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• Pick and choose which slides you want for your presentation
• Think about which questions you want to ask your audience (to inspire you, more questions are offered in the last slides)
• Contact WBCSD if you want any of the photos in higher resolution: [email protected]
Preparation of your PowerPoint Presentation
Please note that this is a Working Document!Version January 2007
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Business in the world of water
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Sample Agenda, e.g. 10:00 – 12:00
10:05 – 10:15Water & Business: an overview – Ms. X, Company X
10:15 – 10:50 Context and Presentation of the Scenarios
10:50 – 11:20 Breakout discussions in 3 groups
11:20 – 11:30 Feedback from each group
11:30 – 11:40Water & Scenarios within Company Y – Mr. Y, Company Y
11:40 – 12:00 Q&A and Close
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Objective of this Session
Understand water-business links
…by using scenario framework as a tool
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• 190 global network of international companies
• WBCSD objectives include: – Business Leadership– Policy Development – The Business Case – Best Practice – Global Outreach
Business Cannot Succeed in a Society that Fails
World Business Council for Sustainable Development (WBCSD)
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How much water will be withdrawn with respect to the amount that is naturally available?
Freshwater Stress is Increasing…Faster than Expected
---- 2005
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• License to Operate
• Climate Change Droughts Stranded Assets
• Increased Production Costs and Interruptions
• Community and Regulatory Pressure
• Health of Employees
• Brand Image
• Limitations to Growth of Consumer Markets
Water Risks to Business
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Introducing the WBCSD Water Scenarios
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Clarify and enhanceunderstanding bybusiness
Objectives in Building these Scenarios
Promote mutualunderstanding
…and support effective business action
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19 Leading multinational companies in diverse sectors:
• Oil and gas
• Food and beverage
• Mining and metals
• Consumer products
• Environmental & engineering consultants
• Financial
• Water services
WBCSD Water Program – Core Team
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WBCSD Scenario-Building Process
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Introducing Scenarios: Learning from the Future
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Understand the Scenarios yourself…
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Reflect on how you could use them in your company
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• Strategy is about what we ‘should’ do
• Scenarios explore what ‘might’ happen
Scenarios for Better Strategies…
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CurrentRealities
(mental maps)
MultiplePaths
AlternativeFuture Images
SCENARIOS
The Present The Path The Future
FORECAST
Scenarios versus Forecasts
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XPredictions
Projections
Preferences
Credible
Challenging
Coherent
…stories describing paths to different futures, that help us make better decisions today
What are Scenarios?
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Introducing the WBCSD Water Scenarios
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Complex Interplay of Local and Global Influences…
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Three Parallel Stories
Post-its for ideas on dilemmas
and business actions
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Key Story Themes
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HydroMore drops, more value per drop
2005 2010 2015 2025
Hydro
Eco
nom
y
Huge
Oppor
tunit
ies
In th
e Sha
dow o
f the
Olym
pics
Mor
e an
d M
ore
Meg
a Citie
s
China ranks fourth in the world for renewable water resources, but because of its large population, it has only 1/4 of the global average of water per capita.
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Unlocking Legacies of the PastP
hoto
: Nav
al S
afet
y C
ente
r
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Efficiency
Ph
oto
:©
Un
ileve
r
Over the last two decades, Eskom has introduced a number of innovative technologies to save
water. These include dry cooling, desalination of polluted mine water for use at the power stations, etc. In doing so, more than 200 million liters of
water are saved every day. E.g.: Dry cooling technology uses about 15 times less water than
conventional wet-cooled power stations.
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RiversSecurity for all… in terms of quality and quantity
2005 2010 2015 2025
Secur
ity D
efici
t
Trust
Defici
t
Loca
l Par
tner
ships
« Water management is, by definition, conflict management. »Worldwatch Institute, 2005
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Redistribution Challenge
Agriculture: 70%
Industry: 22%
Domestic: 8%
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2-sides: ‘Haves’ and ‘Have-nots’P
hoto
: © In
tern
atio
nal F
eder
atio
n of
Red
Cro
ss a
nd R
ed C
resc
ent S
ocie
ties
Aug 2006: Kerala, India ban on Coke and PepsiCo products after Centre for Science and Environment said they contained unsafe levels of pesticides. Six other states in India prohibited sales at or near schools, colleges and hospitals. Sep 2006: Kerala ban lifted by an Indian court due to inconsistencies in the group's analysis.
‘Coca-Cola India has always been completely confident of the safety of its soft drinks in India because they are produced to the same level of purity, regarding pesticides, as the EU criteria for bottled water (globally accepted as one of the most stringent in the world). ’
Sep 29 2006 The Coca-Cola Company statement, www.coca-cola.com
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OceanAccounting for the whole system
2005 2010 2015 2025
Uninte
nded
Con
sequ
ence
s
Global
Fair W
ater
Mov
emen
t
Wat
er F
ootp
rints
Networ
ked
Global
Gover
nanc
e
Approximately 37% of the global population (over 2 billion people) lives within 100 km (60 miles) of a coastline.
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Estimated water use by life cycle stage (%)
Unilever, 2005
Virtual Water – to produce one kilogram of…
1,300
liters
3,400
liters15,500
liters
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Unintended Consequences
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Climate change impacts accelerate….
Impacts of historical water overdrafts & ecosystem changes manifest
Security through interdependency emphasised
Accountability for ‘virtual’ water uses/impacts emphasised
2006
States enable economic value of water
Global market opportunity for innovative solutions
Rapid gains in efficiency
Social tensions/conflicts and rivalries over water increaseLegal and moral liabilities about access and responsible use flareNational security interests inhibit progress towards IWRM..Local solutions sought
Three Different Futures Could Unfold…
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Breakout Discussions – 3 Groups (30 minutes)
• What are the key dilemmas in Hydro/Rivers/Ocean?
• What actions do you recommend to deal with them?
Group 1 Group 2 Group 3
• Learn & share
• Report back
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For your Company, is Water a…
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What are you going to drink for lunch?
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Take Home Question
Considering the scenarios as a set, what do you now think are the biggest risks and opportunities for your business’ operations, investment decisions, products, or services in an increasingly water-stressed world?
“These scenarios highlight the complex interrelationship between
water, energy and food security and the need for a holistic approach to
water management.” Jeroen van der Veer, CEO of Shell
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EXTRA SLIDES
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• Clarify and enhance understanding by business of the key issues and drivers of change related to water.
• Promote mutual understanding between the business community and non-business stakeholders on water management issues.
• Support effective business action as part of the solution to sustainable water management.
Objectives in Building these Scenarios
Core Team: 19 leading multinational companies in diverse sectors:
Oil and gas / Food and beverage / Mining and metals / Consumer products / Environmental & engineering consultants / Financial / Water services
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Orientation
Scenario Building
Affirmation Application
Jan-Sept 2005 Oct 2005 Jan 2006 2006
Interviews Workshops:-Panama-China-Switzerland Research
Synthesis
Framework
Narratives
Focused analysis
Drafting
Test plausibility, challenge, relevance
Ownership
Communication
Sector strategies
Business awareness
Wider advocacy
New Initiatives
Collaborative action
Key Stages in the Scenario Process
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2005 – 2010: More and More Mega Cities
• Consume more and more water, leads to increasing water stress
2008 – 2010: In the Shadow of the Olympics• Positive press coverage ignores increasing tensions between
rural & urban (preferential treatment to urban and industrial)
2010 – 2015: Huge Opportunities• China opens up its market to outside companies in attempt to
bring best technologies; 5-yr plan to 2015, business is active participant
2015 – 2025: Hydro Economy• China is spinning its water cycle faster “more value/drop” –
Chinese solutions on global market take many by surprise
HydroMore drops, more value per drop
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HydroMore and more mega-cities & secondary cities
2005 2010 2015 2025
Hydro
Eco
nom
y
Huge
Oppor
tunit
ies
In th
e Sha
dow o
f the
Olym
pics
Mor
e an
d M
ore
Meg
a Citie
s
• Consume more and more water, leads to increasing water stress
• Unsustainable water demand: impossible to treat wastewater treatment by 2020, leads to industrial spills
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HydroBeijing Olympic Games 2008
2005 2010 2015 2025
Hydro
Eco
nom
y
Huge
Oppor
tunit
ies
In th
e Sha
dow o
f the
Olym
pics
Mor
e an
d M
ore
Meg
a Citie
s
• Positive press coverage doesn’t look at increasing tensions between rural & urban (preferential treatment to urban and industrial)
• Shortly after Olympics, water-related incidents gain international attention, e.g. car parts plant shut down due to over-extraction of groundwater
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HydroHuge Opportunities
2005 2010 2015 2025
Hydro
Eco
nom
y
Huge
Oppor
tunit
ies
In th
e Sha
dow o
f the
Olym
pics
Mor
e an
d M
ore
Meg
a Citie
s
China ranks fourth in
the world for renewable water resources, but because of its large population, it has only 1/4 of the global average of water per capita.
• 2012 instead of single way forward, China embarks on period of economic experimentation… government promotes innovation and supports best-in-class technologies & water management policies. China opens up its market to outside companies in attempt to bring best technologies.
• When develop 5-yr plan to 2015, business is active participant
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HydroHydro Economy
2005 2010 2015 2025
Hydro
Eco
nom
y
Huge
Oppor
tunit
ies
In th
e Sha
dow o
f the
Olym
pics
Mor
e an
d M
ore
Meg
a Citie
s
• China is spinning its water cycle faster: same amount of water used more often “more value/drop”
• By 2025: China known worldwide for cost-effective water solutions of all scales
• Ageing infrastructure in Europe: Chinese solutions on global market take many by surprise – those companies involved early got the advantage
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Unlocking Legacies of the PastP
ho
tos:
Na
val S
afe
ty C
en
ter,
ww
w.s
afe
tyce
nte
r.n
avy
.mil
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Unlocking Legacies of the Past
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Rebound effects – what you do with the energy you’ve saved
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RiversSecurity Deficit
2005 2010 2015 2025
Secur
ity D
efici
t
Trust
Defici
t
Loca
l Par
tner
ships
• By 2010, low-income and emerging economies often lack safe drinking water – but if they want clean water, they have to pay for it
• This leads to rich getting richer and poor getting poorer – citizens distrusts governments
• Also in developed world, old water systems results in greater costs – in 2015, for the 1st time, middle-class households struggle to pay for water bills
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RiversTrust Deficit
2005 2010 2015 2025
Secur
ity D
efici
t
Trust
Defici
t
Loca
l Par
tner
ships
« Water management is, by definition, conflict management. »Worldwatch Institute, 2005
• Increase media coverage – increased pressure on EU and US companies that operate in developing countries: taking water from poor for industrial, manufacturing or agribusiness use, which leads to boycotting
• But many governments use water policy as a way of asserting the right to deny access.
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Rivers2-gether
2005 2010 2015 2025
Secur
ity D
efici
t
Trust
Defici
t
Loca
l Par
tner
ships
• Business understands water security is not only efficiency & technology, but also policy – form public-private partnerships, PPP’s: the more business participates in helping shape water policy, more likely ensure own needs
• By 2010, recognize that water security closely tied to energy security (& food, & health…): energy needed for water, water needed for energy
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2005 – 2015:Security Deficit• Low-income and emerging economies lack safe
drinking water – if they want clean water, they have to pay for it
2010 – 2015:Trust Deficit• Increase media coverage – increased pressure on EU
and US companies that operate in developing countries
2015 – 2020:Local Partnerships• Increased number of PPP’s, business help shaping
policy
RiversSecurity for all… in terms of quality and quantity
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Security Deficit
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OceanAccounting for the whole system
2005 – 2015:Unintended Consequences• Asleep at the water wheel – more conferences, little action• Floods continue because of mismanagement of climate change and
mismanagement of ecosystems, deforestation in Asia, Rhine delta is under pressure
2010 – 2015:Global Fair Water Movement • « Need global standards to guarantee right to clean water for all
humans on planet »
2015 – 2020:Water Footprints• Drive for bio-fuels in Southern Europe increases pressures on scarce
water resources – companies start to report on their water footprint
2020 – 2025:Networked Global Governance• Companies with large water footprints engage in virtual water trading on
basis of fully priced externalities - emergence of water-based economic zones
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OceanUnintended Consequences & Fair Movement
2005 2010 2015 2025
Uninte
nded
Con
sequ
ence
s
Global
Fair W
ater
Mov
emen
t
Wat
er F
ootp
rints
Networ
ked
Global
Gover
nanc
e
• Lulling to sleep & Floods continue
• 2010: Africa & L. America complain that water is being used by rich-country lifestyles
• Large international food company – outsource growing & processing of chickens to Brazil – Brazilians suffer from exporting precious water while locals suffer shortages
• 2015: 5 confirmed cases of cholera in London: energizes Global Fair Water Movement
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OceanWater Footprint
2005 2010 2015 2025
Uninte
nded
Con
sequ
ence
s
Global
Fair W
ater
Mov
emen
t
Wat
er F
ootp
rints
Networ
ked
Global
Gover
nanc
e
• 2010 – companies report total volume of water used directly or indirectly (total accounting) (need tools)
Approximately 37% of the global population (over 2 billion people) lives within 100 km (60 miles) of a coastline.
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OceanNetworked Global Governance
2005 2010 2015 2025
Uninte
nded
Con
sequ
ence
s
Global
Fair W
ater
Mov
emen
t
Wat
er F
ootp
rints
Networ
ked
Global
Gover
nanc
e
• 2020: companies with large water footprints engage in virtual water trading on basis of fully priced externalities - emergence of water-based economic zones
• Need market mechanism & governments through legislation: Europe, US and Asia address true value of water & complete cycle – new laws
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Asleep at the Water Wheel – Flooding
Ph
oto
:©
UN
Ph
oto
/ S
op
hia
Pa
ris
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Natural Phenomenon – Sea rise
Pic
ture
: ©
Fo
od
an
d A
gric
ultu
re O
rga
niz
atio
n o
f th
e
Un
ited
Na
tion
s
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Interconnected
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Key Messages
• Technology is only part of the solution.
• Relevant innovation is driven locally.
• Business cannot buy its way out of water problems.
• Creating trust helps to secure the license to operate.
• Anticipate risks that stem from outside your current business model.
• Growing water issues and complexity will drive up costs.
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How do companies plan to use the scenarios?
• Test strategy (corporate, operations, product?)
• Raise awareness of water issues
• Multi-stakeholder dialogue
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Which legacies need to be unlocked to drive innovation?
Where else will cities face big water challenges?
What appropriate solutions can you see and reach?
What happens if the water ‘haves’ and ‘have not’ issues are ignored?
What constitutes ‘fair water’ uses and who will decide?
How can water conflicts be avoided?
What happens when the ‘whole system’ isn’t taken into account?
How can virtual water be made more transparent?
What are the tensions and trade-offs in managing water resources and allocation at local and global levels?
Discussion in Groups – 30 minutes
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Extra questions for discussion on ‘H’ – Hydro
• Which legacies need to be unlocked to enable more sustainable water practices and more appropriate solutions?
• Will further urbanization intensify the water crisis, or does it provide an opportunity to find a solution?
• If the quality, availability, or cost of water for your suppliers, yourselves, or your customers/consumers changed significantly (x2, x10) in the next 5, 10, or 20 years, how would your business be affected?
• How can businesses be encouraged to see water-related problems and constraints as opportunities for innovation and value creation?
• What are the dilemmas raised by the multifaceted efficiency challenge (more value per drop, more drops for less, less pollution and energy per drop, more jobs per drop)?
• Which sectors will need to take the lead in partnering with municipal and national authorities to ensure city solutions are agreed and implemented on a sufficiently fast and large scale?
• Where else are governments and their societies likely to respond with market-enabled solutions?
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Extra questions for discussion on ‘2’ – Rivers
• Whose water needs and what water uses will matter most?
• Will business be seen as a legitimate stakeholder in water allocation discussions and disputes?
• Who might be new partners or stakeholders in judging your business operations or in providing new and better solutions to grow your business?
• Can all conflicts over water be avoided – and, if not, where will the fracture lines first appear?
• To what extent can the legacy of corruption be overcome in water management?
• How do we allocate water fairly for all users in a community, not just the highest bidders?
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Extra questions for discussion on ‘O’ – Ocean
• To what extent can human and business activity adapt to new and evolving constraints imposed by the ‘big’ – or hydrological – water cycle?
• Can you assess your water footprint? What measures do you have in place to monitor water use? What do your competitors do? What is best practice?
• How will formal institutional arrangements give a voice to the ecosystem?
• When we solve a water problem upstream, how can we avoid unintended consequences downstream?
• How can more investment be mobilized to finance new innovative schemes for local water solutions?
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Business-focused questions
• How is your business dependent on water for its success today – upstream, midstream, downstream?
• Do you know and understand your water supply, treatment, and disposal context? Do you know the influential institutional and/or governmental individuals who deal with water in your business community?
• Can you assess your water footprint? What measures do you have in place to monitor water use? What do your competitors do? What is best practice?
• If the quality, availability, or cost of water for your suppliers, yourselves, or your customers/consumers changed significantly (x2, x10) in the next 5, 10, or 20 years, how would your business be affected? Do you consider water in your long-term strategic planning?
• What are the generic opportunities and threats in each scenario? Who is the prime mover – that is, which organizations and institutions are setting the standard?
• Reading the scenarios – ask yourself not “whether”, but “what if” – how would your business be affected if this future came true? Which aspects of each scenario are particularly relevant to your products and services? What other water dimensions need to be added? Which water challenges and opportunities seem most relevant to you as a citizen? A consumer? A businessperson?
• Considering the scenarios as a set, what do you now think are the biggest risks and opportunities for your business’ operations, investment decisions, products, or services in an increasingly water-stressed world?
• Who might be new partners or stakeholders in judging your business operations or in providing new and better solutions to grow your business?