Increasing demand for water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities

by Lara Ryan

Canadians use an average of 4,400 litres of water per person, per day. This is nine times the consumption rate of the U.K. and four times that of Sweden; it's more than double the average in a study of 16 OECD countries.

We can individually turn off the taps and install low-flush toilets, but business has a huge role to play if we are to make real progress. Power production accounts for 64% of the water used in Canada, 14% by the manufacturing sector, 12% by municipalities (including consumption by homes and local businesses), and 9% by agriculture.

While many countries have decreased water consumption, Canada's use continues to climb. Between 1980 and 1997, overall water use in Canada grew by 26%, five times more than the overall OECD increase of 5%. There's an argument that we should pay a higher price for resources to promote efficiency. But many municipalities don't even measure water consumption, so there's no economic incentive to be water wise. In Canada, 43% of domestic users pay a flat rate for water, and many more actually receive discounts for higher consumption.

The United Nations forecasts that by 2030, almost half of the world's population will live in areas facing water scarcity. Only 1% of the world's water is clean and easily accessible, and the effects of climate change, increasing population, urbanization, per capita demand, and pollution will create more stress.

According to a recent report by McKinsey Quarterly, increasing demand for water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities. It estimates costs of up to $60 billion annually to narrow the water-resource availability gap through technical improvements, increasing supply, and improving water productivity.

Business is going to be held accountable. A tool developed by The Carbon Disclosure Project (CDP), called CDP Water Disclosure, requires companies to measure and disclose information on water usage, the risks and opportunities in their own operations and supply chains, as well as their water management and improvement plans. Expect water to get more space in corporate-responsibility reports.

Both the McKinsey report and the CDP tool address business's role in the global water challenge, including competition, urbanization, sustainable growth in arid and semi-arid regions, and the relationship between water and energy. It will also be important to look at the role of agriculture and bio-energy as a key demand driver.

The private sector has a role to play in contributing to water-security solutions. Many companies are already at the front of this issue and developing CSR strategies around investment in water conservation.

RBC is one Canadian company making headway. The financial institution has a longstanding commitment to environmental sustainability. In recognition of its progress, it was named to the Global 100: Most Sustainable Corporations in the World list for the fifth year in a row. "Water has become an integral part of our commitment to environmental sustainability," says Lori Smith, CDP's manager of public affairs. "It's fundamental to the sustainability of all life on the planet. In fact, lack of access to clean water is considered to be one of the major threats to human health and economic development around the world."

In 2007 RBC created its Blue Water Project, a 10-year, $50-million grant program to support projects dedicated to water conservation, watershed protection, access to clean drinking water, and other freshwater-related issues in Canada and around the world. This represents the largest charitable commitment to a single cause in RBC's history.

In 2009-10, RBC will direct more than $1.4 million to organizations in Atlantic Canada that are protecting watersheds and raising awareness about water conservation. Some leadership grants include funds for the City of Bathurst, N.B., and the Bathurst Sustainable Development Association to mitigate pollution impacts in the Middle River and Carter's Brook Watershed; Memorial University of Newfoundland to help provide regional workshops on issues related to water; The Discovery Centre in Halifax to support interactive learning about water for school-aged children; and provincial Nature Trusts and community organizations to support outreach and preservation programs.

RBC's global commitment of almost $13.2 million in grants to support watershed protection and access to clean drinking water sets a great example. To significantly mitigate risks to society and business, others need to join the cause.

Lara Ryan is a business consultant specializing in CSR. She can be reached at lara@lararyanconsulting.ca.