenwashing today, and a truly climate-concerned company will not only talk about sustainability but will also take action and advocate for change. A company’s impact on water resources falls under this same scrutiny, particularly how their operations affect water availability and quality.

Since water is a local issue, we believe that it needs to be addressed as such, at the facility level. When we helped launch the Water Resilience Coalition earlier this year, we committed to finding solutions to achieve a net-positive water impact in water-stressed basins in which member companies operate.

Related to this effort, we’re partnering with Water.org to help enable access to sustainable drinking water and improved sanitation for 100,000 people living in poverty in India, while contributing more than 26.4 million gallons of water per year to watershed health in extremely high-stress river basins in which Ecolab operates. Water.org works with microfinance institutions and other organizations to enable them to provide water loans to families so that they can invest in a water tap, rain catchment system, and/or toilet for their home or community.

We believe it’s these types of partnerships that move the needle to reduce the risk water stress poses to the world. Businesses are starting to understand the risks, and leading global companies are actively working to manage and reduce their water footprint — but, in reality, corporate water use has been going up, not down, in recent years. There’s much more work that needs to be done.

What impact, if any, do you think the change of U.S. presidential administrations will bring to water governance?

With the Biden administration we can anticipate heightened scrutiny around climate change going forward. We know that the United States will rejoin the Paris Climate agreement, which many major U.S.-based brands have already pledged to and adopted sustainability goals to match its ambitions.

With this, companies could face increased pressures and regulation around water quality, water use, and carbon emissions. There’s an opportunity for businesses to change the way they view and use water in their operations. There’s also an opportunity for business and government to work together to drive advancements in water governance, whether that takes the form of legislation or investments in infrastructure. Investments in infrastructure that support reuse and recycling of water, which enables companies to more efficiently use the water available to them, will help reduce water use on a national level.

Reference:
1. https://www.blackrock.com/us/individual/insights/blackrock-investment-institute/troubled-waters