Submitted by James Dalton on Thu, 06/13/2019

By Will Sarni and James Dalton. It is clear that the water stewardship value proposition is incomplete. Stewardship has, more often than not, been framed as a CSR "check the box" exercise and not about business strategy and value creation. 

Some key questions raised previously — and in public discourse — are:

  • Has adoption of corporate water stewardship lost momentum?

  • If yes, is it due to the value of water stewardship being framed incorrectly as a risk management and corporate social responsibility (CSR) and reporting task?

  • What needs to change?

Will Sarni has encountered this point of view often through his consulting experience with multinationals, research and reported on it through collaborations with co-authors including David Grant, "Water Stewardship and Business Value: Creating Abundance from Scarcity"; and Hugh "Bert" Share, collaborator on the upcoming "What’s Missing from Corporate Water Stewardship? Moving from Risk to Creating Value."

Today, water stewardship is primarily risk-focused and not tied to business strategy (business growth, brand value, etc.) Stewardship also manifests itself in collective action and conservation programs via corporate partnerships with NGOs. These tactics in themselves create value and positive impact, however, they are not enough to compel significant corporate investment of resources. Corporate resources are typically committed to those initiatives that build brand value, drive revenue and reduce operating costs. Stewardship can reduce costs through improved social license to operate and improved business continuity but many plans today leave out potential value creation from innovation, new products and services and brand value (brands with purpose).

ABInBev is routinely referenced as an example of a company that has added innovation as a key dimension to its water strategy. In 2018, it launched 100 + Accelerator with ZX Ventures. The partnership illustrates how a company that invests in water stewardship goes further in committing to driving innovative solutions to water, climate change and other critical sustainability issues. Moreover, this strategy has positioned ABInBev as a "brand with purpose." Its work on water issues is creating brand value and loyalty with staff, consumers and its supply chain.

According to Tony Milikin, AB InBev’s chief sustainability and procurement officer, "It’s incumbent on global businesses to play a bigger role in creating a better world for all. At AB InBev, we have a long-term vision to build a company to last for the next 100-plus years, which relies on driving sustainability across our business. Our approach is rooted in the communities where we live and work, and we are well positioned to support entrepreneurs who are tackling local challenges. Through the 100+ Accelerator, innovators will benefit from our resources, experience and global reach to speed their progress and scale."

Don’t underestimate the value of a "brand with purpose" as a key component of a corporate water strategy.

According to the 2019 Porter Novelli/Cone Purpose Biometrics Study ("Purpose Messages Evoke Greater Attention, Arousal and Emotion"), Americans are more likely to have a positive image of (89 percent), trust in (86 percent) and be loyal (83 percent) to brands that lead with "purpose." This first-of-its-kind biometrics study examines not only what consumers say they will do to support responsible brands but also how they feel and physically react when exposed to purpose-driven messaging.

Water stewardship alone doesn’t create enough business value to warrant significant investment. Greater value from a water stewardship strategy can create brand value or a "brand with purpose." Combine the value from a water strategy in new products and services with an alignment with purpose, and then perhaps there will be significant incentives for companies to think beyond water as a CSR issue and more as a purpose and business growth strategy.

The issues we’re experiencing in water stewardship are largely tied to the pricing of water or lack of appropriate pricing. Looking at water through the lens of the price for its immediate utility, such as drinking or washing through a domestic tariff, often results in water efficiency investments to reduce costs and to reduce competition for water and so increases access to water for others. But the true value therefore is hidden — hidden behind efficiency monologues from a traditional CSR legacy. Understanding the value of the resource to business interests, and seeing where companies are willing to stand their ground on water access shows the value of it to their business interests.  

Valuing water better will raise business value questions — questions about business continuity should water supplies stall or even fail or if water quality is reduced. These issues should be keeping businesses awake at night. In East Africa, some really dynamic and innovative water stewardship activities are going on. However, some business-as-usual decisions also are being made in the absence of water realities. Water is still not adequately valued in business or investment decision-making conversations. 

Under increasing competition for water, businesses must look at better valuing the resource in its decision-making, moving beyond standard investments and internal efficiency gains. Consider creating value for the broader water landscape by supporting bulk water supply, by treating water for use in agriculture in a more circular approach than just treating it and putting it back into a polluted watercourse. This shows purpose, and it shows the company's commitment, often made at the enterprise-level but often awkwardly translated to individual site levels.

Alignment, therefore, between business interests and water use has to come through not just considering the value of the resource, but by considering the value of the resource to both business operation and to other users who share water sources with a given company. 

Stewardship needs to mature and thereby contribute to the purpose of a company and its brands. This convergence will help make water a more central part of business strategy. Doing this would move the issue out of the CSR "comfort zone" and more centrally into investment decisions and business opportunities, away from the "branding" and more centrally into the "brand." 

Translating that water stewardship from a brand "enhancing" and CSR opportunity into a more operational construct can help position large private water users with those smaller users in better managing shared water sources. Small and large water users, working with public sector agencies such as river basin organizations, can use the business interest to drive alignment amongst multiple water users and interests — this is a powerful outcome.

True collective action creates alignment across public and private boundaries and focuses on joint solutions for sustainable and consistent economic development — be it for the private farmer and his 40 seasonal workers or the large commercial operator who needs a consistent high-quality supply of materials.

Time will tell if water stewardship has stalled or if it simply being repositioned as something more central to business strategy — with greater value. Regardless, now is the time for companies to critically reconsider their thinking and strategy to "solve water."


Will Sarni is the Founder and CEO of Water Foundry

James Dalton is the Director of the IUCN Global Water Programme

This article was originally posted on Wednesday 12 June 2019 on the GreenBiz website