Water: Scarce or abundant?

Monday, July 02, 2012

18:00 - 20:30

The July Forum explored whether we should reframe sustainability as "harnessing our ingenuity", rather than as "scarcity".

There is a growing view that the "scarcity" approach has triggered enough innovation that many of the solutions are now in development, and the question is now how we take that innovation to scale.

In that context, staying on "scarcity" may be counter-productive - rather like "austerity", it doesn't motivate. Instead, Steve Jobs, re-inventor of 4 industries, becomes a shining example of the ingenuity we need, rather than a naughty boy! How do we harness this ingenuity, and how do we deal with solutions that might represent alarming change to some (GM food, nuclear etc.) are key questions.

Our panel:

  • Martyn Seal (European Head of Sustainability, PepsiCo): onreleasing the first years results of Icrop, its collaboration with UK potato farmers. Water use down 30%, yields up 7%. Impressive, but still incremental change.

  • Professor Mark Post (Professor of Vascular Physiology, Maastricht University): on in-vitro meat, grown in a laboratory and which uses 1% of the land and 4% of the water associated with conventional beef production. Representing radical change.

  • Peggy Liu (JUCCCE Chairperson): a visionary view - how do we harness such ingenuity.

Speakers

Mark Post University Maastricht

See bio

Martyn Seal PepsiCo

See bio

Peggy Liu JUCCCE

See bio
Round Tables

Supply Chain

When is the right time for companies to start undertaking water footprints, and in what circumstances are companies taking a risk by not doing so?

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The supply chain table looked at how companies are approaching the recording of water usage. It was agreed that the biggest challenge was engaging with suppliers and that collaboration between companies is vital if they are going to reach the same farmers; this does however get more complicated and more tenuous the deeper and more tiered the supply chain becomes. Water is perceived to be a precious commodity and companies need to be visibly addressing their usage; water footing was seen as the way forward for understanding the impact of water within the supply chain and a mentality of trying new things and not being afraid of failing is essential.

1. Solutions
• It was agreed that the way forward is for companies to have a water footprint but one leading company said that they are not yet confident to discuss/ present on this and need the support of NGO’s and to work with their competitors; this stage of development is pre-competition.
• One member suggested that using the word ‘scarce’ is not the wrong terminology as it is a tangible issue and happening now, especially in retail companies.
• Innovation can be off-putting for smaller companies but it was suggested that all the systems and technology are in place, it is a matter of communication.
• Measuring water footprint is not just about crops but a consideration of all farm activities.

2. Obstacles
• Engaging with suppliers is a challenge whether it be from communication, cultural or political issues.
• Must consider that is it not only about water scarcity as there is now an increase in competition for water, so all companies need to be concerned about their usage.
• Abundance of water is also an issue, e.g. flooding.
• Little benchmarking has been carried out and as such it is hard to measure continuous improvement.
• Modelling is needed, especially in more complicated issues however it is even more effective to actually go to the famers and experience their working practises.

3. Examples
• One large company has a water management policy, however most companies have yet to establish them.
• Providing suppliers with KPI’s is a way of supporting suppliers as you can’t just say to them ‘Be Green’. Also passing on knowledge and skills via 1:1s, round tables or group work is essential.

4. Red Flag (Warning)
• Senior level management need to understand about the cost of water usage, not just the supply of it but the commercial cost of managing that water. At present there is a lack of awareness and understanding.
• Whilst some organisations are looking into operational water impact few have taken the steps at looking at water impact across the supply chain.

Finance & Corporate Sustainability

Companies such as Nissan and O2 put deliberate stretch in their sustainability targets to force the company to find innovative solutions. What does the table think of this, and other solutions, for harnessing ingenuity?

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Pushing the boundaries helps to achieve goals and sometimes exceed expectations. However the targets must be based on a credible roadmap, and coupled with financial benefits, a top down approach, good working relationships between staff and a culture of behavioural change.

Communications

Is it the role of companies to ignite sustainable demand? What are the most effective ways, what to avoid, and should they take a public stance on contentious issues? (Note - not linked to plenary discussion)

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Companies in recent years have been incorporating sustainability into their supply chains and operations. But we are still a long way off where we need to be in mainstreaming sustainable demand.

Technology

The role of technology in water strategies

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The discussion was about the role that technology plays in shaping the present and the future of sustainable water use. The central aspect that dominated the discussion was that while technological solutions exist, they are often difficult to identify for organisations due to a lack multidisciplinary expertises. The common view emerging from the round table was that the rationalisation of water use through technological improvement can be achieved only if collaborative approaches in problem solving are adopted. Solutions can be found fostering infra-organisational and inter-organisational knowledge exchange, thus organisations should be prepared to be open and share issues and solutions.

The main aspects discussed during the conversation are listed below.

CHALLENGES/OBSTACLES
• Lack of internal expertise.
• Where and how to find external expertise.
• Water issues are local and often sector-specific.
• During economic crises it is difficult to convince decision makers to take risks for sustainability improvements.

SOLUTIONS
• Collaborative approaches to problem solving.
• IT industry and “open source” approaches could be used as models to source water sustainability solutions.
• Use of ICT for information/knowledge exchange.
• Adoption of systemic approaches in addressing sustainable water use: not focussing only on water rationalisation but also on energy use may help in finding a solution to multiple efficiency issues.

EXAMPLES
• PepsiCo and Imperial College London collaboration to find solution for water heat and cooling water re-use at a PepsiCo plant.
• British Sugar Wessington Plant uses hot water, carbon dioxide from CHP and water from sugar beet washing to grow eco-friendly tomatoes in Cornerways Nursery, built in 5 hectares of land near the sugar plant. The hot water from Wessington CHP is used to prevent heat loss from the Nursery glasshouse at night, carbon dioxide is pumped in the glasshouse and used by tomatoes in photosynthesis and water that has been previously used to wash sugar beets is recycled to irrigate tomato plants.


WARNINGS
• Technological solutions for water processing can be energy intensive (e.g. desalination).
• Solutions must be cost effective.
• Renouncing to intellectual property on some technological solutions may be required in implementing collaborative approaches.

Energy Effeciency

Should more companies be using "treasure hunts", like GE, or are there better ways of harnessing our ingenuity around energy efficiency?

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The table agreed to take a broader look at how they empower stakeholders to locate efficiencies and act to realise them. An important principle that was agreed on was that the creative spark for transformational change was not something you could oblige stakeholders to provide. It had to be part of a voluntary and compelling programme.

Obstacles
• Employees’ motivation towards energy efficiency is the main challenge for businesses. Behavioural issues of people in certain type of jobs affect their motivations towards savings.
• Since energy efficiency is not a core objective in companies’ business model, it is necessary to make a business case for saving energy.
• Because efficiencies are only significant when combined they often receive less attention from large companies’ CEO.
• Innovation is limited to high ranked employees and managers; everyone should be involved in savings. Those in energy management roles can be too set in pursuing incremental change.
Solutions
• Monetary incentives: Motivating employees to save more energy by rewarding them financially is accepted to be very significant.
• Behaviour change
• Regulations: regulations and obligations are managers’ leverage to achieve energy efficiency goals.
• Communications: If employees are aware that their colleagues saved more and as a result earned more, they will be motivated to save more. Transparency of energy savings by employees can motivate them to save more.
• By making a business case, energy efficiency objectives of business can be achieved.
o Look at the numbers
o Encourage voluntarily activities
o Locate the potential areas for further savings
Examples
• “ecoinomy” (www.ecionomy.com) provide internet-based software incentivises employees to save company resources by giving a percentage of the money saved to their chosen charity or community cause.

Corporate Strategies

Collaboration: was the Sustainable Living Lab the beginning of a new way of collaborative working, and how could companies be collaborating more to harness innovation?

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This month’s Green Monday topic concerned the dilemma of scarcity, and technology’s role in alleviating scarcity. A quick show of hands showed that the feeling in the room was that the current approach towards sustainability is not working. So will solutions to the world’s problems come from technology, or do the rules of the game have to change?

The Corporate Strategy roundtable discussed Collaboration. Unilever's Sustainable Living Lab was an example of 'crowd sourcing' sustainability ideas using online collaboration. The event lasted 24hrs and collected the views of leading experts along with interested members of the public. Based on this innovative Lab, what were the participants' thoughts on the role of collaboration in driving sustainable change within industries?

Through the discussion, three general themes emerged. Firstly, collaboration can be very beneficial, but must be managed effectively to result in real and measurable outcomes (most importantly a benefit to the bottom line). Secondly, that collaboration is evolving and now includes many cross-sector collaborations with NGOs (as witnessed in last month’s Green Monday). Thirdly, that open source or public collaboration can provide a wealth of new ideas; however the shear wealth of content that can emerge places a burden on collaborators to manage the identification of new ideas and conduct the due diligence process.

A key question that remained unresolved was over the value of collaboration - can its impact on bottom line really be measured?

Obstacles
• Sustainable Living Lab (SLL) acted as a funnel for new ideas generation, however it is not expected that resulting action will follow quickly.
• Collaborating with academics is difficult as business and academia work on different time scales and pressures.
• The international aspect to MNCs working in markedly different markets can raise barriers to successful collaboration.
• Collaboration exists to fill a gap in ideas or skills, and so there is a natural limit to collaboration with competitors.
• Lobbying is a natural outcome of collaboration and can benefit or hinder sustainability issues. In some cases, lobbying is used to mitigate the impact of government regulation, while at other times it can be used positively to drive industry wide change for the better.

Solutions
• The evolution of corporates working with NGOs can be traced back to when a corporate approached an NGO to give funding as 'Charity of the Year'. This has evolved into working together, with staff placements, with benefits to both NGO and Corporate.
• NGOs collaborating with industry is increasing and allows cross section 'pollination' of ideas, that often spark even further innovation.

Examples
• The SLL is comparable to the 2degrees network setup by Tesco to share information between suppliers. Tesco also collaborate with academia in their funding of the Sustainable Consumption Initiative (SCI).
• Green Monday is an example of this collaboration

Red Flags
• Collaboration can be beneficial to an industry (for example setting up lobbying groups, or standards), however there comes a point where companies must 'break off' and 'go it alone'.
• Intellectual Property (IP) issues exist when opening up your innovation to competitors.

Energy Policy & Strategy

“The Water and Energy Nexus”: have companies  got hidden water stress costs in their energy consumption, and what should they be doing to prepare for it?

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Summary
The table reached the conclusion that there is currently insufficient awareness and knowledge of the water stress costs in energy consumption. Participants felt that on a more general level the cost of water is hidden/ embedded in the supply chain and energy prices, and is largely not considered in the UK due to plentiful supplies of fresh water at most times of the year. What followed was a more general discussion of water related issues rather than the water and energy nexus.

Group members agreed that the impact and availability of water resources are highly localised and dependent on climatic conditions. Many costs arise from events related to water, but not necessarily from a change in the cost of water itself.

Group members felt there was sometimes a disconnect between the energy and water departments of organisations so in that sense water costs in energy consumption are hidden. The group identified that connections should be made between key people in their organisations and awareness raised on this point.

The table agreed that hidden water (stress) costs need to be clearly defined and investigated further with appropriate tools. At the same time the table agreed that conversations with policy makers are needed. Policy responses (e.g. higher water cost, taxation, regulation of use, standards) may be potential solutions to helping conserve freshwater and helping organisations understand and respond to the water stress challenge.
Obstacles

• Conversations on water stress are beginning in organisations – but the meaning of “water stress” is uncertain
• Water scarcity can lead to political stress, e.g. Nile (Egypt/Sudan) and the Himalyan rivers (China/India)
o Added issue of health stress, again with emphasis on locality
• Water has an energy cost and is more valuable than it seems
o Water relevant in some energy production – e.g. nuclear, PV (at manufacturing site) etc.
o Artificially low price of water and regional suppliers has reduced competition
o Lack of data on the costs of water in products and supply chain
• Freshwater has a very low cost, but organisations agree it has lots of value. Organisations often pay by license, and not by volume, e.g. unmetered supplies.
• Consumers cannot see the embedded water in products and cost of this water
• Too much water can lead to flooding – this results in e.g. higher insurance costs
• Water consumption is not adequately tracked as data can often be less robust and there is often no direct link made to energy e.g. in billing

Examples
Examples of water events impacting on costs for companies:
• A New Zealand dairy now products from elsewhere to make up for production shortfall due to water shortage, increasing product cost – an example of the hidden cost of water
• It was thought that Coca Cola recently shut down a plant in Africa due to lack of the necessary water supplies
• It was thought that M&S changed water policies recently – instead of relocating to less water-stressed areas for production, they’re now addressing the water usage issues and staying in the original locations
• Water embedded in products is difficult to quantify – there is a conflict with transport. For example – making concrete – is it better to mix concrete on site with local water in stressed areas (low transport energy cost, high water hidden cost) or mix concrete offsite with non-stressed water resources (high transport energy cost, low water hidden cost)?

Solutions
• Context in which water issues are discussed is crucial – e.g. East Anglia faces different issues to Pakistan
• In the UK, drought not yet a large issue, but the future uses must be examined, e.g. PepsiCo 2030 water stress map
• Costs have been identified as crucial to changing consumption behaviour – change pricing mechanism to reflect real cost
• National water policy is likely to be more workable than international
• Volatility in water supply is the main driver of stress – ability to predict this will be crucial
• Tools for understanding the impact of water may include water footprints and recognised standards e.g. ISO
• Possible metric for water stress – by country/state/locality
• Better data on water origin

Opportunities
• Water is less well understood than carbon so there is an opportunity for greater and targeted education and awareness raising
• Carbon policy development has been and continues to be challenging. We can learn lessons from this for water policy development which is anticipated to be much more complex
• By using a more accurate pricing mechanism to reflect the real cost of water and using this to help quantify benefits from improved water efficiency it will be possible to justify water policy work
• Opportunity for incorporating ‘water’ in broader organisational risk management

Resource Efficiency

Closed loop thinking is praised for its ingenuity and ambition, but often criticised for being unrealistic and under delivering. Where is it working? And why?

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Panel liked closed loop as an idea, and it can apply to specific high value materials within specific sectors - eg rare earth minerals, titanium alloy (see RR example below), aluminium etc. But this is in practice just little more than recycling / reuse etc.

Scarcity / rising prices encourages such activity - eg, recovering rare earth minerals from used cars.

Other examples of re-use cited were InterfaceFLOR (carpets), M&S (sandwiches), Quintain (construction waste).

In many cases, though, we're not talking about totally closed loops - more a circle where input and output are minimised, rather than removed altogether. (Eg, paper: this can be recycled around eight times before it degrades to a point where it's not useable any more, so some 'virgin' supplies will always be needed.)

More ambitious 'industrial symbiosis' plants, such as at Kalundborg in Denmark - a cluster of industries using each others' waste as feedstock, haven't really taken off, although the UK's National Industrial Symbiosis Programme (NISP) is encouraging such initiatives.

On water specifically, there should be ample opportunity for closed loop approaches - after all, it doesn't degrade over time, and if we harvest the rain properly (rather than let water run off into the sea or into aquifers where it may take years to 'come around again'), we can make use of nature's own closed loop. This is starting to work at a localised level in some industrial plants and new domestic housing - reusing 'greywater' for example. But retrofitting existing infrastructure to close the water loop is expensive and cumbersome. If water cost more, of course, it might be different...!

The growing enthusiasm for peer-to-peer re-use - eg through eBay - has perhaps helped remove a cultural barrier to more closed loop approaches: people are comfortable with the idea of letting others make use of their old stuff, or even 'idle assets' not currently in use (eg, a car - via Whipcar - for example).

Plenary roundtable - 1

What motivates people to engage in sustainability? How do different people respond to "scarcity" and "responsibility", and would a move to ingenuity be more successful?

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Summary
The table responded to the question by considering how best to engage and motivate sustainable behaviour in the attendees, exhibitors and suppliers of large events. It was noted that the challenge of engagement could be understood as communicating with a more ‘reluctant’ audience, as more motivated groups readily sought out sustainability messages. The table considered the psychology of engagement and the merits of incentives to change behaviour, appealing to responsibility and engaging people via competition and collaboration. Although responsibility was considered an important motivator, the table considered it was important to focus on the wider benefits that sustainable approaches offered.

Challenges
The table identified travel, waste, energy, water and communications as the five leading sustainability challenges at events.

Travel
1. Travel of participants to events contributed greatly to the overall impact of events.
2. This is a unique engagement challenge, as it requires engaging with attendees far in advance of the event
Waste
1. The key challenge for events is reducing waste sent to landfill at the end of the event
2. Exhibitors stands and materials are a source of large quantities of waste, which could have considerable value through reuse or recycling
3. Visitor consumption of food, beverages and merchandises produce large amounts of waste

Energy
1. High levels of energy use during events
Water
1. High levels of water use during events
Communications
1. The table suggested that the concept of sustainability itself was not attractive to most people
a. Sustainability was considered a harder concept to communicate than ‘environmental’ issues on their own
b. A general audience may consider sustainability an area that has made little progress and have little desire to engage with it
Red flags
1. Events are opportunities to motivate and empower those attending, focusing on ‘scarcity’ or ‘responsibility’ in the context of an event can ‘play against the mood’ reducing the effectiveness of the event
Solutions/Examples
Motivation and engagement – competition and collaboration
1. Competition is an effective to engage and motivate, with winners receiving incentives
a. This could be facilitated by monitoring the environmental impacts of individual exhibitors, for example which stands use the greatest amount of electricity
2. Collaboration is well suited to engagement with sustainability issues
a. Collaboration has the benefit of engaging all exhibitors in a joint effort

Motivation and engagement - incentives
1. Incentives were considered a key way to reduce waste
a. Collaboration incentives could include:-
i. A reduced rate for all exhibitors if an environmental target is met
ii. A matching donation to be made to a charity that reflects the environmental benefit achieved
1. Examples include matching energy saved with a donation to an energy project or providing materials and resources to a good cause based on material not sent to landfill
b. Competition incentives could include:-
i. Discounts and reductions for exhibitors with high levels of environmental performance
ii. Awards which recognise environmental performance and drive traffic to an exhibitor during an event
c. Price incentives could make generating waste far more expensive than reducing waste
i. It was suggested that strong price incentives would be necessary to promote widespread change
d. Incentives for consumers could also engage consumers in environmental behaviour
i. incentives to recycle are often effective, such as Coca Cola offering prizes for recycling PET bottles
ii. Small deposits encourage the reuse and return of products

Motivation and engagement – facilitators
1. Real time information and reporting on environmental performance could be used to engage exhibitors and attendees at events with sustainability
a. This information could be used to motivate competition or collaboration
b. This could be facilitated by encouraging a business that supplies real time monitoring technology to use the event as a showcase for their technology

Communication
1. Successful communication strategies engage audiences and change behaviour
a. The provision of free public transport travel alongside tickets to the Olympic games was an example of effective engagement
b. This offered a surprise, a benefit and created a positive feeling about more sustainable travel options
2. Sustainability must be framed in a way that is relevant to the intended audience
a. It may be useful to not use the term ‘sustainability’ at all, instead focusing on the other benefits offered
b. For example a journey by public transport to an event may emphasise freedom from traffic jams, the opportunity to relax en route and the health benefits from walking
3. Sustainable behaviours should be clearly signposted
a. At Olympic events disposable cups and the appropriate receptacles are tagged orange
4. Visible and creative ways of communicating can engage participants
a. The table considered the potential of airport port style ‘security’ scanning event attendees for unnecessary pens and other merchandise
5. Sustainability messages are an opportunity to create positive interactions with participants throughout an event, even when they are disposing of a cup or flushing a toilet.
6. A coherent approach to sustainability throughout an event provides an opportunity to present sustainability as something you are committed to and authentically engaged in

Venues
1. Location of venue is crucial to reducing travel impacts and ensuring that the venue is accessible by public transport, walking and cycling
a. Providing support for more sustainable transport options, such as cycling racks or clear guidance on public transport options
2. Venues should be as energy efficient as possible
a. The ExCeL London Exhibition Centre was cited as a venue committed to sustainability with access via public transport, smart meters in individual halls and a wormery for waste

Encouraging innovation and ingenuity – sharing premises
1. Ingenuity and innovation offer significant opportunities to reduce environmental impacts
2. The sharing of stadiums is an opportunity to significantly reduce environmental impacts associate with sporting events
3. Barriers to this include
a. Competition between teams
b. Increased revenue opportunities from sole ownership
c. Preference to be the sole owner of a space
4. Engaging with stadium owners and providing financial incentives to encourage sharing of facilities is likely necessary to disrupt current practices and encourage more sustainable practices

Responsibility
1. Responsibility is still an essential motivator for consumers to be more sustainable
2. Visitor consumption at any event is inevitable, therefore the challenge is to ensure that consumers can consume as responsible as possible
3. This may include
a. Ensuring that products themselves are sustainable
b. That there are opportunities to reuse and recycle products
c. Encouraging responsible behaviour in participants, for example reducing the take up of free gifts offered at stands
d.
Technology
1. Technology is an essential tool for reducing waste, as not all consumption can be avoided
a. Products that are low impact to produce and dispose of, such as compostable cups are essential to reduce environmental impact
2. Real time monitoring of environmental impact, such as SMART meters, provide feedback and opportunities to motivate and change behaviour through incentives and competition
3. Technology alongside behaviour change can have significant environmental benefit
a. For example providing drinking fountains at events and encouraging their use
4. Technology is sometimes the only way to tackle a sustainability problem
a. The reduction in use of water from toilet facilities could only be achieved with the use of technological solutions such as waterless urinals, rather than behaviour change

Ecosystems & Natural Capital

Rio & valuing natural capital: what’s driving it, and how to do it?

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The discussion initially looked at what ecosystems services actually mean, and trying to separate it from the traditional science of human ecology, to something that business can implement and value in business models but has a specific focus on the environment, versus the wider principles of Sustainable Development, but does account for wider long term social factors.

One of the challenges is the concept is difficult to grasp, using examples that people can relate to is important, such as the depletion of bee colonies and the vital role they play on eco systems and supporting agriculture.

Partly eco system services are about developing the knowledge, the value and then monitoring of eco systems and/or natural capital which allow businesses to account for them, Dow Chemicals was discussedin how they have integrated this into their supply chain. And Puma accounting for leather.

The discussion moved to how you start to make countries account/monitor natural capital, a similar approach to carbon could be used, such as trading mechanisms / targets / measures.

A good example was Costa Rica – similar to a carbon tax the same method has been used to manage water scarcity, the capital raised is used to support ecosystem development programmes, this incentivises and supports bio diversity, which is often ignored and forgotten. Progress has included a large afforestation programme.

One of the challenges is how you measure natural capital, one approach is attaching a financial value to it (unfortunately it is not possible to rely on people naturally valuing the environment). The discussion concluded around international standards to account for eco systems, one example is Financial Accounting Standards. All though there are several standards covering similar ground and what is needed is a universal system.

Further reading: http://www.lwec.org.uk/sites/default/files/postpn_376-natural-capital-accounting%5b2%5d.pdf

Venue Detail

Bank of America Merrill Lynch: King Edward Hall

King Edward Hall | 2 King Edward Street | London | EC1A 1HQ

Directions

Bank of America's offices are a very short walk from St Paul's tube station (Central Line). Exit the station at Cheapside/Newgate Street. Go past the BT centre, with it on your right-hand side and take the first available right down Edward Street. Continue down this road for 80m and the entrance to the venue is on your left-hand side.

Do not go to the main reception desk at their offices when you arrive. You are looking for an entrance that leads you directly into the King Edward Hall.