A Different Kind of “Blue Wave” on the Horizon
Learning to appreciate true value of water for businesses
By: Matt Howard, VP Water Stewardship at The Water Council & Director of AWS North America
Last week I had the privilege of participating in a dinner conversation moderated and curated by The Atlantic. Myself, along with some of North America’s leading water thinkers like Will Sarni, CEO and Founder of Water Foundry, and Gary White, CEO and Co-founder of water.org, among others, sought to answer a simple question: how do we get companies to engage and commit to water stewardship excellence in their operations? We touched on some basic issues that continue to be debated in various international water fora like the relatively low cost of water in North America, the power of the consumer to push for corporate behavior change, the imbalance between water supply and areas of demand, and importantly, the “value” of water.
For me, this dinner conversation was yet another opportunity to reflect on the importance of water in our everyday lives – a reflection of water’s true value. A resource that is often taken for granted, water is essential for most of our everyday activities. From the basic tasks of making a cup of coffee and taking a shower; to the requirements for irrigating the food we eat, manufacturing the cars we drive and helping power the lights in our buildings. Water is the most valuable resource on planet earth. Water is irreplaceable in our daily lives, and vital to businesses globally.
Yet despite this simple truth, I spend way too much time flying across North America attempting to convince water-intensive businesses that water is material to their operations and supply chains. When I do face resistance from companies on making corporate commitments to implementing water stewardship best practices, the sticking point usually revolves around the paradigm that the “price” of water does not reflect its true value. To borrow from the early part of my career when I practiced the dismal science (economics), Adam Smith presented a classic economic paradox which is appropriate for this discussion: “Why do diamonds cost more than water?”
The paradox is a simplification of a problem that can be inherent to attempting to explain the value of a good based on its utility. Water is much more valuable than diamonds because some initial amount of water is necessary for life itself. But because water appears to be plentiful and diamonds are scarce, the marginal value (value of each additional unit) of a given amount of diamonds exceeds the marginal value of the equivalent amount of water. Thus, water is generally viewed as abundant and is often undervalued, therefore, water is relatively cheap.
While water is abundant in nature and exists in a renewable cycle, the competing demands and uses of fresh water have stressed the resource significantly (supply and demand imbalances in the western US, water quality challenges in the Great Lakes). There may be the same quantity of water on earth and in the atmosphere as there has been for millennia, but the current demand for fresh water is greater than ever, availability and access to fresh water resources vary significantly from basin to basin, and all of this is exacerbated by a changing climate.
In my role with The Water Council and our partnership with the Alliance for Water Stewardship (AWS), it’s critical that my colleagues and I continue to work and partner with businesses so that we all may better understand the true value of water. The principles of water stewardship as predicated by AWS provide a framework for industrial, agricultural and commercial businesses to understand the true value of water to their operations and supply chains. This encourages them to better manage and mitigate the risks that are associated with where they source water and how they use it.
AWS defines “water stewardship” as the use of water that is socially equitable, environmentally sustainable and economically beneficial; it is achieved through a stakeholder-inclusive process that involves site and watershed-based actions. Practicing good water stewardship results in improved business resiliency and ensures that businesses implement strategies to address water risks. These can include operational and supplier disruptions, higher operational costs, threats to their social license to operate, brand damage and more. It also promotes collective action to define and achieve shared value benefits that are realized outside the facility fence line.
Water stewardship gets us beyond simply viewing water as an input that needs to be managed, but rather viewing water as an asset that deserves a stewardship approach. Kim Marotta, a water leader with MolsonCoors, is fond of saying, “no water, no beer.” She’s absolutely right. And, no water, no gifts under the Christmas Tree. I know, it seems hardcore, but it’s true.
A different kind of a “blue wave” is cresting and this one is rife with shared challenges and opportunities. We all need to switch to a water stewardship mindset, find some partners and begin the hard work of ensuring the sustainability of our fresh water resources now and into the future. To see more of my call to action, check out this short video from last week’s The Atlantic Water Summit where I was interviewed by Valeria Orozco of Nestle Waters.