Water hasn't yet risen to the level of energy and climate as a pressing issue for most companies, but the conversation seems to be flowing lately. And that conversation includes two concepts likely to enter the green lexicon.
One of those, "virtual water," received currency last month when its foremost proponent, Professor John Anthony Allan from King's College London and the School of Oriental and African Studies, was given the 2008 Stockholm Water Prize. Allen coined the term back in 1993 to refer to the amount of water embedded in the production and trade of food and consumer products. A cup of coffee, for instance has 140 liters (about 37 gallons) of virtual water, when you consider the amount of water used to grow, produce, package, and ship the beans. Similarly, a hamburger contains 2,400 liters (634 gallons) of virtual water.
The concept of virtual water (also known as embedded or embodied water) is of more than academic interest. As water concerns flood a greater number of regions, the embedded water of common products provides a useful understanding of how water resources are impacted by global trade. For example, it explains how and why nations such as the U.S., Argentina, and Brazil "export" billions of gallons of water each year — in the form, say, of water-intensive grain or meat — while others like Japan, Egypt, and Italy "import" billions.
The concept also could be useful in national agriculture policy, much as "embedded energy" has aided policy makers' understanding that growing and processing corn to produce biofuels can require significantly more energy than the process yields. (Not that this knowledge has dissuaded policymakers from supporting energy-intensive biofuels, of course.) And it may become a factor in the price of many raw materials, should carbon taxes or trading systems illuminate the energy and carbon intensity of things like aluminum, glass, and plastic.
There are other implications. Virtual water calculations will, no doubt, lead companies, individuals, and others to calculate their "water footprint," the full measure of the water embedded in the products they buy and the activities in which they engage. And it may accelerate interest in what Peter Gleick, co-founder and president of the Pacific Institute, calls the "soft path," a much more integrated, sophisticated approach to water in which different types of water — potable water, gray water, brown water, etc. — are used for their highest and best use, rather than using potable water — the highest quality, for flushing toilets, watering lawns, etc.
Last year, in an interview, Gleick expressed to me how little companies understand the water embedded in their systems.
There are very poorly understood or appreciated connections between business and water. Every business uses water in one form or another. Some use a lot of water, some not so much, but for many businesses, water is a surprisingly large component of production, either directly or indirectly, in the supply chain. So, for example, the beverage industry may use three or four gallons of water to produce a gallon of soft drink or beer or milk, but often a thousand times as much water is used in the upstream part of the process, perhaps to grow the sugar that goes into a soft drink. Similarly, in the textile industry, it takes water to make clothing but it takes a lot of water to grow fiber.
Businesses are often unpleasantly surprised where a local community objects to their use of water or there's a drought that affects their supply chain or there's a water contamination problem that results in their license to operate being removed. We're seeing more and more examples where businesses that don't pay attention to the water required to run their business run into unpleasant surprises.
Gleick went on: "I actually think the risk to companies is larger in some ways for water than it is for energy. There are substitutes for energy. You can replace oil or electricity with biofuels or with renewables. Water has no substitutes."
Coca-Cola recognizes that. And over the years, it has bumped up against activists, communities, and others for its water use — which is, of course, the fundamental ingredient of all of its beverages. In recent years, a series of developments pressed the need for a more comprehensive global water strategy. In the late 1990s, it began acquiring water brands (its principal U.S. offering is Dasani). In 2002, the company faced protests in India about the company's drawing down of groundwater resources. A year later, it began reporting water quality and quantity as a material risk to its business in its U.S. Securities and Exchange Commission Form 10-K for investors.
In response to this Coca-Cola "developed and continues to evolve one of the more sophisticated water stewardship programs in the private sector," according to a new report from Business for Social Responsibility (Download — PDF). "As of March 2008, no other organization in the world has publicly pledged to achieve "water neutrality" across global operations that span more than 100 basins and sub-basins around the world."
Water neutrality. It's a compelling idea in the age of carbon-neutral and zero-waste commitments. But water is a bit different from carbon and waste: unlike the other two, there's a finite amount of water. And as Gleick points out, there's no known substitute for it. Moreover, as BSR points out:
True sustainability as it relates to water will involve more than "neutralizing" the volume of water that [Coca-Cola] uses. This is because fluctuations in the amount and quality of water available to a given community or ecosystem play an important role in sustaining the diversity and proper functioning of river ecosystems and watersheds.
Coke announced its water-neutral goal last summer. The company committed to "set specific water efficiency targets for global operations by 2008 to be the most efficient user of water among peer companies" and that by 2010 it would "return all the water that we use for manufacturing processes to the environment at a level that supports aquatic life and agriculture."
Coke will need to work hard to keep its goal afloat. The BSR report notes that last year, six organizations — Twente University, WWF, Coca-Cola, World Business Council for Sustainable Development, Water Neutral/Emvelo Group, and UNESCO-IHE — came together to investigate the benefits of water neutrality as a meaningful milestone. The groups developed three criteria for legitimate use of the term:
- Defining, measuring, and reporting one's "water footprint";
- Taking all action that is "reasonably possible" to reduce the existing operational water footprint;
- Reconciling the residual water footprint (amount remaining after a company does as much as possible to reduce footprint) by making a "reasonable investment" in establishing or supporting projects that focus on the sustainable and equitable use of water.
There are more than a few squishy issues here — the definitions of "reasonable investment" and "reasonably possible," for starters. But we've got to start somewhere. Over time, I hope, the bar will rise.
Can it work? Will "water neutral" become the Next Big Thing in the field of corporate resource efficiency? Can it actually make a difference? It's a nascent idea, so it remains to be seen. But the high likelihood of continued water crises suggests that more and more companies will be learning about "virtual water" and "water neutrality."
For now I'm guessing that only a handful of companies — those whose products and reputation are most linked to the precious resource — will be willing to take the plunge.
Terrific piece, Joel. Well done. We've used data from the Pacific Institute in our own sustainability metrics to great effect. Good stuff.
Mark
Posted by: Mark W. McElroy | April 04, 2008 at 10:25 AM
Another excellent piece Joel.
You ask if “water neutral” will be the next Big Thing. Much depends on how effective water campaigners are at communicating the business implications of water efficiency, through concepts such as virtual or embedded water. I remember a discussion on the subject I brokered with water experts – including Professor Allan - and a group of senior food executives. The frustrating conversation left the executives bemused and in desperate need of a drink.
Posted by: Peter T. Knight | April 04, 2008 at 02:05 PM
Again, a fine bit of analysis, Joel. Interestingly it appears that a new sector, "water efficiency" is at last starting to emerge in the cleantech VC space alongside energy efficiency, where there's a lot of very similar low hanging fruit to be plucked by startups.
Posted by: Jeremy Walker | April 05, 2008 at 11:31 AM
Der lang anhaltende Machtkampf um das Gebiet Tibet, wobei es meiner Ansicht nach um die einseitige Macht Chinas geht und auf der anderen Seite ein repressionsfreies und anerkanntes Nebenherleben (lt. dem Dalai Lama), spitzt sich angesichts der bevorstehenden Olympischen Spiele weiter zu.
Posted by: Thomas | April 05, 2008 at 04:52 PM
Thanks for taking the time to pull this piece together and make the connection of Carbon Neutral -> water neutral & carbon footprint -> water footprint. I blog on Green Data Centers and regularly post content on water to remind the IT crowd that water is their next issue after electricity. http://www.greenm3.com/2008/04/energy-concepts.html
Posted by: Dave Ohara | April 08, 2008 at 07:02 AM
ANOTHER CLARION CALL FOR CLIMATE ACTION
Press release19-04-2008
Fisher people demand justice for climate refugees
South Indian fishing community conference on Climate change and
Fisherpeople's livelihood was held on 17th April 2008 at Rotary Community
hall,Nagercoil, Kanyakumari district. This event was organized by
TamilnaduFisher workers Union (TFU), Kerala Independent Fish workers
Federation(KSMTF) and Voices from the Margins (VFM).
Mr. T. Peter Dass, President,Tamilnadu Fish workers Union (TFU) delivered
welcome address and he pointed out that fisher people are facing sea erosion
as a result ofclimate change. This public event is recognized as the first
one organized by the affected community against Climate Change and fisher
people have decided to launch public protest for their sufferings as a
result ofclimate change.
Mr.M.Pakkirisamy, district revenue officer inaugurated this workshop and in
his Chief Guest address said that sea level is rising in the last pastdecade
at an unimaginable rate of increase. Sea level is expected raise 5 meters in
the next 50 years and it is going to affect the fisher people.There is a
need to change the consumption pattern to avoid the expansion of the hole in
ozone layer.
Mr. K.P. Sasi, activist film maker wondered what the government is doing to
stop the carbon emission? There is a need to change the production process
of the industries, agriculture and the energy systems. Nothing is done so
far to the people affected by climate change and marginalized people who are
becoming refugees as a result of ecological impacts thrustupon them.
Dr. A.D.Shobana Raj, ecological researcher highlighted the factthat the
coastal Kanyakumari district has 56 km long coast with apopulation density
of 1500 per sq.km; and the coast line is vanishing. 80% of the water
resources in the coastal area have become saline and peopleare facing water
crisis because of the intrusion of sea water. 132 coastal sea weeds have
disappeared in the last 10 years. If the global temperature rises 2 degree
Celsius then it will have impact on micro organisms leadingto several
contagious diseases affecting coastal people.
Dr. S.P.Udayakumar social activist demanded that our energy consumption
pattern should change. The solution for climate change lies in shifting our
energy sector from fossil fuel dependent sector to renewable energy. Our
transportation pattern should move towards effective and efficientpublic
transport system rather than promoting cars which will lead toincrease in
carbon emission and vehicular pollution.
Mr. Sathya Sivaraman,journalist & film maker stressed the need to pinpoint
who emits more carbon and who should pay for carbon credit. USA is
responsible for 25% ofcarbon emission and it should take the responsibility
in compensation to the victims of carbon emission and climate change. The
relationship of Human species to Earth should be the equivalent to child and
mother, but this species has taken up the role of the destroyer of the earth
and other species. Carbon emitting industries should be changed and if this
is not possible all such industries should be closed.
After the people's response, Mr. T.Peter president KSMTF demanded that
chemical farming practices, polluting industries and carbon emitting
lifestyle should be stopped since the fisher people are the most affected
bythe climate change. Today, this public event is organized with the
conviction that the affected communities can not remain in halls but there
is a need to launch mass public protest not just for their survival alonebut
for the entire humanity locally, nationally and internationally.
In the concluding session Mr. S.M.Prithiviraj, Convener, Voices from the
Margins explained how the marginalized farmers of the Tamilnadu are affected
by climate change in recent heavy rains as a result unusual low pressure in
Arabian Sea. Fisher people are affected by changes in pattern of fish catch,
reduction in fish wealth, and loss of working days as a result of climate
change and tidal waves and their houses are washed away by intruding sea in
many places of South India. Why should the fisherpeople pay for the impacts
of climate change entirely created by other vested interests? The conference
ended with a resolution questioning the polluting industries, chemical
farming practices, non-renewable energy sectors,carbon emitting life style
and the need for taxing the polluters to paythe price for ecologically
affected fisher people and other marginalized communities.
Press release issued byTamilnadu Fisher workers Union (TFU)
Ph:09443294198
Kerala Independent Fish workers Federation (KSMTF)
Ph:09447429243and
Voices from the Margins
(VFM)Ph:09843080963____________________________________
Steven Earl Salmony
AWAREness Campaign on The Human Population,
established 2001
Posted by: Steve Salmony | April 20, 2008 at 08:56 AM
Many thanks Joel!
As a MS student in conflict resolution who cited Tony Allan in her thesis, I hope that the concept of virtual water catches on for its implications in conflict resolution as well.
For example, in India's Narmada River Basin, the need was for electricity and flood control, not necessarily a complex of dams and irrigation canals will their tremendous impact on indigenous and poorer people. In the conflict between the Palestinians and Israelis, the need is for food and economic development, not necessarily water per se and VW could allow Israel to release more water to the Palestinians with relatively little economic harm to its own well being.
Posted by: Alix | April 23, 2008 at 09:47 AM
I would agree that the water sector of 'cleantech' has not gained much market awareness, especially in the US, and compared to other cleantech sectors.
We are seeing new awareness of water efficiency in the buildings market, especially around facility management and operations. It could be that the market drivers in this industry (i.e. BIM, virtual modeling, integrated workflow) may also accelerate the adoption of embedded water issues.
Posted by: Scott Boutwell | April 23, 2008 at 11:40 AM
Where I live I am charged a little more than $10 per 1000 gallons of water (split between delivery and sewerage charges). Applying that price to the hamburger in your post would make the water content alone cost about $6.50. Perhaps we are charging agriculture too little for water and not sending an appropriate price signal?
Posted by: Steve | April 23, 2008 at 08:52 PM
The next comments are supported by experiences gained and lessons learned through 17 years working with water decisionmakers, stakeholders and water-vulnerable communities. People living in emerging economies or developing countries, thereby perceiving they will cope with water scarcity scenarios until year 2020 or 2050, accept very well concepts such as "business water footprint" and "water neutral". Concepts introduced by Prof Allan and followed by Prof Hoekstra and coworkers are a very good chance to provoke a transparent dialogue among water sectors. Our experience demonstrates that as a bottom up process, the "hydrosolidarity" is foreseen in relation to Business for Social Responsability (BSR). BSR is viewed as a midterm yardstick to encourage offsets and to keep corners between the Gross Net Product (GNP) and the Payment of Environmental Services (PES), at the LOCAL scale. For example, a medium-size Brazilian's Municipality GNP has the same order of magnitude to the equivalent liability of Municipality's water services computed through PES. That says, my GNP per capita is close to my liabilities per capita of services from water cycle: the better my economy, the faster my water liability. This local effect is, indirectly, GLOBAL-connected through trade and made other people receive those impacts through the increasing prices of commodities, where water is usually incorporated at the processes of goods and services. And produced in my Municipality scale! Conversely, many stakeholders, either public or private, are very worried about PES assessment as a phantom of a potential water trade. As the time goes by, commodities are going to increase in the period 2008-2013 globally, confirming these local-global connections. For that reason some criticisms are brainstorming whether "hydrosolidarity" is either a paradigm, and a new opportunity, or a paradox, farcing biofuels and scaring poverty communities worldwide at most.
Posted by: Prof Dr. E Mario Mendiondo | May 11, 2008 at 10:26 AM
Joel, excellent post. I followed up at TreeHugger: http://www.treehugger.com/files/2008/11/the-next-greenwash-water-neutrality.php. Coca Cola is planning to clarify some points of its scheme in the coming days. Stay tuned.
Posted by: alex | November 27, 2008 at 08:53 PM
Where I live I am charged a little more than $10 per 1000 gallons of water (split between delivery and sewerage charges). Applying that price to the hamburger in your post would make the water content alone cost about $6.50. Perhaps we are charging agriculture too little for water and not sending an appropriate price signal?
Posted by: Nokia | March 03, 2009 at 06:37 AM