WATER SCARCITY AND YOUR BUSINESS HOW TO ASSESS THE IMPACT AND MAKE - - PowerPoint PPT Presentation

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Mar 03, 2023 187 likes •404 views

WATER SCARCITY AND YOUR BUSINESS HOW TO ASSESS THE IMPACT AND MAKE INFORMED DECISIONS Emilio Tenuta Josh Henretig Vice President of Corporate Sustainability Senior Director of Environmental Sustainability A Pathway to Business Resilience

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WATER SCARCITY AND YOUR BUSINESS

HOW TO ASSESS THE IMPACT AND MAKE INFORMED DECISIONS

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Josh Henretig Emilio Tenuta

Vice President of Corporate Sustainability Senior Director of Environmental Sustainability

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Context

Water challenges impact growth and brand reputation
Market pricing does not reflect water’s full value
Effective corporate water strategies needed to drive growth

Relevant Insights & Practical Application

The business case: need to account for water risk
Taking action: creating & activating a corporate water strategy
Informing decisions: Water Risk Monetizer for smarter water

management (demo)

A Pathway to Business Resilience

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Stricter water policies in developed and emerging economies
Financial implications to industry
Tighter ground water and quality requirements
New UN Sustainable Development Goals have defined water targets
Reputational risk exposure and license to operate issues
Water scarcity risk mitigation plans and performance
81% of S&P 500 index companies issued corporate

sustainability reports in 2015, more than ever before

Lack of road map and tools to understand risk exposure

Increasing Regulations Growing Public Pressures Rising Investor Disclosure Shift to Supply Chain Water Risks

Global Business Water Risk Trends and Challenges

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Unprecedented demand on the world’s limited fresh water supply

Increased demand for goods and services 50% more people by 2050 Population growth, urbanization, growing middle class Demand exceeding supply by within two decades

40%

Unprecedented demand

n world’s water supply

4 billion more consumers in cities by 2025 Requiring 2.5 times more water per capita than rural areas

47% of the

global population

will be living in areas of high water stress by 2030

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Companies need to understand the full value of water to their operations

Water Bill Sewer Bill Water Basin Availability Operational Water Costs Reputational Risk Water Basin Quality Regulatory Risk Effluent Water Quality

 Perception that water is

cheap and accessible

 Full value of water generally

much higher than users realize

 Limited awareness of water as

a material business asset

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Incoming water price per m3 Outgoing wastewater price per m3

Water is undervalued: Prices inverse to risk ($ per m3)

Chengdu $0.34 $0.15 Amsterdam $2.78 $2.02 Barcelona $2.50 $0.20 Istanbul $1.82 $0.84 Addis Ababa $0.14 $0.03 Johannesburg $0.52 $0.85 Rio de Janeiro $0.89 $0.89 Sao Paulo $0.80 $0.80 Chicago $1.01 $1.01 Los Angeles $1.77 $1.50 Dallas $0.80 $1.60 Monterrey $0.77 n/a Mumbai $0.18 $0.05 Beijing $0.59 $0.22 Seoul $0.55 $0.27 Phnom Penh $0.16 $0.02 Shanghai $0.31 $0.25 Sydney $2.21 $3.00

Sources: WRI Aqueduct, GWI 2015

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The world’s largest, fastest growing economies face increasing water risk

Top 10 Largest Populations Top 10 Fastest Growing Economies Top 10 Biggest Economies

Cities experiencing water scarcity or current drought

Los Angeles Rio de Janeiro New York London Mumbai Delhi Beijing Tokyo Shanghai Osaka Jakarta Seoul Manila

Karachi

Sao Paulo Shenzhen Guangzhou Lagos Bangkok Paris Chicago Dhaka Moscow

45% of total GDP ($63 trillion) will be at risk due to

water stress by 2050, which is 1.5 times the size of today’s entire global economy*

Water scarcity could lower the GDP of some

countries by 6% by 2050**

Sources: Aqueduct, WRI, GWI, Trucost *International Food Policy Research Institute **World Bank Updated 2017

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Decreasing supplies of fresh water in the world’s largest and fastest growing regions Diminishing water quality is impacting available fresh water supplies

Quantity + Quality = Scarcity = Business Risk Scarcity is a function of quantity + quality

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1% 17% 4% 8% 32% 5% 2% 3% 11% 9% 2% 9% 2%

Technology

More companies are reporting potential impacts of water scarcity on revenue

Healthcare Travel & Leisure Telecom Services Utilities Automobiles & Parts Construction & Materials Chemicals Basic Resources Food & Beverage Oil & Gas Industrial Goods & Services Personal & Household Goods

Source: Trucost; CDP Water Disclosure Data, 2016

202 companies publically disclosed to investors that water scarcity (declining availability and incoming water quality) threatens 1–6% of their annual revenue. The number of companies that disclosed revenue at risk in 2016 is over six times more than the number of companies that disclosed revenue at risk in 2015 (33 companies).

CDP Disclosed Revenue at Risk (2016)

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IDENTIFY OPPORTUNITIES

Assess operational

pportunities for water

conservation

VALUE & PRIORTIZE

Leverage data to make the business case, measure impact and determine eROI

ACTION PLAN

Execute water reduction strategies

ASSESS & MONETIZE RISKS

Develop a site-level

r enterprise risk

profile

Companies need to adopt a “License to Grow” approach to water management

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www.WaterRiskMonetizer.com

First-of-it’s-kind, publicly available financial modeling tool helps businesses incorporate water risks into business decisions and planning

Businesses increasingly face global sustainability and water challenges that impact growth and brand reputation The Water Risk Monetizer can help businesses:

Assess water related risks at a site and

enterprise level

Make the case for proactive water

management strategies

Prioritize locations for investment based
n water scarcity risk
Understand the full value of water to an
peration

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leading platform and productivity company for the mobile-first, cloud-first world global leader in environmental data and risk analysis, part of S&P Dow Jones Indices global leader in water, hygiene and energy technologies and services

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Leveraging data to inform business decisions

Outgoing water risk: monetary value of the impacts of outgoing water pollution on human health and ecosystems and the future costs of water treatment Incoming water risks: monetary value of the impacts of incoming water use on human health and ecosystems and the future costs

f incoming water treatment

Application and Analytics

Incorporate a risk-adjusted cost of water and potential revenue loss into analysis Make the case for proactive water management strategies Identify operations/locations at greatest risk Monetize rate of return for water management improvement projects Select where and how to increase production or meet demand in new regions

Informing Business Decisions

Potential revenue at risk: monetary value of the impacts of water availability based on water required to do business Actionable information

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Demo

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Understand water-related risks and business impact in the places where we operate Increase accountability and improve

ur water use

Drive local engagement and stewardship Advance innovative solutions to water challenges

1 2 3 4

Microsoft’s Water Stewardship Focus

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1 million+ servers • 100+ Datacenters in over 40 countries Microsoft’s global datacenter footprint

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Cooling Chillers · Air handling Operations Provisioning · Monitoring · Security

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Reducing Fresh Water Use in San Antonio, TX

Risk adjusted price = 11x
$140,000 in water cost savings
Avoided 60 million gallons of potable water

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Visit www.WaterRiskMonetizer.com Use the Water Risk Monetizer to inform your corporate water strategy Contact us for more information or assistance

The need to understand water-related risks and rethink operations to be less water-reliant has never been more important. The Water Risk Monetizer can help.

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