Water reduction is emerging as the next widely debated environmental issue. It impacts many global manufacturing sectors whose production is reliant on water. There is growing concern among the public that large industrial concerns, which use up to 30% of the planet’s fresh water, should be more vigilant about their consumption.1 The UN Principles for Responsible Investment (UN PRI), to which we are a signatory, postulates that water is a finite shared resource, as well as a basic human right. Increasing demand, climate change and pollution are putting pressure on global water resources.
This raises 3 important questions:
What water issues do we face?
- Water scarcity due to climate change.
- Water pollution driven by agriculture, industry and excessive use of plastic.
- Low water tariffs.
- The geopolitical tensions that arise as a result of water.
Which industries are most plagued by water issues?
Agriculture & farming:
Agriculture is the single biggest cause of water pollution globally.2 The re-routing of rivers and huge irrigation projects are all required to grow crops and feed livestock. At the same time, the excrement of livestock goes into the rivers, polluting the water supply.
Water is critical to copper production. Yet 78% of copper produced by the world’s 20 largest mines is currently in water-challenged regions. The use of fresh water has been the source of disputes between mining companies and local communities worldwide. This has resulted in temporary mine closures, production stoppages and delays in new licenses.
A typical semiconductor manufacturing facility uses 2-4 million gallons (15m litres) of ultra-pure water per day.3 To put this into context, the average person uses ~100 gallons of water per day. This would mean water used at one plant is enough to supply 40,000 people with their daily water needs.
We believe that better pricing of water tariffs would encourage more companies and people to be less wasteful. The following list includes some of the questions we ask our companies to give us a higher level of confidence that they are tackling their respective water issues in a proactive and effective manner.
General questions on water:
- Is the company in a water stressed region?
- What is the company’s water footprint? This looks at volume, type of water (surface water, groundwater, desalinated water), location and timing.
- Has the company audited their water use? Hired an independent expert?
- What efforts are they doing on water consumption/ recycling/ reducing waste & plastic waste (that make their way into our water stream and the GPGP)?
- What efforts are they making to treat waste-water? How do they treat it? And where does it go?
- What are their current water tariffs (clean and waste) and how have they trended?
- What regulations have they encountered?
- What public backlash has the company encountered?