The business opportunity in water conservation
For many companies, water efficiency is a long-term requirement for staying in business, a big commercial opportunity, or both.
DECEMBER 2009 • Giulio Boccaletti, Merle Grobbel, and Martin R. Stuchtey

Source: Climate Change Special Initiative

 
In This Article
Exhibit: By 2030, water supplies will satisfy only 60 percent of global demand on average.
Interactive: The water gap: Case studies
In a world where demand for water is on the road to outstripping supply, many companies are struggling to find the water they need to run their businesses. In 2004, for instance, Pepsi Bottling and Coca-Cola closed down plants in India that local farmers and urban interests believed were competing with them for water. In 2007, a drought forced the US Tennessee Valley Authority to reduce its hydropower generation by nearly a third. Some $300 million in power generation was lost.

Businesses everywhere could face similar challenges during the next few years. A larger global population and growing economies are placing bigger demands on already-depleted water supplies. Agricultural runoff and other forms of pollution are exacerbating the scarcity of water that is clean enough for human and industrial use in some regions, and changes in climate may worsen the problem. Scarcity is raising prices and increasing the level of regulation and competition among stakeholders for access to water. To continue operating, companies in most sectors must learn how to do more with less.

Achieving that goal is an opportunity as well as a necessity. Many of these same companies are developing products and services that can help business customers raise their water productivity. In agriculture, improved irrigation technologies and plant-management techniques are yielding “more crops per drop.” New approaches now rolling out will help oil companies, mines, utilities, beverage companies, technology producers, and others use water more efficiently. Closing the gap between supply and demand by deploying water productivity improvements across regions and sectors around the world could cost, by our estimate, about $50 billion to $60 billion annually over the next two decades. Private-sector companies will account for about half of this spending, government for the rest. Many of these investments yield positive returns in just three years.

Water as a scarce resource: An interview with Nestlé’s chairman

The chairman of Nestlé explains why water is “by far the most valuable resource on this planet” and what we must do to conserve it.