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The Water-Energy Nexus: Pursuing Sustainability and Business Performance in Tandem

By Diego Trujillo, VP & GM, Downstream Division, Southeast Asia


The effects of climate change know no borders. Tropical regions, such as much of Asia, are prone to extreme weather events, rising sea levels, and higher temperatures.

With this in mind, the impact on infrastructure design and building codes, urban planning, energy strategy, water resources management, disaster preparedness and response, policy and legislation, as well as community engagement and education are profound.

Each of these issues presents unique challenges to both public and private organisations, requiring significant investments, new technologies, innovative policies, and education, as well as national and international cooperation.

As we attempt to move towards a lower-carbon future, energy strategies will need to incorporate renewable energy sources, increasing efficiencies that proactively plan for energy resilience in the event of power disruptions.

Water scarcity is a growing global issue with complex and far-reaching implications. According to a recent study from the World Resources Institute, by 2050, close to 60% of the world’s population could experience extremely high-water stress at least one month a year.

For businesses, water scarcity is where climate change hits home, often affecting production lines and resulting in a reduction in output and revenue.

At the heart of the water-energy nexus is the rapidly growing appreciation that climate and water systems are linked, and changes in one system induce important, non-linear changes in the other.

Water supply and demand and energy production impact climate; climate changes affect water availability; and the availability of water, in turn, affects energy production.

Ultimately, this means that we can’t achieve decarbonisation goals without focusing on water, which requires defined plans for smart water management at an operational level.

How can this crisis be managed and planned for?

The problem is not a lack of water per se. It is the uneven distribution of freshwater – of which fast-growing places such as India are woefully short – that provides the conditions for a crisis. To plan and mitigate the effects of water shortage, businesses should consider the following:

  1. Facilities in different regions operate within unique watersheds. Measurable goals based on local constraints and climate lead to effective local and regional benchmarks.
  2. Businesses need to both mitigate and adapt to local and regional water shortages.
  3. Any piece of land where water flows toward a stream, lake, river, or bay is considered a watershed. Also known as basins, these geographically defined regions provide habitat to wildlife, space for our neighbourhoods, and vital water sources for industry. Watershed preservation should be part of companies’ broader efforts to reach a net-positive water impact.
  4. Given the importance of watersheds, companies should aim to design their water efforts to go beyond meeting minimum compliance requirements to ultimately have a net-positive water impact.
  5. Net-positive water impact is achieved when the company’s water contributions exceed its water withdrawals in the same region. This way, companies can meet their operational needs – and help support the needs of surrounding communities.
  6. Through Ecolab’s 500 assessments conducted in manufacturing across multiple industries, it was found that more efficient water management can enable reduced water consumption by up to 44%, energy use by up to 22%, and greenhouse gas emissions by up to 12%.
  7. Leaders must tie water use to broader company sustainability goals to ensure that companies are properly using nearby water sources.
  8. The common misconception is that sustainability and profitability goals can’t coexist. But that’s not the case. Since businesses rely on water in their operations and supply chains, businesses must strive for water resilience as a means of mitigating business risk, in addition to making positive impacts in the communities where they operate.

Converting ESG metrics into financial returns

Businesses should activate a sustainability strategy to advance both people and the planet. To start, companies can apply a 4-step framework focusing on goals, actions, insights, and outcomes, while also taking measurable and timely action through operations, funding, and partnerships that benefit global water systems.

Taking a holistic, coordinated approach across an enterprise only raises the potential impact, which is the foundational principle of the Ecolab Water for Climate program. Taking the beverage and brewing manufacturing industry as an example, Ecolab Water for Climate is designed to help those customers reduce water use on average by 25%, energy use by 12%, and greenhouse gas emissions by 6%.

We cannot address and adapt to climate change through reduced greenhouse gas emissions without first considering the critical role of water. While many companies have set ambitious sustainability targets, many do not have a sufficient plan in place to achieve them.

The need for responsible, resilient operations will only grow, and the general population expects more proactive approaches from both businesses and governments – a finding reinforced by the Ecolab Watermark Study. To this end, effective water treatment strategies will continue to play a critical role in helping organisations address their sustainability goals, drive business performance and create a better and brighter future.

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