Water is one of the most serious risks to any business, and to society at large, but also one of the most underappreciated.
A combination of climate change and increased demand for water are leading to increased water scarcity in many parts of the world, while growing levels of pollution are reducing the quality of the resources that reman.
According to the UN’s Water Scarcity Report, one third of the world’s population lives in high water-stressed areas. This is set to rise to two thirds by 2030, as water use is growing globally at more than twice the rate of population increase in the last century. A growing number of regions are reaching the limit at which water services can be sustainably delivered.
In 2020, the investor disclosure group CDP’s global water report said that companies disclosed that water risks were set to cost them $301 billion, but that these could be addressed for just a fifth of that cost ($55 billion).
But they also reported huge opportunities from investing in water security – up to $711 billion.
The World Economic Forum’s 2021 Global Risk Report highlights water as one of the key risks we face. For some industries, from mining to agriculture, this is because water is crucial to the manufacture or growth of their key products. For others, such as makers of goods such as shampoo or washing detergents, it is because customers consume a lot of water during the use of their products.
At the same time, consumers are becoming ever more environmentally aware and willing to change their behavior in order to be more sustainable.
A survey carried out by Garnier, the world’s third-largest beauty brand, interviewed 29,000 people in nine countries and found that 83% of respondents want to be more environmentally friendly in 2022, but only 5% think that they are already acting sustainably, with just 30% saying they are ready to take action for the planet now. Some of the barriers for taking sustainable action that they cite include a lack of sustainable choices, lack of information and the perceived expense of sustainable products. The biggest increase in intent to be more sustainable was seen in the US and Germany.
Garnier is an example of a brand whose main water impacts lie in its customers’ use of its products – 80% of the carbon footprint of hair care products comes from the hot water used in the shower – and it also illustrates how businesses can benefit from the need to reduce water use.
The company says that the average person uses seven liters of water to wash and condition their hair. In response, Garnier has launched the first ever mass market No Rinse Conditioner across Europe, following on from the shampoo bar it launched last year. Every tube of conditioner will save 100 liters of water, global president Adrien Koskas says.
The company, owned by L’Oréal, is also using its brand profile to encourage people to make other changes, launching a campaign encouraging people to share One Green Step, which it hopes will create a snowball effect of every-increasing environmental action. For each action shared, Garnier will increase its funding for the Plastics for Change partnership, which aims to recycle up to 2 million plastic bottles. “It is key for brands to take an active role in promoting more sustainable lifestyles. The vast majority of people want to be more sustainable, but often they don’t know where to start. We are passionate about making sustainability easy to understand.”
The company is focused on its own environmental impacts as well – the new conditioner will be made in its carbon neutral WaterLoop factory, which treats and recycles 100% of the water used for industrial processes. Garnier aims for its manufacturing to be entirely carbon neutral by 2025 and 100% WaterLoop by 2030, up from 18% of capacity today.
“Water scarcity is a global phenomenon and a huge risk for us,” Koskas adds. “It is crucial that we understand scarcity and that we understand consumers. But we cannot be patronizing and tell them what they should and shouldn’t do. We must tell them what is in it for them and highlight the added sustainability benefits. If consumer satisfaction is not there, people will not change their behavior.”
L’Oréal was one of just 14 companies, out of almost 12,000, to be AAA rated by CDP for its performance on climate change, forests and water in its latest A list report.