The economic incentives are already there for businesses to invest in
measures that protect their water security. As a recent report from the
World Business Council for Sustainable Development (WBCSD)
demonstrates, even local water shortages can have global effects. In
fact, WBCSD estimates that water shortages cost the global economy over
US$323 billion annually.
For businesses with high water needs,
such as food and beverage companies, the stakes are particularly high.
Consider the global beverage industry, which is expected to reach nearly
$2 trillion in value by 2021. A 2017 Trucost study showed that if
companies fully absorbed the full costs of water availability and water
quality impairment, this could equate to an average decline in profits
of 116% for food and beverage companies.
Of course, this will
likely never materialize, in large part because those very same
companies, including PepsiCo, AB InBev and The Coca-Cola company, are
taking a progressive approach to water stewardship, including investing
in nature-based solutions to protect the natural water sources their
operations and consumers rely on.
Similarly, utility companies could also see a decline in profits—up
to 44% according to TruCost—creating their own incentives to address water
security challenges at the source. New York City is one of the more
famous examples—relatively modest investments in landscape conservation
in the Catskills watershed avoided the construction of new treatment
plant that would have cost up to $10 billion to build and over $100
million a year to operate, and today the city boasts the largest
unfiltered water supply in North America.
like Veolia and Suez are taking these and other strategies to a global
scale. For example, in addition to investing in the conservation of
wetlands and forests as natural filtering systems, Veolia is developing
new nature-based solutions, such as using living organisms to detect and
remove pollutants from drinking water and recycling industrial
components to build artificial reefs.