Business Water Risk, Policy Engagement, and Collective Action

Business Water Risk, PolicyEngagement, and Collective Action Jason Morrison UN-Water “Furthering Water Cooperation” Conference Zaragoza, Spain January 9, 2013

The CEO Water Mandate: PurposeLaunched in 2007 in a partnership between companies and the UN GlobalCompact, the CEO Water Mandate is a business initiative dedicated toadvancing corporate water stewardship.Function1. The Mandate constitutes a call-to-action for companies to proactively advance their water stewardship practices2. It also provides a strategic framework, research, guidance, and tools designed to help guide this processValues and Assumptions Water crisis is increasingly a business issue Comprehensive sustainability strategies will be needed Sound implementation can benefit business and societies Collective action will be necessary

The CEO Water Mandate: Milestones 100 Total Number of 80 Endorsers 60 40 20 SE Asia Rio+20 0 Stockholm Workshops ConferenceSG Davos ConferenceWater Speech New York S. Africa Stockholm Investor Istanbul Conference Conference Conference Inaugural Action Conference Stockholm Copenhagen Marseille Conference Stockholm Constitution Seminar Conference Conference ConferenceQ2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q22007 2008 2009 2010 2011 2012 Endorser Joins White Paper: Corporate Survey Transparency UN-Water Climate and Water Online Framework Water Accounting CapacityLaunch Platform & Letter to Disclosure Water Policy White Paper: Website the G8 Policy Disclosure Engagement Human Right 2.0 Guide to Water

CEO Water Mandate WorkstreamsThe Mandate’s current activities generally work to advance threespecific components of corporate water stewardship:• Human Rights: Understanding and exploring corporate responsibilities and practices related to the human right to water and sanitation.• Disclosure: Encouraging meaningful, harmonized water-related reporting, while reducing corporate reporting burden.• Collective Action: Facilitating cross-sectoral partnerships between businesses and others that address shared risk and drive more sustainable water management.

Water-related Risk in the Value Chain Source: Treating Water, April 2, 2009, Robeco in collaboration with WRI

How Do Water Challenges Affect Businesses• Operational crises resulting from inadequate water availability or management capacity• Damaged social and legal license to operate in a specific location• Diminished brand value due to irresponsible or unsustainable behavior• Increased operational costs spent complying with relevant regulations, or for more expensive water and/or wastewater treatment• Lower investor confidence due to unstable or uncertain water availability and related management plans

Water Risk: Drivers and Influence Company - Water use efficiency - Wastewater treatment - Compliance - Impacts on communities and ecosystems Basin / Watershed - Water stress - Water pollution - Inadequate infrastructure - Lack of government capacity - Climate change - Lack of community access to safe drinking water Often, the greatest risks come from conditions over which the company has the least influence

Shared RiskBusiness risk Community risk• Disruptions to water • No access to safe supply for production drinking water• High cost of pre- • Not enough water to treatment maintain livelihoods• Perceived as • Susceptible to extreme contributing to weather events watershed challenges Unsustainable • Reduced ecosystem• New regulations / water services requirements conditions Civil society riskGovernment risk • Reduced biodiversity /• Not enough water to damaged habitat fuel economy • Depletion of natural• Basic human needs resources not met • Sustained poverty

What is policy engagement?Corporate water management initiatives thatinvolve interaction with government entities,local communities, and/or civil societyorganizations with the goal of advancing:1. Responsible internal company management of water resources within direct operations and supply chains in line with policy imperatives,2. The sustainable and equitable management of the catchment in which companies and their suppliers operate.

Business Case: Internal versus External Action

Example: Intel treats municipal wastewater in ArizonaIntel teamed up with the City of Chandler to devise a collaborative approachto water management that includes building an advanced reverse osmosisfacility to treat clean rinse-water from Intel’s manufacturing facility todrinking water standards before being returned to the municipalgroundwater source.Intel established an agreement with thelocal water authority to reclaim millionsof gallons of processed wastewater for:• the company’s cooling towers• air abatement equipment• onsite landscaping, and• irrigation for nearby farmland

Collective ActionShared risk creates a strong risk for collective action among companiesand others to advance sustainable water managementBenefits• Mitigates business risks in robust manner• Leverages collective strengths , resulting in more informed, better designed, and more durable outcomes• Builds legitimacy with stakeholdersRisks & Challenges• Exposes a company to a complex landscape of needs, interests, personalities, and organizational structures• Requires development of new skills, a nuanced view of the company’s productivity framework, and enhanced capabilities to collaborate

Collective Action Preparation and Implementation ELEMENT 1: ELEMENT 2: Articulating Water- Characterizing the Related Challenges and Interested Party Action Areas Landscape (Section 4.1) (Section 4.2) ELEMENT 3: Selecting a Collective Action Level of Engagement (Section 4.3) ELEMENT 4: Preparing for Collective Action (Section 4.4) ELEMENT 5: Implementation, Refinement, and Evolution (Section 5)

Characterizing Water-Related Challenges, Causes, and Risks Drivers of Water Water-Related CompanyWater Resource Management Challenges Interests State System Infrastructure Water Over- Economic Management Allocation Physical Risk Development and Funding Changes to Insufficient Water Direct quality, response to Supply/Sanitation operational quantity, or water Unreliable/ impacts or Water Demographic availability; management Unavailable concerned Governance and Regulatory Risk Shifts alterations to pressures community Regulation goals or and actors or Water Quality objectives requirements customers Deterioration Water Planning, Climate Reputational Management, Variability Flood Damage Risk and Pricing Ecosystem Social Norms Stewardship Degradation and Opportunity Expectations

Potential Collective Action Areasfrom the Water Action Hub• Efficient Water Use • Climate Change Adaptation and• Effluent Management, Wastewater Resilience Reclamation, Reuse • Ecosystem, Source Water• Community-Level Access to Safe Protection, Restoration Water, Sanitation, and Hygiene • Monitoring and Knowledge Sharing• Storm Water Management and • Engaging in Participatory Platforms Flood Control • Public Awareness and Education• Infrastructure Finance, • Improved Water Governance, Policy Development, Operation, or Development, and Implementation Maintenance• Sustainable Agriculture

Connecting Actions to Underlying Causes Water Water Water Flood Ecosystem Over- Supply Quality Damage Degradation Allocation Unreliable Deterioration Effluent Efficient Water Use Management/ Wastewater Inadequate Reclamation/Reuse Infrastructure Community Level Access to Safe Storm Water Management and System Water, Sanitation, and Hygiene Flood Control (WASH) Infrastructure Finance, Development, Operation, or Maintenance Sustainable Agriculture Ineffective Climate Change Adaptation and Resilience Water Management Ecosystem/Source Water Protection/Restoration Monitoring and Knowledge Sharing Engaging in Participatory Platforms Poor Catchment Public Awareness and Education Governance Improved Water Governance and Policy Development

Jason Morrison Pacific Institute www.pacinst.org jmorrison@pacinst.orgLearn more about the CEO Water Mandate and sign up for our mailing list at: www.ceowatermandate.org

Business Water Risk, Policy Engagement, and Collective Action

by United Nations Office to Support the International Decade for Action 'Water for Life' 2005-2015 on Jan 25, 2013

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Business Water Risk, Policy Engagement, and Collective Action Presentation Transcript