Image credit: Wilson Hui

Water is being added to the Paris mix

23/09/2017

It was World Water week at the end of August. We spoke to Morgan Gillespy, Head of Water at CDP about water challenges, and a new survey they have carried out that suggests a $9.5 billion opportunity from water projects in cities housing some 2/3rds of a billion people.


“Paris was weird on water,” Morgan Gillespy says.  “Virtually all the INDCs mentioned it under either mitigation or adaptation headings or both, yet it didn’t appear anywhere in the actual agreement.”

Morgan Gillespy: Head of CDP’s water program

Outside the formalities, though, Paris has, it seems, created momentum on water challenges.  Ahead of COP21, CDP along with the World Business Council for Sustainable Development (which brings business to the table on the SDGs), the UN Water Mandate and French utilities giant Suez launched the Business Alliance for Water and Climate, affectionately known as BAfWAC.

In its latest survey of members, CDP asked some specific questions on water, which have now been pulled into a usefully readable infographic. The report looks at what challenges cities face over water and who is trying to tackle them.

Nearly 2 in 3 cities foresee risks from water, in terms of both the extremes of quantity (scarcity and flooding) and in terms of quality, especially the pollution of supplies.  The main concerns are in Africa, Asia and Oceania.  Declining water quality can result from many things, whether occasional – such as oil spillages – or more systemic. “For example,” Gillespy says, “excess nutrients – from either fertilisers or manure – can impact water quality when it rains or when water and soil containing nitrogen and phosphorus wash into nearby waters or leach into ground waters.”

Fewer companies report water risks, but actually they face a wider range of them

Fewer companies (43%) than cities report foreseeing problems, but Gillespy points out that the risks to companies are in some ways wider than to governments, encompassing regulatory and reputational as well as operational risks. Citing an example of a company getting itself into hot water (though she didn’t use that terrible analogy), Gillespy mentions a case involving a new Coca Cola bottling plant in India, which was found to be destroying the livelihoods of local farmers by pulling water from sources they had traditionally used. “That was picked up by activist NGOs and became a major news story, with a brand-harming effect.”

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On the operational side, new water risks spring up from new technologies. “Manufacturers of IT equipment need very clean water for their production facilities, for example.  And larger solar farms, of the kind that are becoming more common all the time, need big quantities of water to cool them.  And where you have a lot of sunshine you often don’t have a lot of water.”

A lot of corporate mitigation activity is also linked to having secure sources of fresh water. Gillespy cites examples in Brazil and South Africa where companies took environmentally responsible decisions to use hydropower for their electricity, only to be forced by drought to return to fossil fuels, at a significant cost in terms of both moves.  In some cases, the links between water and energy become explicit, as General Motors Company found in Brazil. Drought pushed up water costs by US$2.1 million in 2015, at the same time as reduced availability of hydropower pushed up electricity costs by US$5.9 million. The company responded with increased water conservation efforts and energy efficiency measures[1].

Water needs a lot of co-operation and collaboration

Two key features that affect the financing of water projects, Gillespy notes, are that each one is different (affecting replicability), and that they depend probably more than most projects on collaboration.  Rivers, for example, can flow long distances, through different regions or even countries.  The same water tables often have to serve the very different needs of farmers and city dwellers.  But co-operation can lead to innovation and mutually beneficial outcomes.  Gillespy cites the example of a mine in Peru[2] that created a wastewater treatment plant to stop the expansion of its operations polluting a local river, keeping 25% of the water for its own processes needing clean water, but returning the rest – indeed better quality water than they had before – to the local community.

According to UNEP, there is a very large funding gap for the water-related SDG6, which donor institutions are increasingly saying will need to be filled by the private sector. Gillespy says that there is evidence that this is starting to happen, with solutions providers increasingly coming forward with innovations that reduce costs. For example, new technologies to fix leakages in old piping systems avoid the need for utilities to dig them up and replace them. “Leading companies are increasingly understanding the necessity of reliable water supply, so they are prepared to invest in it,” Gillespy says.

On the public side, a sibling of BAfWaC, imaginatively called GAfWaC (the Global Alliance for Water and Climate) is being funded by the  French government and others, to drive collaboration and aggregation of projects, as well as providing capacity building to help communities and developers navigate the often complex processes of major donors.  GAfWaC is the host for a database of local projects that complements the database of private projects BAfWaC keeps.  It will be reporting back to the COP each year on progress on these projects.

In its survey, CDP has found a $9.5 billion investment opportunity in the cities it looked at. “The key messages from our data”, Gillespy says, “are that many more companies are now reporting on their water use, and performance in the sustainable use of water is improving.  The market for solutions providers is going to grow, as climate action picks up and cities and companies start to collaborate more on their water issues.

Biography

Morgan is an experienced environmental and business professional, focusing on improving water security globally. Having joined CDP in 2013, she has been instrumental to the development and implementation of products and services relating to water as well as the analysis and synthesis of CDP’s water data. In 2016 she was named Head of Water, leading the program to ensure it remains the gold standard for disclosure of corporate water related information globally. She engages with companies directly over the water-related risks and opportunities they face throughout both direct operations and full value and aids with insight and advice on corporate water stewardship strategy.

She holds an MSc in Environmental Technology form Imperial College London, specializing in Environmental Assessment and Analysis.

[1] See page 16 of this report [Link: https://b8f65cb373b1b7b15feb-c70d8ead6ced550b4d987d7c03fcdd1d.ssl.cf3.rackcdn.com/cms/reports/documents/000/001/306/original/CDP-Global-Water-Report-2016.pdf?1484156313]

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