Is Water The New Carbon?

Companies face increasing pressure to disclose, as well as optimize, water use.

By Mark Rosenzweig, Editor in Chief

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The rising cost and tighter regulation of water, coupled with concerns about adequate long-term availability in many regions, is prompting many chemical companies to treat water conservation as an imperative in their sustainability efforts, as our March cover story highlights.

"State of Green Business 2011," a report released in early February by GreenBiz.com and downloadable via www.greenbiz.com/business/research/report/2011/02/01/state-green-business-report-2011, trumpets the trend. In a section titled "Water Footprinting Makes a Splash," it notes: "Water has been rising as a sustainability issue… we've referred to it as 'the new carbon' due to its parallels to companies' efforts with their greenhouse gas footprint: understanding and measuring it, reducing it, even offsetting it to the point of being 'neutral.'"

So is water the new carbon?

Yet, the report points out that accounting for water can be even tougher than accounting for carbon. The amount of water used to make a product can vary significantly depending up where a plant is located and the process it uses. In addition, analyses should consider the source and quality of the water.

Nevertheless, the report stresses: "Despite the complexity, companies are finding that conducting a water footprint analysis can help them seek opportunities for efficiency and optimization. It can also lead to innovation." It adds: "Growing pressures to disclose water footprints -- much as companies have done with their carbon footprint -- will lead many companies to dive in."

Some of that pressure stems from an initiative of the Carbon Disclosure Project (CDP), London (which around 3,000 organizations from 60 countries use as a conduit for disclosing their greenhouse gas emissions). In 2010, it launched CDP Water Disclosure.

Paul Dickinson, CDP's executive director, summarizes the thinking behind the effort: "So is water the new carbon? In the sense that water presents an equally pressing challenge to the long-term sustainability of business, yes it is, and the need for greater transparency and access to high quality information to inform and improve decision-making is just as vital. As companies have repeatedly demonstrated with carbon, what they measure they manage. Thinking about challenges in a strategic way will enable them to mitigate risks and identify opportunities, putting companies in a far stronger position to navigate a water-constrained world than would otherwise be the case."

Dickinson adds, "In other respects water is very different from carbon. Whereas sustainable alternatives to carbon do exist, for water there is no substitute. The challenge therefore lies in managing what we have among competing users, be they businesses, communities or ecosystems. Those competing users or 'rivals' (from the Latin for a neighbor who shares a stream) are linked by the geography and politics of their local water systems, making water a local rather than a global management issue, even if its impacts can be felt across the world through the displacement of populations and higher commodity prices.

"CDP Water Disclosure's goal is to make meaningful, systematic and comparable reporting on water a standard corporate practice globally, enabling investors, companies themselves, governments and other stakeholders to put this data at the heart of their decision-making."

The group sent its first annual water questionnaire to 302 of the world's 500 largest companies (according to the Financial Times' "Global 500" rankings), and got 175 responses. "The strong response rate in this inaugural year is indicative of the high level of importance being placed on water by global corporations across sectors and geographies," notes the report summarizing the findings (available at https://www.cdproject.net/CDPResults/CDP-2010-Water-Disclosure-Global-Report.pdf).

The chemicals sector boasted the highest response rate -- all ten chemical companies surveyed (a group that includes Akzo Nobel, BASF, Dow and DuPont) provided inputs, compared to 17 of 21 pharmaceutical firms and just 15 of 51 oil and gas outfits. Besides presenting data, the report highlights best practices from companies in a number of industries.

Risks cited by chemical companies include: tougher regulation of water withdrawals and discharge quality, coupled with better contaminant-detection techniques, will boost treatment and management costs and make obtaining production licenses more difficult; and falling levels of both surface and groundwater will limit operation and expansion of facilities relying heavily on potable water.

On the positive side, the companies see opportunities to contribute to overall water availability through better water- and wastewater-treatment chemicals, water-efficient fertilizers, and processes and products to produce and recycle water.

In this green thrust one point is clear: How efficiently and sustainably a chemical company uses water ultimately will affect whether it sinks or swims economically.


Mark Rosenzweig is Chemical Processing's  Editor in Chief.  You can e-mail him at mrosenzweig@putman.net

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