Water management innovation in China

NON‐PROFIT ∙ INDUSTRIAL Water Management Innovation in ChinaSOCIAL INNOVATION PLAYBOOK SERIESeden strategy institute

Water & Sanitation are central to sustainable development “If water and sanitation are central and you fix it, then the rest of the eco development happens on their own – good education, good health and citizens who go to work. It’s kind of a virtuous cycle that flows on its own and water and sanitation is the central key to unlock that potential. Leaders have to make that choice to do something about it, because it is a huge challenge.” Professor Seetharam Kallidaikurichi Director, Institute of Water Policy, LKY School of Public Policyedenstrategyinstitute.com 2

WatSan shortfalls will inhibit China’s long‐term economic growth Provinces in China Hailar HEILONGJIANG Provinces experiencing Oiqihar 353,000 Harbin water shortage Karamay people NEI JILIN suffering 2.5m MONGOL Changchun Yining Urumqi from water people lack (INNER MONGOLIA) shortage drinking Shenyang LIAONING Kashi water Hohhot BEIJING XINJIANG Beijing TIANJIN Dalian Yumen Tianjin HEBEI Yinchuan Taiyuan Shijiazhuang Yantai NINGXIA Jinan Yellow Golmud SHANXI SHANDONG Sea Xining QINGHAI Lanzhou Shiquanhe Worst YANGTZE GANSU Xian Zhengzhou JIANGSU drought in SHAANXI HENAN XIZANG (TIBET) RIVER Hefei Nanjing 60 years Shanghai SHANGHAI SICHUAN ANHUI HUBEI Hangzhou “2/3 of Chinese Chengdu Wuhan ZHEJIANG CHONGQING Lhasa Nanchang Chongqing Changsha East China Sea JIANGXI HUNAN Fuzhou 2m people short of drinking water; Kunming GUIZHOU Guiyang FUJIAN Xiamen cities are short YUNNAN GUANGXI GUANGDONG 0 500 Kilometers 80% of farmland affected by drought Nanning Zhanjiang Guangzhou Hong Kong Macau of water” 0 500 Miles Haikou 709,000 ha farmland South China impacted; 120,000 ha of crops Sea Chen Lei, Minister unharvestable for Water edenstrategyinstitute.com Resources 3

… with per capita water resources at 28% of the global average 100m cu. m China: Water demand and supply 20% China’s share of world population 6% China’s share of global freshwater resources 20m China’s population with no sanitation accessedenstrategyinstitute.com 4

Immense upside in water efficiency exists in its agricultural sector 100m cu. m China: Competing uses of wateredenstrategyinstitute.com 5

.. if good practices for water sustainability are adopted Ensuring supply. Reverse osmosis; Understand water Aquifer recharge; economics. Reflecting true Water source cost of reliable, potable protection; river Engage key Regulatory reform. water; calculating water linking projects; dam stakeholders. Water rights, footprint; matching & reservoir; Governments, tariffs, quotas, quality‐adjusted supply rainwater harvesting conservationists, pricing, standards financiers, farmers, with demand; identifying food processing, water stressors factories, technology providers Consumption productivity. Dry cooling / lubrication; Transportation contouring; rain‐fed crops; soil moisture monitoring; Wastewater reuse. Purposes of gray‐water purposes (e.g. industrial $ irrigation scheduling; processes), Financing. Determine efficiency. Closed microsprayers; drip cost benefit of water biotreatment, quality of irrigation to reduce irrigation; mulching; smart sustainability industrial effluent transportation losses; meters; retrofiting taps/ investments & new canal lining; leakage showerheads, dishwashers, financing models detection; footpumps dual flush toilets (e.g. microfinancing)edenstrategyinstitute.com 6

Two major WatSan trends are shaping stakeholder expectations 1. Shift from subsidy‐driven to market‐driven approaches • 10‐30bil of investments needed annually to meet Millennium Development Goals • Shift emphasis from giving direct aid to creating watsan markets, thereby reducing the need for never‐ending subsidies. 2. Increasing focus on governance issues • Water problems are more management‐related and not supply‐related • Global water shortages can be solved with existing knowledge, technology, policies, and good practicesedenstrategyinstitute.com 7

Even NGOs need to articulate a clear vision Case study • Took 5 years to develop a set of standard program metrics • Transformational Development Indicators (TDI) 2010 Frame provides credible, standardized impact data • TDI now used: • To develop and monitor national strategies and plans • For advocacy • For marketing • Also launched global exercise to craft new vision • Working group only formed in 1997 after WorldVision was in existence for 50 yearsedenstrategyinstitute.com 8

… to decide on possible roles in the murky WatSan ecosystem Advocate Lobby decision makers to make policy improvements to address systemic issues Capacity Building Management & Technical skills Grant Maker Toilet 2.0 Channel funds from donors to beneficiaries Financing Access to Capital Catalyst Broker exchanges among various stakeholders to unleash bottlenecks and bridge gaps Technology Innovation & Transfer Implementer Execute field programsedenstrategyinstitute.com 9

… so as to ensure performance against a systematic mission roadmap VALUE CREATION  Market analysis to identify social need Sweet OPERATIONAL Spot LEGITIMACY & CAPACITY SUPPORT  Competency analysis to  Stakeholder define core competencies analysis to engage right partnersedenstrategyinstitute.com 10

Questions to consider 1. To what extent are our business operations dependent on reliable sources of clean water in the territories where we operate? 2. What is the true cost of our water footprint? 3. Who are our stakeholders as far as our water security is concerned, and what forms of partnerships can we consider? 4. Do we need to lobby for regulatory reform? 5. What are the long‐term stressors to our water supplies? 6. Can technologies to optimizing our water usage be a source of competitive advantage for us? 7. How should we think about making capital investments when innovating for water management?edenstrategyinstitute.comedenstrategyinstitute.com 11 11

ABOUT EDEN STRATEGY INSTITUTE Asia’s leader in Social Innovation Consulting What we do. Eden Strategy Institute approaches the global issues of disease, poverty, illiteracy, and exploitation head‐on, by formulating strategies, models, processes, products, and designs that help our clients create, realize, and sustain quantum profit in addressing these issues. We focus exclusively on empowering business strategies with Social Innovations that create enduring financial impact, such as Silver Hair Marketing, identifying Bottom‐of‐Pyramid segments, creating Ethical Supply Chains, Microfinancing, Energy Efficiency, Socially Responsible Investing, Policy Planning and Advocacy, and so on. Eden’s Non‐Profit & Industrial Practices. Eden has experience spanning the entire Non‐Profit value chain, from advocacy and capacity building, to fundraising and implementation. We help organizations in the Industrial sector grow their scale, improve their operational efficacy, build distribution hubs, manage their trading networks, plan for compressed capital equipment cycles, and defend against grey markets. We have an extensive network of contacts with the entire non‐profit ecosystem across Asia‐Pacific, including fundraisers, corporate donors, government agencies, multilateral organizations, NGOs, and charities. We also have extensive knowledge of Heavy Industrial Equipment, Precision Engineering, and Control System Technology; Logistics services and Transportation infrastructure; Resources, Materials, and Waste Management; as well as Responsible Manufacturing Processes and Packaging Design Sustainability expertise. Eden brings sustainability to the Non‐Profit sector by supporting public sector organizations in their journey to better serve the changing needs of their constituents, by importing private sector practices such as competitive strategy, innovation, and performance management. We regularly advise on policy reform and help governments plan and set up industry blueprints and ecosystems, urbanize communities with infrastructure development, correct market failures, allocate resources, accelerate trade and development programs, advocate causes and lobby for regulatory approvals, make grants and raise funds, drive for results, and forecast the economic and social impact of governmental and non‐profit interventions. Our philosophy. We believe in the power of ideas to positively shape our world, one client at a time. Our focus is unparalleled in bringing to bear our entire senior management team, as well as the world’s foremost experts, on our clients’ most pressing sustainability issues. In turn, we elect to only collaborate with clients who are seriously committed to creating value together. edenstrategyinstitute.com 12

Thank youeden strategy institute Enquiries: Calvin Chu, Partner E: calvin@edenstrategyinstitute.com T: +65 9751 5817 64B Pagoda Street Singapore 059223 www.edenstrategyinstitute.comedenstrategyinstitute.com 13

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Water management innovation in China

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