The State of Green Business 2009: Water Becomes the New Carbon

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Water Becomes the New Carbon

It has become eco-chic in recent years to declare that “water will be the oil of the 21st century” — an essential and limited resource, unevenly distributed around the world, the growing shortage of which will lead to economic power for water-rich nations and poverty for the rest, possibly even resource wars between the haves and have-nots. Given that, how do water-dependent companies manage in a world where water quality and quantity become a constraint to doing business?

The question has remained largely theoretical, the basis of scenario and contingency planning for a handful of firms, with relatively few companies engaging in water strategy planning. But as the effects of climate change materialize with greater frequency, companies from California to Calcutta are taking a deeper dive into water efficiency, measuring and managing its use and finding ways to close the loop, even setting goals to become “water neutral.” In that regard, water is less the “new oil” than the new carbon.

The large beverage companies seem to be at the forefront of this wave. Anheuser-Busch announced that its company wide water use increased 2.4 percent over five years while its beverage production climbed about 2 percent. But thanks to a number of efficiency efforts, the brewer managed to reduce the amount of water used make beer, keeping its water use, well, flat. Coca-Cola is aiming for water neutrality. In 2007, the company developed an integrated water strategy focused on plant performance (water use efficiency, water quality, and wastewater treatment), watershed protection,enabling access to clean drinking water, and working to drive global awareness and action to address water challenges. Coke’s system wide goal is to return all water used in its operations back to nature. Its mantra: Reduce, recycle, and replenish.

But water efficiency is also bubbling up in other sectors. GE said it plans to cut freshwater use 20 percent, in absolute terms, through reuse efficiencies in its commercial and manufacturing processes. The company’s learnings will be passed on to its industrial, municipal, and government customers. GE issued a water reuse white paper to help communities and governments boost water recycling and reuse. IBM announced a water management research center in the Netherlands as part of its Big Green Innovations initiative. The company also issued a report outlining the concept for an educational and perhaps advocacy organization focused on establishing the value of applying advanced sensing, information technology, and modeling to water management in the U.S.

Some of the action on water taps into a wellspring of knowledge of how to measure the full water impacts of products. The notion of “embedded water” (also referred to as”virtual water”) has achieved increased attention in a handful of companies. The term refers to the amount of water used in the production and trade of food and consumer products —again, a counterpart to the notion of embedded carbon. A cup of coffee, for instance, has 140 liters (about 37 gallons) of embedded water, when you consider the amount used to grow, produce, package, and ship the beans. A hamburger contains 2,400 liters (634 gallons). Such metrics provide new opportunities to better understand, manage, and reduce water use.