Economy and Business

A new consensus about water is emerging in the business world. What was once just an aspect of corporate social responsibility is now expanding to encompass an array of critical issues about sustainable business models, supply chains, operational requirements, and long-range planning. For many industries, prudent water management is now a matter of enlightened self-interest as well as good corporate citizenship. The growing global water crisis presents the private sector with a classic combination of risk and opportunity. Corporate leaders are grappling with the reality that their current water-management practices neither adequately address the importance of water as a resource for their businesses nor enable them to live up to their public responsibilities as protectors and stewards of that resource. Even so, that reality has led to the formation of new initiatives such as the CEO Water Mandate to provide informed leadership and direction toward viable solutions. How can the business sector work to meet its critical needs for water while fulfilling its mandate for responsible handling, treatment, and conservation?

“Go local” is not always the best solution. Today, much of the world’s food and consumer goods are produced in the most water scarce areas on Earth. As the products are exported, so is the water that was required to produce them: 1,625 billion cubic metres of virtual water are shipped around the planet annually. By switching from water intense agriculture to importing food, dry regions could save water. But what impact will greater regulation of the world’s trade patterns, under agreements through the World Trade Organisation or other organisations, have on the movement of water resources? How would current agreements, such as the General Agreement on Tariffs and Trade (GATT) or the General Agreement on Trade in Services (GATS), impact attempts to centre trade based on more effective use of water resources?

CO2-compensation has become a familiar concept through carbon offet programs. Now the water sector has adopted the idea: through water neutral initiatives, individuals, organisations and companies are able to compensate for their water use by investing in projects that help improve access to water and efficient resource management.

Investments in water and sanitation are still perceived as a cost by many governments. The facts tell a different story: every dollar invested in water supply and sanitation gives back 4 USD - 12 USD back. Good water resources management leads to social and economic growth and yields economic returns by avoiding costs related to pollution, contamination and disasters.

The world is experiencing an economic downswing. Less money in society means less money available to spend on common goods. How is the global economic crisis impacting financing of water and sanitation projects? How does it affect investments in and maintenance of water infrastructure?

Corruption occurs in every part of the water sector, in countries rich and poor. In some countries, it can increase the cost of connecting a household to a water network by more than 30 percent. Infrastructure projects have large extra costs added to their budgets – costs which have to be covered by tax payers or water users in the country concerned. Worst affected are those deprived of options: Poor people living in the slums often pay 5-10 times more per litre of water than wealthy people living in the same city. How are we addressing this problem?

Using less water means saving both money and the environment. Still, water efficiency varies greatly between sectors and nations and is only partially linked to a country’s level of industrialization; industrial water productivity is $138 per cubic meter in Denmark and less than $10 per cubic meter in the United States. What makes the difference?