Included in the sustainable development goals to be endorsed by heads of state and government later this month, is a dedicated goal to ensure available and sustainable water and sanitation for all.
Universal access to water, sanitation and hygiene (WASH) cannot be achieved without the private sector. In the past, companies’ support for the provision of clean water to communities was viewed as a philanthropic activity. Yet there is a strong business case for this too.
First, with rapid urbanisation and population growth there is increasing competition for a limited supply of water. Consequently, a real or perceived mismanagement of this resource adds to the risk of conflict with local communities, with companies potentially losing their social licence to operate. In 2014, for example, authorities in northern India ordered the closure of a Coca-Cola bottling plant accused of extracting too much groundwater.
Second, providing clean water has the potential to reduce absenteeism and the turnover of supply chain workers. Improved production quality and productivity helps make the case for other suppliers to participate in improving water practices too. The World Health Organisation has calculated that for every $1 invested in sanitation, the economic benefits range from $3.10-$16.60 by keeping people healthy and productive.
Third, the provision of clean water can be fundamental to business growth. Unilever has stated publicly, for example, that making water, sanitation and hygiene commonplace offers a market opportunity for them as well as a human development one.
Instigating change
Over the past decade, an increasing number of businesses have been working to understand the risks and effects that water may pose for them. Of the more than 1,050 companies that responded to the latest CDP water report, 68% indicated that water posed a substantive risk to their business. Almost a quarter said that issues around water could limit the growth of their business. Of those, one-third expected the constraint to be felt in the next 12 months.
More companies are working to manage their water discharge and understand the impact they have locally. For many, their own operations are a good place to start. The World Business Council for Sustainable Development’s WASH at the workplace pledge supports companies to develop the right internal processes to ensure access to WASH for all employees. Companies such as Unilever, EDF, Nestlé and Veolia have signed up.
But responsibilities do not end at the factory fence. With the formal recognition of the human right to water and sanitation in 2010 and the adoption of the UN guiding principles on business and human rights in 2011, there are increasing expectations of companies.
Some are making a concerted effort. Coca-Cola has so far spent about a billion dollars developing wastewater treatment plants around the world to date. Fellow drinks company SABMiller has a target of reducing water in its breweries by a quarter by 2015 from a 2008 baseline. But we cannot rely on corporation-led targets alone. Another drinks firm, Diageo, revealed in its annual report last month that it had failed to meet all but one of its environmental targets.
While implementing standards in a company’s own operations should be straightforward, a number of companies find it difficult to ensure access to water and decent toilets in their supply chains. Some of the world’s largest agribusinesses, for example, employ thousands of seasonal workers and maintain an extensive supply chain. Their challenges are often practical, such as how to ensure that there are toilets on large farms.
Overcoming such challenges requires the involvement of top-level management to get taps and toilets on the corporate agenda. That means gathering hard data to demonstrate the impact of interventions. From social and environmental concerns to market opportunities, there are compelling reasons for businesses to prioritise water stewardship.
- Hannah Greig is a private sector advisor at WaterAid, MaiLan Ha is an advisor at the CEO Water Mandate and senior research associate at the Pacific Institute and Sara Traubel is an associate on water at World Business Council for Sustainable Development.
