the water imperative: new standards in corporate water leadership
TRANSCRIPT
The Water Imperative:
New Standards in Corporate Water
Leadership
Conference Board of Canada December 4, 2014
OVERVIEW
• WWF: Water risk & tools
• RBC: FI perspective
• Molson Coors: Case study
• Q & A
2
Corporate water stewardship: Why mitigating water risk is increasingly material to business
Photo: © Alan Morgan
Alexis Morgan
Lead Advisor, Water Stewardship & Standards
WWF
WARNING: THE FOLLOWING PRESENTATION CONTAINS SOME GRAPHIC
WATER WARNINGS. VIEWER DISCRETION IS ADVISED.
R This is likely about your supply
chain’s exposure to various forms of water risk and the fact that no
site can mitigate that risk by itself.
Physical Risk
Reputational Risk
Regulatory Risk
Financial Risk
$
“Unless [extreme weather/water] risks are
accurately evaluated and reported, companies
will have limited incentives to reduce them.
And valuations and investment decisions will
continue to be poorly informed.”
– The Royal Society, Nov. 27, 2014 https://royalsociety.org/policy/projects/resilience-extreme-weather/
Where does your supply chain land?
Source: WWF-Mexico
• 8% of US food production
• $17 billion USD
• 90% world’s almonds
• Water supply for both San Fran & LA
(portion)
July 2011
July 2012
July 2013
July 2014
California’s economy needs to ask itself:
• What is the plan to balance water use?
• What is the optimal use of water?
Current Nov. 25
WATER
ENERGY (DAM)
FOOD
Water Stewardship
Water
Awareness
Knowledge
of Impact
Collective
Action
Influence
governance
Internal
action
WWF Water Stewardship Ladder
No strategy
Efficiency strategy
Risk strategy
Opportunity strategy
“The use of water that is socially equitable, environmentally sustainable and
economically beneficial, achieved through a stakeholder-inclusive process
that involves site and catchment-based actions.”
- The Alliance for Water Stewardship [bold and underline mine]
The bewildering landscape of water stewardship
Ceres Aqua Gauge
ISO 14001
ISO 14046
Starting the water
stewardship journey • Quantify your water footprint:
Quantify your direct & indirect water
footprint (your impacts and risks
are likely in your supply chain)
• Map your water risks: Map water
risks (Water Risk Filter) and identify
high priority areas for action
(prioritize risk and opportunity)
• Leverage existing initiatives:
Employ a comprehensive approach
that takes advantage of existing
efforts (e.g., AWS) and doesn’t
reinvent the wheel
• Collaborate: Establish collaborative
partnerships for innovative collective
action (stewardship is not a go-it-
alone exercise)
Short-term water
management
Long-term water
stewardship
Efficiency & cost
Effectiveness & value
Considering how you
affect others
Considering how others affect you
Working alone (within
industry)
Collaboration (between industries)
Risk
Why is a bank
interested in water?
Opportunity
Water is under stress
Threatened by:
• Population growth
• Pollution
• Climate change
Industries most at risk:
• Power generation
• Mining
• Semiconductor
manufacturing
• Agriculture
• Food and beverage
Also at risk:
• Investors
• Municipalities
(taxpayers)
Risk to our clients
Risks to our clients
• Rising costs of water supply and water management.
• Higher cost of compliance with ever-tightening water related regulations.
• Business disruption due to water issues such as significant storm events and flooding.
• Increasing competition for finite freshwater supplies among various users within a community.
• Reputational damage if a business is seen to be mismanaging water.
Risk to our Insurance business
• Observed 40% increase in
water related claims to our
RBC Insurance business
• Insurance Bureau of
Canada reports that water
damage is now the
leading cause of property
damage in Canada
• Already a significant
understanding of the
probable effects of climate
change
19
Risk to our Insurance business
Eastern Ice Storm
Quebec Floods
Slave Lake Fire
Ontario Wind and Rain
Alberta and Toronto Floods
$3.0
Insu
ran
ce C
laim
s (
$ b
illio
ns)
$2.0
$1.0
$2.5
$1.5
$0.5
Opportunity for our clients …Valued at $22.6 trillion
• Water efficiency
• Infrastructure
• Water treatment technology
• Filtration and desalination
• Metering and system management
IBM: “The smart water market will be
worth $15 - $20 billion a year.”
RBC Water Advice
Launched the RBC Greening Your Business Advice Centre in 2010
RBC Water Advice
Launched four sector specific reports on addressing top sustainability issues:
• Manufacturing, partnered with Canadian Manufacturers & Exporters
• Logistics and Transportation, partnered with Supply Chain & Logistics
Association Canada
• Agriculture, partnered with Farm & Food Care Foundation
• Retail, partnered with Retail Council of Canada
All four reports have an entire section dedicated to water
RBC Water Advice
Water damage sources:
• Basement flooding due to
sewer backup and
eavestrough overflow
• Broken or burst pipes
• Overflow or links from
tubs, toilets and sinks
• Leaks from appliances
• Leaks in cracks in walls
and foundation
• Water tank leakage or
burst
• Roof leaks – heavy wind,
heavy rain, snow and hail
damage
• Window and door seals
Reducing & Protecting Water in Our Operations
Commitments:
• Reduce the use of landscape irrigation in regions deemed water-stressed;
• Reduce the use of water by incorporating water-efficient technologies in our new properties or properties undergoing renovation; and
• Use environmentally responsible cleaning products in janitorial and cleaning services to help protect water quality.
Significant landscape maintenance savings associated with xeriscaping
RBC Blue Water Project
Since 2007, we have donated $42 million to over 500
organizations and initiatives
“The Blue Water Project is one of the most special projects that RBC has had in its history” said Gord Nixon, former RBC CEO
Employee Engagement: Blue Water Day
In 2013…
Our Approach to Water Stewardship
• Who we are
• What drives us to be good water stewards?
• Water Management at Molson Coors
• Lessons Learned
MOLSON COORS – WHO WE ARE
Molson Coors Canada Brewing Capacity: 12 Million HL Annually
41% Share of Market
MillerCoors Brewing Capacity: 103.7 Million HL Annually
29% Share of Market
Molson Coors International
Core Markets
Molson Coors Europe Brewing Capacity: 30.6 Million HL Annually
Share of market:
UK and Ireland 19%
Montenegro: 90%
Serbia 52%
Croatia: 44%
Bulgaria: 34%
Bosnia-Herzegovina: 27%
Hungary: 25%
Romania: 16%
Czech Republic: 15%
Slovakia: 5%
WHAT DRIVES US TO BE GOOD WATER STEWARDS
Evolution of Water Management at Molson Coors:
Focused on local compliance up to 2007
2008 – Signed the CEO Water Mandate
2009 - Developed more comprehensive strategy on water management
2013 – Adopted risk-based integrated sustainability strategy with water at the forefront
Drivers:
Stakeholder expectations on environmental stewardship
Business risk
WATER MANAGEMENT AT MOLSON COORS
Principles of the CEO Water Mandate:
Operations
Supply Chain and Watershed Management
Collective Action
Community Engagement
Transparency
OPERATIONS
Energy
• 25% energy
intensity
reduction
• Publically
commit to
Alternative
Energy
• Transition
from
managing
to carbon
Waste
• Zero
Landfill
globally
Water
• Risk-based approach to setting targets
and allocating resources for water
reduction
• We commit to breweries subject to
high water supply risk achieving
world-class water intensity
• Organic efficiency savings in all
breweries
• Anaerobic Digestion of Effluent and
Energy Recovery is a Strategic
Technology for Molson Coors
Operations Valuing Our Resources to Fuel Our Brands
WATER MANAGEMENT AT MOLSON COORS
Supply Chain and Watershed Management
Partnerships with suppliers to build water management capacity
Supplier Sustainability Scorecard
Engage with environmental authorities to address local issues
WATER MANAGEMENT AT MOLSON COORS
Collective Action:
Pilot projects – Partners in Project Green
Develop industry tools – BIER True Cost of Water Tool
Build community partnerships for water education and outreach – Tadcaster River Wharfe Community Group
WATER MANAGEMENT AT MOLSON COORS
Community Engagement:
WATER MANAGEMENT AT MOLSON COORS
Transparency:
Transparency: • Our strategy and transparency is
helping us to get recognised by some
of the leading sustainability indexes
• Long term proof of our water strategy
will be the our ability to continue to
Brew our brands in an increasingly
resource constrained world without
impacting on our communities
• Delighting the worlds beer drinkers!
LESSONS LEARNED
Conduct a materiality assessment to identify the issues and how
important it is to you – use this to develop a business case for
resources
Consumers care increasingly about traceability and
social/environmental stewardship of the products they consume.
Engagement with the community in the watershed and with your
supply chain can provide the visibility and ‘good story’ that you
need to connect with consumers
IS YOUR COMPANY
TRANSFORMATIONAL?
http://bit.ly/10EUdnA
Thank you!
