For many companies, water efficiency is a long-term
requirement for staying in business, a big commercial opportunity,
or both.
Giulio Boccaletti, Merle Grobbel, and Martin R. Stuchtey
- Mckinsey Quarterly
In a world where demand for water is on the road to outstripping
supply, many companies are struggling to find the water they need
to run their businesses. In 2004, for instance, Pepsi Bottling and
Coca-Cola closed down plants in India that local farmers and urban
interests believed were competing with them for water. In 2007, a
drought forced the US Tennessee Valley Authority to reduce its
hydropower generation by nearly a third. Some $300 million in power
generation was lost.
Businesses everywhere could face similar challenges during the
next few years. A larger global population and growing economies
are placing bigger demands on already-depleted water supplies.
Agricultural runoff and other forms of pollution are exacerbating
the scarcity of water that is clean enough for human and industrial
use in some regions, and changes in climate may worsen the problem.
Scarcity is raising prices and increasing the level of regulation
and competition among stakeholders for access to water. To continue
operating, companies in most sectors must learn how to do more with
less.
Achieving that goal is an opportunity as well as a necessity.
Many of these same companies are developing products and services
that can help business customers raise their water productivity. In
agriculture, improved irrigation technologies and plant-management
techniques are yielding "more crops per drop." New approaches now
rolling out will help oil companies, mines, utilities, beverage
companies, technology producers, and others use water more
efficiently.
Closing the gap between supply and demand by deploying water
productivity improvements across regions and sectors around the
world could cost, by our estimate, about $50 billion to $60 billion
annually over the next two decades. Private-sector companies will
account for about half of this spending, government for the rest.
Many of these investments yield positive returns in just three
years.
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