Water risks for business still underestimated

Munich, January 31, 2011: By 2030 the water demand will not only surpass today’s capacity by 40% but also means a huge challenge for companies to ensure their production processes. Therefore, entrepreneurs can no longer ignore the existential threat due to declined resources.

Munich, January 31, 2011. There is no end in sight to the floods in Australia. La Niña has not only had massive climatic effects on Australia, but has also hit parts of the global economy hard. Over half of the coal mines in Queensland have meanwhile been paralysed,
which has unforeseeable consequences on international markets and steel production. Alongside of rising steel prices, power companies fear high price hikes in steam coal, important for generating power. Furthermore, the floods have affected other raw materials, such as wheat and sugar. A completely different picture of the resource water emerges when we look at the increasing escalation of conflicts about water in arid and semi-arid regions of Asia and Africa. The water situation there will continue to worsen in the coming years. This
also affects Europe. Parts of southern and eastern Europe are drying up, the ground water table is sinking, and the supply of water is dwindling.

Various risks for companies
As a consequence thereof, the increasing risks for companies are obvious. Companies that are directly or indirectly dependent on a continual supply of water face new challenges. Thus we confront the rise in water costs on location mostly with investments in the reduction of water consumption. Along with rising costs, we must also consider physical threats in our assessment of risks. Poor product quality or diminished availability of raw materials along the supply chain are some examples. Threats to reputations are also playing an ever-increasing role, especially when products are imported from regions with insufficient water supplies. Along the same lines, distortions of competition also belong to the risk portfolio. A fruit juice manufacturer dealing with a water shortage, even when equipped with water efficient technology, will always be at a disadvantage to competition from water-rich regions.

According to SusCon organiser Udo Censkowsky, Director of the international consultancy Organic Services, many companies are behind in their assessment of risks. “In the future, there will be extreme cases where some companies quite simply will have to face whether
they can even continue production or if they must shut down operations due to water shortages.”

At present, the water footprint concept records a virtual ‘water footprint’ for each product in the supply chain. This concept can be used with entire nations. For example, Great Britain’s national water footprint consists of 62 per cent virtual water in the form of textiles, paper or meat imported from foreign countries. In comparison, the virtual water balance in Germany is approximately 50 per cent. Agriculture and forestry, and their corresponding economic sectors, are important factors in virtual water use. Worldwide, 70 per cent of abstracted water is used for irrigating agricultural products, which end up in shops in the form of food, clothing and other consumer goods. All too often, however, we overlook other sectors that are affected. The energy sector uses an immense amount of water. Increasing percentages of the energy supply are dependent on water power. Power plants (from nuclear to solar thermal) require large amounts of water for their cooling systems. In particular, the PV (photo-voltaic) and mining industries depend on the availability of high quality water. In mining, for example, water is needed to extract metals and other raw materials out of the rocks.

Economy searches for water solutions at SusCon 2011
SusCon 2011 will highlight the risks of this key water shortage issue affecting our future. The conference aims to sensitise companies and develop specific sustainable solutions.

The problem of dwindling water resources will be discussed at a corporate level as well as a state level. Financing plans as well as coordinating areas of action in climate, soil and biodiversity conservation will be discussed alongside of water conservation and the
associated innovative technology. The Australian National Water Initiative (NWI), among others, will introduce solutions to the participants at the conference. The water trading programme for water usage rights has shown not only a substantial reduction in water usage, but also a reduction in the corresponding costs.

That Europe loses, for example, 40 per cent of its expensive drinking water through leaks in the piping system is just an indicator showing the way forward with options for action. These and other key topics are part of this year’s sustainability symposium in Nuremberg addressing a broad audience of market players, NGOs and politicians.

For further information and interview opportunities please contact:
Udo Censkowsky, Organic Services: +49 (0)89-82075902, u.censkowsky@organic-services.com
Bernward Geier, COLABORA: +49 (0)2245-618652, b.geier@colabora-together.de
Fritz Lietsch, forum Nachhaltig Wirtschaften: +49 (0)89-74661111, f.lietsch@eco-world.de

SusCon 2011
The “International Conference on Sustainable Business and Consumption“ takes place for the third time in 2011 at the Nuremberg trade fair exhibition site. From 28th to 29th June 2011, businesses, NGOs and politicians will exchange ideas about the question of scarce water and soil resources. New business models such as social business and innovations such as concrete activities to conserve these resources will top the agenda at this conference. Around 270 people from 28 countries working in business, politics, NGOs and the media participated at SusCon 2010. More information is available at www.suscon.net.

Press Release: German / English