Water Stewardship: Paralyzing Complexity or Competitive advantage?
Nick Martin
October 15, 2018
However, growing disclosure pressure isn’t the same as providing pragmatic “how to” for characterizing and quantifying water-related business risks. Moreover, characterizing the risk is only the beginning. The real challenge for companies is how to strategically prioritize risks and opportunities, build necessary competencies, and drive local water management plans. Why is water such a challenging, and potentially paralyzing, business issue you ask? Consider these factors:
- Nearly every activity, product, or business transaction uses water in some form – yet, there is no substitute;
- Water is both a local and temporal issue with potentially widely varying conditions (e.g., floods and droughts can occur in nearly the same location);
- Water, in general, is difficult to bound, measure, transport, and define access rights;
- It’s challenging to justify water-related strategic or capital investments based upon traditional ROI calculations;
- Cross-functional participation and solutions are required, including engagement up/down a company’s supply (value) chain; and,
- It is widely considered a human right, placing it in the sweet spot for media, political, and stakeholder attention.
- Start or accelerate a water strategy soon and possibly stay “ahead of the curve” thus determining your own pace of implementation; or
- Do the Basics – hedge your bets that water will not directly impact your company and expectations will stagnate. Given that water appears to be a resilient issue, companies that hedge could face monumental leaps to catch up to peers and meet stakeholder expectations in the near future, especially given the complexity and location-specific aspects. The cost of inaction could be significantly higher than self-paced implementation.
- Publications - recently published materials appear to be trending towards standardized buckets of water risk: Physical; Regulatory; Reputation; Investment. This has translated the business risks into simplified, real world concepts for a wide-range of stakeholders and investors to more easily comprehend and formulate inquires.
- Surveys – increasing number of non-governmental and supply chain surveys, including the second annual CDP Water Disclosure Project questionnaire, have significantly increased transparency of existing corporate strategies and knowledge gaps.
- Corporate Reporting – more companies are reporting water metrics, as well as water footprints, product life cycle assessments, and intensity indicators.
- Initiatives – water-focused NGOs and collective action partnerships have increased exponentially in recent years ranging from advocacy to standard development.
Topics:
Sustainability
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About the Author
Nick Martin
Antea Group
Nick Martin is Vice President, Corporate Sustainability at Post Holdings, Inc., a consumer-packaged goods holding company operating in the center-of-the-store, refrigerated, foodservice, food ingredient and convenient, nutrition food categories. Post owns Post Consumer Brands, Michael Foods, Weetabix, Bob Evans Farms, and partnership investments in other businesses. Nick leads Sustainability and Environmental, Social and Governance (ESG), including overseeing enterprise-wide strategy, goal setting, implementation across businesses, and disclosures. Prior to joining Post Holdings, he was the Sustainability Practice Group and ESG Strategic Advisory Services Leader at Antea Group, a global consulting firm. He brings diverse skills and solid credibility to his role with more than 25 years of ESG and sustainability experience spanning government (Overseas Private Investment Corporation), non-government (Global Environment & Technology Foundation) and consulting to a wide range of industry clients (Antea Group). He also served as Executive Director of the Beverage Industry Environmental Roundtable (BIER) for many years and as a technical advisor to various industry initiatives and standard setting organizations. Nick lives near Denver, Colorado with his wife and two teenage sons.