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It's not just your carbon footprint, now it's your water footprint

In the wake of growing consumer interest in carbon footprints, a new awareness of our water consumption has led to the notion of a ‘water footprint’. Andrew Wigley explores some of the reputational challenges for business

Awareness of our individual carbon footprints has steadily grown as we have come to realise in recent years that our behaviours are impacting the environment in many more ways than we ever thought possible.

While minds remain focused on carbon footprints and online calculators advise the consumer how much carbon they are using, little attention has so far been given to water usage. This looks set to change and present businesses across the spectrum with the additional challenge of managing their own water behaviours and a potential consumer backlash to poor water stewardship.

The ‘water footprint’ concept was first mooted in 2002 as an alternative indicator of water use. Where traditional indicators of water use relate only to production, the water footprint takes the consumption perspective. Water footprint calculators are available too, and provide a humbling assessment of our water consumption individually as well as collectively as a nation.

Indications are that mild awareness is beginning to galvanise. Remarks by the former environment minister Phil Woolas, describing the UK’s £1.7 billion bottled water industry as ‘morally unacceptable’ given the high quality of the nation’s tap water while the global shortage of water, especially in the developing world, is reaching crisis levels caused consternation. Although largely concerned with the much higher carbon footprint of bottled water compared to tap water, it brought media and public attention back to water issues.

Wading in to the debate, former London Mayor Ken Livingstone joined forces with Thames Water to promote tap water in restaurants, cafes and pubs across the capital in a bid to help the environment. This is just the beginning, not only for the bottled water industry, but also industry at large.

At the 2008 World Economic Forum, the doyen of international business and political get-togethers, water featured prominently with an action plan now being developed by six CEOs to galvanise big business efforts to reduce water usage. Their reason is twofold. First, there is a realisation that business faces significant disruption across all sectors and all geographies due to water scarcity. Second, they recognise water efficiency and usage will increasingly creep up the agenda of consumers when making their purchasing decisions.

Some industry sectors look distinctly more vulnerable than others when subject to scrutiny. The global agricultural sector uses 70 per cent of the world’s global freshwater highlighting the dilemma between water usage and meeting the world’s food demand. The extractives industry looks vulnerable given their footprint, often in parts of the world where water demand is already under pressure e.g. southern Africa, Latin America and Australia. The beverages and soft drinks industry leaders, all with large presence in the developing world, also face a challenge about justifying water usage.

Awareness of water consumption will only increase among consumers presenting reputational challenges for business so what steps should it take?

Well, those that are prepared for the public affairs and public relations challenge will, at least, be best placed to begin the process of engagement with informed stakeholders.

But those likely to commercially ride the tide are businesses which take a leadership position and begin to develop water specific action plans within and alongside their existing environment management programmes.

Unilever has taken water management into the core of its sustainable development strategy for some time and since 1995 has more than halved the amount of water it uses per tonne of production by minimising water usage and maximising water recycling at its manufacturing sites. It’s a strong message from a leading food producer.

According to a survey carried out by investment bank Goldman Sachs large ethical companies persistently outperform the market. A list of ethical companies compiled by the Bank was found to outperform a world index of business by at least 25 per cent. Anecdotal evidence suggests that those consumer facing companies which have sought to embrace sustainability, including transparency on their carbon footprints such as Waitrose and Marks and Spencer are benefiting from robust sales.

Leadership will be most evident in companies like agro-chemicals giant Syngenta which is investing in research and development into breeding crops that need less water. Companies which innovate not only to reduce their water consumption but also the water footprint of its products will be best placed to face the consumer and regulatory front.

In addition to the responsibilities of business, there are also opportunities for companies that are willing to innovate by developing more efficient water reclamation and purification technology. As the availability of clean water for domestic, agricultural and industrial use continues to come under pressure, there will be an increased demand for low energy efficient solutions to maximise the use of the water resources currently available. With changing climate now an accepted reality coupled with the impact of deforestation, both large scale flooding which pollutes reservoirs, and the spread of desertification, this is an issue that is not going away.

While water looks to be the next big environmental issue to capture the public imagination and concern, this will only be another stepping stone to a more holistic view and understanding of our total impact upon the environment and businesses embracing that approach now are set to be the big beneficiaries tomorrow.

For more information, videos and advice for SMEs, visit www.freshbusinessthinking.com