When UN secretary-general Ban Ki-moon held a press briefing at the opening of the UN Global Compact Leaders Summit 2010 on Thursday in New York, he had Ajit Gulabchand, CMD, Hindustan Construction Company along with Accenture group chief executive Mark Foster and Unilever CEO Paul Polman for company.
Gulabchand was given the task of introducing the just-launched Framework for Responsible Engagement in Water Policy at the two-day event on behalf of the CEO Water Mandate, a public-private initiative launched by the UN to help companies formulate, execute and disclose water sustainability policies and practices.
The signal from the summit, which focuses on building a new era of sustainability, is clear. Prompted by the global climate change discourse exploring holistic ways to seek sustainability solutions in a world stuck with deadlocked climate negotiations, scientific controversies and public fatigue, forward-looking business leaders have started focussing on other sustainability issues like water in addition to carbon management, and India has a key role to play in it.
The idea is to shift from water management essentially a box-ticking exercise looking only at narrow direct operations issues like recycling to water stewardship encompassing areas such as a companys role and responsibility in local watershed management as well as engaging responsibly and transparently in public policy interactions to improve water governance. Says Gavin Power, head of the CEO Water Mandate: “India is on the frontlines in terms of issues around water access, quality and sanitation, and we hope to encourage all companies doing business in India to make water stewardship a priority.”
The new focus on water is also driven by an immediate self-interest ignited at companies when they view environmental hotspots more through a prism of how scarcity of natural resources is going to affect their operations and profitability rather than how they are causing global warming. It gets immediate traction for addressing sustainability challenges, including climate change.
A recent McKinsey report titled Charting Our Water Future notes that Indias current water supply is approximately 740 billion m3 against a projected demand of almost 1.5 trillion m3 in 2030.
Since businesses would be the first victims of water shortage, they are also the first ones to come up with solutions to address the challenge.
For example, when industries go for expansion, they don’t necessarily get more water supply. “Since it’s a regulatory issue, the only option for them is to increase water efficiency. That’s what companies like Shree Cement have been doing,” says Rakesh Bhargava, chief climate officer, Shree Cement. The first cement company in the world to get registration for a Clean Development Mechanism project, Shree Cement is also known for formulating water conservation standards and reporting procedures to help it in water management.
Similarly, Kirloskar Brothers, a Pune-based pump manufacturer, is seeking to focus on conservation of water, rainwater harvesting, recycling of waste water, cost-effective desalination technologies, preventing water leakage and better distribution mechanism, says Umesh Ulavi, vice-president, Water Resource Management, Kirloskar Brothers.
On the other hand, Jain Irrigation, an agro-processing and drip irrigation company, is taking a more nuanced approach and working with IFC to conduct water mapping for the group. Dilip Kulkarni, president of its agri-foods division, says: “The idea is to not only measure our water footprint, but also zero in on ways to reduce water consumption.”
“It’s prudent to look at not only carbon, but also pressure points beyond carbon and address environmental sustainability as a whole,” says Upendra Bhatt, managing director at cKinetics, a low-carbon venture accelerator. The focus on water is increasing because it is not only a high pressure point locally, but also a potential differentiator in exports, he adds. cKinetics has already launched a study to document greenhouse gases and water footprint of the Indian textile sector, adds Bhatt, who is also a co-founder of Intellecap, a social investment advisory firm.
Besides, focussing on water is increasingly being seen as addressing the impact of climate change. Carbon Disclosure Project (CDP), a UK-based NGO known for its inventory of carbon emissions of the world’s biggest businesses, has launched a water disclosure initiative, urging the world’s 300 biggest companies including Bhel, Indian Oil, ITC, Larsen & Toubro, NTPC, Oil & Natural Gas, Reliance Industries and SAIL from India, to make their water footprint public. Disclosure includes not only measuring water footprint but also weighing investment risks and exploring commercial opportunities by companies and their supply chains.
Explaining why CDP chose to become actively involved with water-related issues, Marcus Norton, head of CDP Water Disclosure, says, “CDP is a climate change organisation and it is through water that the impact of climate change will be felt.” In fact, his CEO, Paul Dickinson is on record having said, If climate change is the shark, water is its teeth.
Norton adds that CDP’s water disclosure initiative is driven by its two main stakeholder groups financial institutions and companies. Financial institutions are interested in the initiative because availability of water is being increasingly recognised as a material investment risk, but there is insufficient data to enable them to assess this risk. Companies are interested because CDP has helped many of them to manage greenhouse gases (GHGs) and they too recognise the challenges that water presents. CDPs water initiative claims support from 137 financial institutions including IDBI Bank, IDFC and Yes Bank, representing $16 trillion in assets.
Homegrown corporate initiatives too are underway. The CII-Sohrabji Godrej Green Business Centre has joined hands with the World Economic Forum to set up the Indian Business Alliance on Water. It’s being supported by USAID with help from UNDP. “The alliance is seeking to promote sustainable water management for the benefit of both businesses and communities,” says KS Venkatagiri, head of energy, environment and water management activities at the centre. “Water scarcity is not only a risk, but also a big business opportunity for water businesses,” he adds. Which is why, he adds, CII’s national awards for excellence in water management include a category for innovative water equipment makers. Only innovation can bring in a step change in water management in the coming water-stressed times, he adds.
Source: The Financial Express
Published on 27 June 2010