Creating business value through water

Water impacts companies’ bottom line

Water related risks affect business’ profitability and projected growth, it impacts the bottom line. Competition for water will increase, regulation will tighten and expenditures will rise. Investors and insurers are paying closer attention to water: credit ratings depend on water related risk and increasingly investors are demanding improved climate related financial disclosures.

Piet Klop, Senior Advisor Responsible Investment at PGGM - NLs second biggest pension fund – industrated this very clearly. PGGM includes environmental risks in their investment decisions to increase the positive impact of their investments on society. They are measuring the impacts of water investments through three key performance indicators: the volume of water savings, the volume of wastewater treated, and the number of people provided with clean water, to be able to invest with a purpose.

Industries implement water targets

I’m happy to see that more and more industries see sustainability as an important driver for their business. Many got their KPI’s on water efficiency in place. They focus on efficiencies at site level, like using less water in cleaning processes, optimizing production planning, or reusing process water. Like Robert van der Noordaa stated in his blog: water is such a big part of industrial processes, when managed right, it can not only improve sustainability, but also company reputation as well as reduce CAPEX and OPEX. And that adds up.

Some companies have set next level KPI’s: context based targets, which are KPI’s that differ per site and depend on the level of water stress. These companies make use of risk maps produced by the World Resources Institute. Their Aquaduct tool shows which regions in the world are most water stressed. This is a way for industries to make sure they invest in water efficiency in places where it’s needed most. Needed most for other stakeholders, the environment and for themselves.

Such analyses, together with other stakeholders, is a prerequisite for good water stewardship, allowing businesses to balance and forecast their water needs and the needs of communities and the natural world.

Digitalization strengthens industries

Industries are adopting digitalization fast, seeking to optimize their manufacturing process. Water related examples are an implementation of a virtual operator to (waste)water treatment facilities or tools to automate monitoring of sustainability KPI’s. Some industries also take next steps by implementing digital solutions to forecast the impact of weather related risk on multiple sites or even supply chains.
In short, digitalization will increasingly impact efficiency, sustainability and business continuity.

Hydroinformatics professor and KWR CEO Dragan Savic struck me with his visionary blog. He envisions a transition to industrial symbiosis: industries taking steps through circularity projects on innovative water, resource and energy solutions. This transition requires rethinking and redesigning of workflows, processes and business models. Dragan stressed the need for a solid base of horizontally integrated data and knowledge from industries and utilities alike to inform decision making at scale. This is a concrete elaboration of my closing statement in my last vlog: no one can deal with water stress alone. Industries, private parties and governments have to embrace the complexity of water challenges together.

It’s the people that make sustainability successful

For sure, sustainability needs to be incorporated in a companies’ strategy. And many companies have done so. Despite the obvious importance of water for people, nature and business, water turns out to be a challenging sustainability topic. Why? It is difficult to value water. It’s not easy to weigh water in a business case but it’s also about taking responsibility to make water top of mind.

It was great to read how Unilever inspired its employees to change their perception and behavior around water. They have implemented a change programme to make water understood. Part of this programme was a central digital platform to share monitored water data, an initiative to share best practices, and – interestingly – a tool to translate sustainability programmes into true financials savings. Additionally, they made it rewarding to show leadership on water through internal and external communications.

For me, this example underlines that it’s people that make sustainability successful.

Together, we enhance resilient and sustainable industries

We at Royal HaskoningDHV know the value of water, how it impacts your bottom line and about the changing external weather and climate factors impacting your industry, locations, physical assets, business processes and portfolios. We have introduced digital services to enable our clients to monitor, sense and respond more quickly to the cascading effects of disturbances in today’s complex delivery and production systems, to allow our clients to easier save or reuse water and to improve their water stewardship. Our aim is to protect your bottom line and secure your business continuity now, and in the future.

Want to improve on your business continuity and water savings?