– As the devastating images of flooding in Pakistan went round the world and the country declared a state of emergency, some 4,000 miles away in Stockholm, delegates had just arrived for World Water Week – an annual focal point for global water issues.
For lots of the international attendees, many of whom were from the corporate world, the headlines were a deadly reminder not only of the power and value of water, but also of the failings of the global system to manage it properly.
There can be no debate that Pakistan’s latest flooding catastrophe has been exacerbated by the climate crisis. With COP27 on the horizon in November, and the UN Water Conference taking place in March next year, business leaders, governments, and key stakeholders must propel water issues to the top of the agenda and address them beyond the boardroom and throughout supply chains.
It’s fair to say that the important role businesses have to play in securing sustainable access to water has often been overlooked. Having a safe, reliable, and resilient water supply is essential for most production processes and the health and wellbeing of employees – plus, it also makes sound financial sense.
At World Water Week, WaterAid launched its latest research ’Boosting Business: why investing in water, sanitation and hygiene pays off’ to demonstrate to companies the business benefits and potential financial returns of investing in these facilities.
This pioneering, first-of-its-kind research was funded by Diageo, Gap Inc., HSBC, Twinings and ekaterra (previously part of Unilever). Research took place over four years, in four different countries, across four different sectors – including tea production, the clothing and leather industry and smallholder farming.
The WaterAid perspective:
The quantitative aspect of our pilot is vital as it’s all about how and why investing in taps, toilets and hygiene behaviour change is good for business. We were able to not only carry out thought-provoking project work with tangible benefits for the workforce and wider communities, but we were also able to quantify how that then impacted upon productivity; how many jeans were sewn together, how much tea was picked, how much absenteeism fell, how much the companies paid on medical bills decreased and so on. We then extrapolated this data into standout figures – the return on investment (ROI).
In a nutshell installing clean water and decent sanitation facilities helps employees stay healthy. This means less absenteeism, lower medical costs, improved morale, and productivity. For every $1 invested in clean water, our research showed the apparel and leather sectors combined gained a $1.32 return on investment and the tea sector projects a $2.05 return.
To highlight the stand-out examples – one of the ready-made garment (RMG) factories in Bangladesh showed a ROI of $9 on every $1 invested in WASH, whilst in one of the Twinings’ tea estate plantations in India, there was a $5 to $1 ROI during the pilot programme.
With continued investment over a ten-year period, the returns are even greater – indeed one of the RMG factories is projected to have $30 to $1 ROI – and if companies support their employees’ communities as well, significantly more people will benefit.
It’s important to also consider that some businesses will be put off by the initial capital expenditure, and the fact that the returns are not always immediate. However, low-cost solutions can often provide big results in the long-term.
Integrated within this is hygiene, which became a topic for board-level consideration during the pandemic and the sudden attention the world gave to enhanced handwashing has provided lasting impact as the first and most cost-effective defence against infection.
The key now is to think about how to maintain that beneficial shift in behaviour. Each workplace is different, but it’s time for companies to put the wellbeing of their workforce at the heart of their business strategies and make water, sanitation and hygiene a priority.
The business perspective:
At Diageo, we strongly believe that, as access to clean water and sanitation are fundamental human rights, all efforts should be made to achieve this global goal. Access to water is central to gaining an education, sustaining health and increasing employability, and it addresses gender inequalities in communities, since women carry most of the burden of water collection.
We fully appreciate the enormous positive impact of investment in WASH and chose to be a key business partner in this ground-breaking study so we could finally prove the case for investment through solid research and data, and share the message with other businesses.
We will take the findings and incorporate them across our business strategies. The strong, quantitative evidence is what we need to support the investment in WASH facilities which play a key part of our Environmental, Social and Governance (ESG) action plan: Spirit of Progress 2030, and we now have the data and evidence to accelerate this work even further.
Future-proofing supply chains
Investing in water and sanitation facilities must be considered a core business priority and part of a water stewardship strategy, rather than an act of philanthropy or corporate social responsibility. No longer to be seen as a charity gesture, or a way of green-washing the business, but as a wise and smart way to future-proof: for communities and for businesses to thrive.
Businesses must now think beyond the immediate factory fence and look to their supply chains and to their employees’ welfare within.
As more extreme weather events happen globally, and ever-growing populations mean increasing demand for water, more companies need to follow suit and have a greater presence on the global stage to address the crisis. Businesses have a vested interest in securing sustainable access to water, and now, a clear financial incentive to ensure lasting change.
If businesses, governments, and civil society rally together, important ESG criteria can be addressed, and sustainable development goals (SDGs) to achieve 100% access to safe and sustainable water, toilets and hygiene facilities by 2030, can be fulfilled.
*Ruth Loftus is Senior Private Sector Advisor at WaterAid and Michael Alexander is Global Head of Water, Environment and Agriculture Sustainability at Diageo.
IPS UN Bureau