With the world population growing and the need for energy rising, water shortages are developing and threatening economic growth. What now?
Water is not just used to irrigate crops. It is also used to generate electricity and run industrial processes. Indeed, water and energy are inextricably linked as various segments of the economy compete for limited resources. Governments and businesses alike are now calling for concerted conservation efforts.
“Every company has a vested interest in water sustainability,” says Jonathan Radtke, sustainability director for Coca Cola, at a conference sponsored by Environmental Leader in Denver. “Then layer on water stress that tells us how much water is available compared to how much is being used. Parts of the world don’t have access to water and that creates problems with governments.”
According to the World Resource Institute, more than 1 billion people live in water-scarce regions. And, as many as 3.5 billion could fall prey to the same phenomenon by 2025. Pollution is degrading freshwater supplies while climate change is speeding glacier melts and intensifying floods.
The result? Water demand will outstrip the supply by 40%, adds McKinsey. It’s not just food and beverage companies that are heavily dependent on water. It’s also those companies tied to electricity generation, mining, high tech and pulp and paper. And many more industries could be impacted by such scarcity, it adds, because their supply chains are at risk.
“The fact is that water is critically needed for both energy production and for the growing of good — and EPA’s report on the the ‘Importance of Water to the U.S. Economy’ notes that 94% of our economy is based on this water-energy-food nexus,” says Susan Story, chief executive of American Waterworks Co., in an interview with the Water Environment Federation.
As for Coca Cola, water is central to its beverages and manufacturing processes. In 2003, it told the U.S. Securities Commission that water quantity and quality were its top concern.
But it has vowed to become more efficient and to manage the wastewater it releases from its plants. By 2020, the beverage maker aims to return to communities the amount of water it is using to make its products. By the same year, it was to improve the water efficiencies used in its manufacturing processes by 25%, from a 2010 baseline.
It’s not just good business. It’s good for the communities where it operates. In 2003, India withdrew Coca Cola’s license to use groundwater, saying it had diverted water for its own use, although an investigative body later said that the company had complied with all laws.
“We learned that we are part of a community and even if we are not impacting them, we have a responsibility to help them out,” says Coke’s Radtke. “We should have shared some of our water. We have a big brand.”
Similarly, MillerCoors has set 2020 water goals that it expects to save billions of gallons. Water is the primary ingredient that goes into its beverage, although the majority of the water associated with it is for barley growers, which harvest the components that go into the beer.
Marco Ugarte, sustainability manager for MillerCoors, told the Environmental Leader conference that the company’s main goal is to get its water-to-beer ratio down to 3-to-1. What that means is that it wants to use 3 gallons of water to produce one gallon of beer. With some 500 beer makers, he says that many are using 5-to-9 gallons of water to make one gallon of beer.
In 2015, the company cut its water usage across all breweries by 129 million gallons. It had a water-to-beer ratio of 3.29-to-1.
He adds that of the company’s water use, 10% goes into the beverages and 90% goes into the farming of the crops used to make the beer. To become more efficient, it is working with the Department of Agriculture to develop best practices that it shares throughout its supply chain.
“We had over a 30% water use reduction between 2015 and 2016 across farming operations, and that is because barley operations represent 90% of that footprint,” Ugarte said, in a separate Environmental Leader story. “The figures we will be sharing [publicly] are on the order of billions of gallons. That’s a significant amount of such a critical resource.”
Saving water saves energy, which in turn lessens CO2 emissions and mitigates the effects of climate change. And, just as companies are focused on limiting their energy use, they are also doing the same with regard to their water consumption. It’s a pursuit that will gain critical attention, especially with expanding populations that are exerting new pressures on finite resources.
