Business Session, WRM

1. John Matthews, PhD  johoma@aliance4water.org
January 16, 2015
Business contribution to managing
water scarcity: tools and lessons

2. Threats of Scarcity
• Why is water scarcity so significant?
• Water cannot be replaced
• Scarcity is relative – could be an issue of allocation,
governance, or quality
• Old problem with new manifestations
• 20th century issues: demographic shifts, anthropogenic climate
change, agricultural changes, globalization
• 20th century issues: virtual water exchanges, drastic changes in
freshwater availability
• Solutions to new problems must be durable and flexible

3. Challenges to Practical Responses
• Efficiency is not a panacea
• Does reduce systematic stress by decreasing competition
• Efficiency can create risks of its own
• Confounds governance/allocation mechanisms
• Leads to technology ill-suited for some socio-economic or
operational contexts
• Not robust to a variety of scenarios (shifting environmental
conditions, demographic or economic changes)
• Can omit supply chains or critical systems
• Largest scarcity risks are embedded in supply
chains/networks
• Lack of dialogue and coordination is big challenge

4. Addressing Challenges – Developing
and Using Tools
• Tools can be tangible and tactical or strategic and
conceptual
• Must always guide decisions and actions
• Three interconnected levels
1. Facilities management and operations – proximal, short term,
local goals
2. Process analysis – business operations or external systems
3. Strategic goals, investments, and relationships – complex
tradeoffs between local operations and enterprise wide-
priorities

5. Facilities Management and Operations
• Focus on efficiency
analyses and most
productive use of
water
• Rapid and
experimental decision
making
At Target Field in Minnesota, facilities managers designed stormwater
collection system for reuse in irrigating and cleaning facility. Photo: Jeffrey
Thompson/MPR News 2011

6. Process Analysis
• Rwanda’s Rugezi Marsh
Energy Bottleneck
• How does water enter
into organizations?

7. Strategic Goals, Investments, and Relationships
• Scarcity as an
investment issue
• How and where to
develop
Former President of Germany, Horst Köhler, shaking hands with the
current president of the Republic of Kenya, Uhuru Kenyatta at the
first ever East African German Business Summit in June 2014.

8. • Successful knowledge exchanges can occur through:
• Peer to peer transfers, such as through like-minded business
networks and alliances
• Ambassadors between business sectors (e.g., energy and
agriculture)
• Translators between social sectors, such as academia, civil
society, and government
• Novel challenges present more difficulty
• Businesses must learn in advance of the problem
Where (and How) Can We Learn Lessons?

9. Technology: Desalinization to Meet Drinking
Water Needs
• Abengoa developing membrane desalination
• Costs affordable even for emerging economies
• Public-Private Partnerships in Algeria (3), Ghana,
Morocco, India
• Water projects using Project Finance (PF)

10. Governance: The Stewardship of Water Across
Complex Supply Chains
• Case Study: Supply chains of major retailers in Africa and Latin
America and food producers in Australia
• Alliance for Water Stewardship (AWS) - collaboration between
business/industry, farmers, communities, governments, civil society
organizations
• Examining water use of farmers in context of AWS Standard
• Businesses motivated by risk management needs or brand
reputation
• All stakeholders began to think on basin-wide scale of their
operations

11. Financing: Defining Investment Standards for
Green Performance
• Green bonds – financial mechanisms for climate friendly
investments
• Water investments becoming more popular theme
• Climate Bonds Initiative and World Resources Institute,
Ceres, and CDP developing credible standard for green
water bonds
• Robust framework for issuing bonds provides
confidence in credible climate change solutions

12. Capacity Development: Mobilizing the Mining and
Metals Industry Around Catchment-based Water
Management
• International Council on Mining and Metals (ICMM) – mission to
improve sustainable development in industry
• Created co-developed guide for members
• Identifying, evaluating, responding to catchment-based water
risks
• Encourages companies to develop their own water strategies
• Incorporates local context and hydrology
• Complements existing external initiatives/codes

13. Capacity Development: Managing Water
Infrastructure over Long Timescales
• Long timescales of infrastructure do not align with timescales of
climate conditions affecting them
• Alliance for Global Water Adaptation (AGWA) creating Decision
Support System (DSS) that integrates emerging insights into long-
term sustainable water management guidelines
• Four major components:
• “Bottom-up” approaches to vulnerability assessments
• Flexible decision pathways
• Incorporating engineering and ecological approaches to resilience
• Developing governance systems that work with shifting needs and
conditions

14. Many thanks!
johoma@alliance4water.org