John Matthews, PhD johoma@aliance4water.org

January 16, 2015

Business contribution to managing water scarcity: tools and lessons

Threats of Scarcity

• Why is water scarcity so significant?• Water cannot be replaced

• Scarcity is relative – could be an issue of allocation,

governance, or quality

• Old problem with new manifestations• 20th century issues: demographic shifts, anthropogenic climate

change, agricultural changes, globalization

• 20th century issues: virtual water exchanges, drastic changes in

freshwater availability

• Solutions to new problems must be durable and flexible

Challenges to Practical Responses

• Efficiency is not a panacea• Does reduce systematic stress by decreasing competition

• Efficiency can create risks of its own• Confounds governance/allocation mechanisms

• Leads to technology ill-suited for some socio-economic or

operational contexts

• Not robust to a variety of scenarios (shifting environmental

conditions, demographic or economic changes)

• Can omit supply chains or critical systems

• Largest scarcity risks are embedded in supply chains/networks• Lack of dialogue and coordination is big challenge

Addressing Challenges – Developing and Using Tools

• Tools can be tangible and tactical or strategic and conceptual• Must always guide decisions and actions

• Three interconnected levels1. Facilities management and operations – proximal, short term,

local goals2. Process analysis – business operations or external systems3. Strategic goals, investments, and relationships – complex

tradeoffs between local operations and enterprise wide-priorities

Facilities Management and Operations

• Focus on efficiency analyses and most productive use of water

• Rapid and experimental decision making

At Target Field in Minnesota, facilities managers designed stormwatercollection system for reuse in irrigating and cleaning facility. Photo: Jeffrey

Thompson/MPR News 2011

Process Analysis

• Rwanda’s Rugezi Marsh Energy Bottleneck

• How does water enter into organizations?

Strategic Goals, Investments, and Relationships

• Scarcity as an investment issue

• How and where to develop

Former President of Germany, Horst Köhler, shaking hands with the current president of the Republic of Kenya, Uhuru Kenyatta at the

first ever East African German Business Summit in June 2014.

• Successful knowledge exchanges can occur through:• Peer to peer transfers, such as through like-minded business

networks and alliances

• Ambassadors between business sectors (e.g., energy and

agriculture)

• Translators between social sectors, such as academia, civil

society, and government

• Novel challenges present more difficulty

• Businesses must learn in advance of the problem

Where (and How) Can We Learn Lessons?

Technology: Desalinization to Meet Drinking Water Needs

• Abengoa developing membrane desalination• Costs affordable even for emerging economies

• Public-Private Partnerships in Algeria (3), Ghana,

Morocco, India

• Water projects using Project Finance (PF)

Governance: The Stewardship of Water AcrossComplex Supply Chains

• Case Study: Supply chains of major retailers in Africa and Latin

America and food producers in Australia• Alliance for Water Stewardship (AWS) - collaboration between

business/industry, farmers, communities, governments, civil society

organizations

• Examining water use of farmers in context of AWS Standard

• Businesses motivated by risk management needs or brand

reputation

• All stakeholders began to think on basin-wide scale of their

operations

Financing: Defining Investment Standards for Green Performance

• Green bonds – financial mechanisms for climate friendly

investments

• Water investments becoming more popular theme

• Climate Bonds Initiative and World Resources Institute,

Ceres, and CDP developing credible standard for green

water bonds

• Robust framework for issuing bonds provides

confidence in credible climate change solutions

Capacity Development: Mobilizing the Mining and Metals Industry Around Catchment-based Water

Management

• International Council on Mining and Metals (ICMM) – mission to

improve sustainable development in industry

• Created co-developed guide for members

• Identifying, evaluating, responding to catchment-based water

risks

• Encourages companies to develop their own water strategies

• Incorporates local context and hydrology

• Complements existing external initiatives/codes

Capacity Development: Managing Water Infrastructure over Long Timescales

• Long timescales of infrastructure do not align with timescales of

climate conditions affecting them

• Alliance for Global Water Adaptation (AGWA) creating Decision

Support System (DSS) that integrates emerging insights into long-

term sustainable water management guidelines

• Four major components:• “Bottom-up” approaches to vulnerability assessments

• Flexible decision pathways

• Incorporating engineering and ecological approaches to resilience

• Developing governance systems that work with shifting needs and

conditions

Many thanks!

johoma@alliance4water.org