Is water the next carbon?

business mirror

SUNDAY, 09 JANUARY 2011 16:38 ANDREW WINSTON & WILL SARNI

Even though water is critical for the progress of industry and, of course, human life, few of us think actively about managing it. Of all environmental issues, it’s the least controversial; when there’s no more water in a given region, you don’t need scientists to prove it.

Companies must develop strategies for managing this important resource as water stress becomes the norm in many parts of the world. As a starting point, some organizations are now conducting “water footprints” to figure out where in the value chain their businesses are vulnerable.

Haven’t we been down this road before with energy and carbon emissions? It’s very easy to think of water as “the next carbon,” and many have, but these two resources aren’t really comparable. In the sense that businesses need to consider the risks and opportunities inherent in managing natural resources, they represent similar challenges. But there are also basic differences between the two:

* Carbon is fungible—water is not. The environmental issues stemming from the release of a ton of carbon are fundamentally the same anywhere on the planet.

* In contrast, geography and time are critical aspects of water availability and management. Ultimately, all water issues are local.

* Water has a strong social and cultural dimension. Many people believe in a “human right to water” which makes pricing this resource even harder than putting a price on carbon.

* Water is the ultimate renewable resource—but it’s important that corporations price water according to value and not manage it as a disposable commodity.

* Water, unlike carbon, is desired, beneficial and necessary.

Given these significant differences, it might be tempting to recommend that companies develop a stand-alone water strategy. Instead, businesses should integrate their water policy into their strategies concerning energy, carbon and other resources—all while navigating the differences between them.

How aware is your organization of its own water risks and opportunities? Now is the perfect time to answer such questions. It’s not too late.

Andrew Winston is the coauthor of the bestseller Green to Gold and the author of Green Recovery. Will Sarni is a director with Deloitte Consulting LLP and leads Enterprise Water Strategy for Deloitte’s Sustainability Services. He is the author of the upcoming book Corporate Water Strategies.