2030 WRG in the News
This article was originally published in Reuters Events and can be found here.
As Davos goes online this year, Oliver Balch talks to Dominic Waughray of WEF’s Centre for Global Public Goods on the 50-year-old organisation’s approach to bringing about long-term, effective system transformation.
The World Economic Forum’s (WEF) annual summit looks and feels remarkably different this year. Obliged to shift online because of the pandemic, there are none of the usual snow-covered vistas or private jets associated with the Swiss ski resort of Davos, where the meeting usually takes place in the last week of January.
Yet, the less glittery vibe is not the only change. As the suite of special addresses, leadership panels and webinars testify, this year’s online version of WEF reveals a marked shift in tone and focus. In the shadow of Covid-19, sustainability has gone from being part of the summit agenda, as in previous years, to the agenda.
For Dominic Waughray, the attention now afforded to themes such as “healthy future”, “fairer economies” and “better business” is as timely as it is necessary.
There is no time to wait, says the managing director of WEF’s Centre for Global Public Goods. When it comes to “how to save the planet” (Waughray’s brief, in short, and another key theme for the summit), the next 10 years are do or die. Or, in his words: “It’s no good mobilising in 2031.”
We’re in a very, very unique moment in human history … sustainability is a cresting mainstreaming issue working across all horizontals
As for timeliness, the tectonic plates needed for macro change are – in his view – finally swinging into line. Think: radical innovation, automated technologies, detailed environmental data, public awareness, and, above all, a new spirit of public-private cooperativeness.
“We’re in a very, very unique moment in human history on this one … this [sustainability] is a cresting mainstreaming issue that is working across all horizontals of the economy.”
Mainstreaming, in essence, is what WEF is all about. Almost unique among international organisations, this 50-year-old institution has the power to convene heads of states and captains of industry on the same platform.
That explains the razzmatazz and podium speeches (phenomena that will return in May, assuming WEF’s plans for a physical meeting in Singapore come off), but it also clarifies the efforts to back up blue-sky debate with real-world action.
One example is its new BiodiverCities by 2030 initiative, launched at the summit. WEF is convening a high-level commission of 25 world-renowned experts and practitioners from across government, business, academia and civil society to develop a practical framework to assist city authorities to adopt more “nature-positive” models of urban economic growth.
The initiative will draw on WEF’s UpLink platform, a “digital crowd-engagement” network that links together development-minded entrepreneurs, and is heavily backed by the government of Colombia, a country keen to demonstrate its investment credentials after decades of conflict.
What this framework will look like and how it will be used are questions that still await answers, concedes Waughray. Of course, unknowns are true of any new project, but for WEF’s mode of working, blank sheets are nothing to be feared.
Dialogue and debate may well lead to a ‘different kind of drumbeat’
“We can break issues down and turn them into actionable chunks of work, which we then draw key stakeholders around to help.”
At any one time the Geneva-based organisation runs around three dozen working groups on issues as diverse as the internet of things and quantum computing to inclusive economics and the fourth industrial revolution. Collectively, these cross-sector Global Future Councils bring together more than 800 subject experts from around the world.
The Platform on Global Public Goods, which Waughray heads up, has programmes focused on agricultural development in Asia and Africa, natural climate solutions, ocean health, decarbonised freight, and product reuse, among others.
Critics of such multi-stakeholder approaches habitually deride them as procedurally protracted and structurally unambitious – two claims Waughray wholly refutes.
Dialogue and debate may well lead to a “different kind of drumbeat” than a more campaign-oriented organisation, he concedes, but they don’t necessarily preclude speed or prohibit experimentation.
Citing BiodiverCities by way of example, Waughray says once a working model is agreed, the intention is to test it in practice and encourage its rapid roll-out. A classic path to innovation, in short.
Waughray, who began his career as a natural resource economist at the UK’s Institute of Hydrology, helped steer one of WEF’s most impactful programmes, a global cross-sector endeavour designed to improve how the planet’s water resources are valued and managed.
Launched at Davos in 2010, the Water Resources Group kicked off with three, relatively small-scale demonstration projects. Today, the programme (now housed in the World Bank) has supported water projects in 21 countries that total more than $893m in investment and have cut more than 523m cubic meters in water extraction.
A space like the World Economic Forum that can bring together different stakeholders is hugely important
For Waughray, the Water Resources Group’s success highlights a number of truths about multi-stakeholder working. First, and most importantly, it puts the “basic plumbing” in place for bringing about long-term, effective system transformation.
“This is not something that will happen just in one meeting. Nor is it something that will happen because of one report. It requires this sort of structured process to go through.”
Second, it brings the people on board who need to be on board. Every industry has its fast-movers and its laggards, he notes.
Critics see a willingness to work with the latter as evidence of lack of ambition. But what, Waughray argues, if their non-involvement later becomes an impediment to change?
The founding partners of the Water Resources Group, for instance, included beverage giant Coca-Cola, which at the time was embroiled in a fight over its alleged depletion of freshwater reserves.
Macro-challenges bring with them an “enormous set of intricacies and challenges”, Waughray insists: “That’s why a space like the World Economic Forum that can bring together different stakeholders who’ve got knowledge [and] influence is hugely important.”
This year’s WEF annual summit may be sadly lacking in après-ski parties. But never have the invitations or the opportunities for people to join sustainability’s dancefloor been greater – nor more urgent.
This article appears in the January 2021 issue of the Sustainable Business Review.
The country’s industrial parks have led the way on ZLD treatment – can the authorities make it into a commercially sustainable business?
Ethiopia’s Industrial Park Development Corporation (IPDC) is preparing to roll out a series of measures aimed at improving the financial sustainability of its flagship zero liquid discharge (ZLD) wastewater treatment plants located in the country’s industrial parks.
Industrial parks form the cornerstone of Ethiopia’s industrial development strategy, attracting a mix of light industries, especially textiles. They are managed by IPDC, a state-owned corporation. Environmental and social impact studies carried out when the parks were first planned a decade ago recommended that IPDC use ZLD at four sensitive locations to minimise its impact. But the first of the four plants, the 11,000m3 /d Hawassa Industrial Park WWTP commissioned in 2016, has been plagued by poor cost recovery, with its income currently covering just 35% of operating costs.
With three more ZLD plants due to come online this year, IPDC commissioned the World Bank’s 2030 Water Resources Group (2030WRG) to help it address the financial shortcomings. “There are a lot of advantages to ZLD but being beginners in this field, we didn’t anticipate the operational challenges,” Mergia Kuma, head of IPDC’s Environmental and Social Compliance Directorate, told GWI.
“We had to incentivise investors to come here, and wastewater treatment is something that they need, but it cannot continue like this.”
The plants were all funded by the state and built by Indian ZLD specialist Arvind Envisol. The Hawassa plant been operated by Arvind since commissioning. IPDC is now about to take over the O&M of the plant: this will generate some immediate cost savings, notably with the reduction in the number of Indian expatriates working on site, but IPDC is likely have to make further adjustments to make them cost-effective.
Mekuria Tafesse, Ethiopia country coordinator at 2030WRG, told GWI there were two main issues. “The problem with the wastewater tariff is that it is low by international standards: $0.80/m3 . Also, the tariff only deals with the volume of effluSource: Alamy THE ZERO-LIQUID BUSINESS Ethiopia’s Hawassa Industrial Park has become the starting point for the country’s ZLD wastewater ambitions ents generated and not with the contamination load,” he said. What the study also found is that although industrial customers prefer the high-quality water produced by the ZLD plant, they have not been asked to pay for it. “They pay for water from the borehole, but they don’t pay for the recycled water at all. It’s a paradox,” Tafesse added.
In order to increase cost recovery to around 60%, the 2030WRG study recommends that IPDC should introduce a tariff of $0.37/m3 for treated wastewater. This tariff and the wastewater tariff should then be adjusted by 2% every year. The models also require that the plant increase water recovery to its design capacity of 85%, as opposed to 60% currently. To boost cost recovery closer to 100%, IPDC will also have to nearly double its wastewater tariff to $1.50/m3 .
IPDC has approved the cost recovery models as a decision-making tool; the board will now have to decide how far they want to take the cost recovery. This is a political decision and a sensitive issue for Hawassa Industrial Park, where tenants have enjoyed free water for the past four years. “We have had informal discussions already and they are positive,” said Kuma. “But they have emphasised that it should be reasonable.”
For the three industrial parks where the plants are approaching commissioning, IPDC will be able to make a fresh start. “We have already informed tenants at Adama Industrial Park [the most advanced] that they will have to pay for the treated water,” said Kuma.
Tafesse said that ultimately, the matter of how these plants are run was one of policy. “We need to pitch the problem at policy level because Ethiopia has adopted the Climate Resilient and Green Economy Strategy,” he said. “These plants perform an essential environmental function. Without them, international buyers will not be able to meet their strict environmental compliance standards either. So what is the government prepared to do in setting tariffs for wastewater treatment and for recycled water in line with the polluter-pays principle?”
The November 2020 issue of The Ethical Corporation Magazine (view whole edition) featured 2030 WRG in two separate articles. Angeli Mehta reports:
The World Bank’s 2030 Water Resources Group and Ceres’ Valuing Water Finance Taskforce are among groups coordinating collective action to address water scarcity as a systemic risk.
“Water, water, everywhere nor any drop to drink,” vividly sums up the sorry situation of a ship’s crew becalmed near the Equator. That often-quoted line from Samuel Taylor Coleridge’s poem about an ancient mariner who disregards nature could well stand for our predicament today.
Our fast-changing climate is bringing rising sea levels and flooding, but it’s also making fresh water an increasingly scarce resource – another layer to add to the crisis already caused by pollution and over-consumption. By one estimate, if it’s business as usual, global demand for water could outstrip supply by 40% by 2030.
Freshwater ecosystems are crucial for our survival. They are also biodiversity hotspots, and that biodiversity is being lost at an astonishing speed. The International Union for Conservation of Nature estimates that almost a third of freshwater species face extinction.
Discussions are under way through the Convention on Biological Diversity to get countries signed up to restoring freshwater habitats as part of a drive to have 30% of the planet in a natural state by 2030.
The finance sector can’t afford to ignore the imperative. In June, De Nederlandsche Bank (DNB) analysed biodiversity risks in a portfolio of more than €1.4tn worth of investments made by Dutch financial institutions. It found that 36% of their investments are highly, or very highly, dependent on ecosystem services – with the highest dependence on the ecosystems that provide groundwater and surface water. Of every euro invested, approximately one quarter is dependent on these ecosystems.
In September, 26 financial institutions – together managing over €3 trillion (£2.7tn) of assets – have added their voice, calling on world leaders to reverse nature loss in this crucial decade. In signing the Finance for Biodiversity Pledge, they’ve committed to shouldering their share of responsibility through their financing activities and investments. They say they’ll share methodology and metrics that will have a positive impact on biodiversity, and engage with the companies they invest in.
The organisations will also assess their portfolios for both significant positive and negative influences on biodiversity, and come up with targets to address those impacts, by 2024 at the latest.
Behind the pledge sits a set of principles developed over the past year by the Partnership for Biodiversity Accounting Financials. Dutch asset manager Actiam is one of the partners. It already screens companies based on both their water consumption and strategies for managing water, and engages with those who don’t measure up.
But more can be done to address biodiversity. “I think a lot of investors are now looking at the basics… climate and being carbon neutral – because this is demanded from them by the outside world. But next to that, I would hope that more investors are going to look at water, land use, species [loss] – although it’s a bit more difficult – as well as pollutants,” says responsible investment officer Colette Grosscurt.
“To really integrate those aspects into the screening of companies and investments could be very valuable to mitigate risks and benefit from opportunities.”
Getting up-to-date data as well as unpicking supply chains are key challenges to be tackled. Last year, Actiam teamed up with satellite imagery and artificial intelligence (AI) firm Satelligence to check on whether companies are meeting deforestation targets, and to investigate deforestation in their supply chains, starting with palm oil.
Water, specifically, is a typical public goods dilemma, suggests Grosscurt. “Even if a company may take up that responsibility [for a water basin] it’s not going to solve the issue. It has to be a collaborative approach, but with someone actually having the ultimate responsibility for it.” Her colleague, Nadja Franssen adds: “In many countries, water rights are allocated to a specific company. So then it’s also really easy to just shift the responsibility, because then you can say ‘the government has allocated me these rights, and they will take into account the environment, so I can just do whatever I want with these rights’. Well, that’s not always the case.”
Karin Krchnak, programme manager of the 2030 Water Resources Group (WRG), believes collective responsibility is crucial: “There’s not one institution, or even one set of stakeholders or actors that can solve water challenges.” The group, hosted by the World Bank, aims to mobilise the private sector, government and civil society to work in partnership on water security and help achieve the Sustainable Development Goals.
So far it has created 14 multi-stakeholder platforms in Asia, Africa and Latin America, involving over 800 partners. These cover sectors such as urban water management, mining and agriculture. Having government at the table also addresses legislative obstacles and enforcement. In Mongolia, for example, where mining and manufacturing industries foul diminishing groundwater supplies, introduction of the “polluter pays” principle, together with national standards for wastewater reuse, have encouraged industry to invest in treatment and recycling.
The 2030 WRG is also making the investment case for water, and developing new financial instruments to address the funding gap. One such success is in creating a new public-private partnership model to finance three wastewater treatment plants in India’s Ganga basin. Now the Indian government is looking at 15 more plants to tackle the 8bn litres of untreated wastewater that flows daily into India’s mightiest river.
Krchnak also wants to work with investors on best practices and metrics, which she said would “help drive greater understanding amongst the investor community on water-related risks and opportunities, including best practices in portfolio monitoring from a water perspective.”
US sustainability non-profit Ceres, which was founded in the aftermath of the 1989 Exxon Valdez oil spill, is also working with investors to develop tools to assess water risk. According to its research, around half of industries in the US economy face significant water risks. “There really needs to be a wake-up call,” asserts Kirsten James, programme director for water.
“The financial sector often thinks of water as a local issue, or an individual company [issue]. and they tend to look very narrowly. However, risks around water scarcity and water quality are systemic issues. And, across the board, there isn’t that clear sense of material or financial value of the freshwater resources at risk,” says James.
On water, she says, “we don’t really have the foundational thinking and business case that we do on the climate side, [or] clear universal language for companies around responsible water use.”
Together with the Dutch government, Ceres has launched the Valuing Water Finance Taskforce to draw attention to the scale and urgency of the challenge and to bring others to the effort. Fifteen founding members range from Nordic banking group SEB to superannuation and pension fund AustralianSuper, as well as a strong US presence including state comptrollers from California, New York and Illinois.
Kelly Christodoulou, listed ESG and stewardship manager for AustralianSuper, says: “Investors need a framework and to come together on this issue. This initiative will provide the assessment framework and tools for us to adequately assess water risks.” She said that AustralianSuper, which invests over A$180bn (£99bn) globally, recently had its equities portfolio assessed for physical risks. In addition to the on-going water stress in Australia, it identified flooding from typhoons in Asia as having an impact on the supply chains of Australian companies.
The other side of the coin is to for investors to have a positive influence on water resources and biodiversity. While Actiam’s impact investing arm is using microfinance loans to support specific local projects, it’s also looking into restoration finance. “There’s plenty of projects out there … but often they’re projects with a relatively low-ticket size. And then it’s challenging to channel money for that from our typical institutional clients,” says Grosscurt. However, she adds, “we strongly believe that by bundling various of these projects we can turn them into an investable product.”
Krchnak agrees that scale is an issue. “When we look at water, so many challenges are really around governance and policies. So you can have a great project, but if you don’t have the policies in place that enable its scaling or replication, then you’re stuck.”
One success is a pioneering drip-irrigation scheme for sugarcane farmers in Karnataka in south-west India, which began with 24,000 hectares. It is being scaled up to create an entire and sustainable supply chain from technology to market, across several hundred thousand acres and supported by a new financing model.
For Krchnak such advances give cause for optimism. “What we’ve been able to create are not just talk shops. They’re really delivering results. So I think we can turn things around. Will it happen in the next year or two years? I think probably not. But honestly, from the dedication I see from our partners, and governments, private sector, civil society all speaking together and working together, that really does make me hopeful.”
Angel Mehta talks to P&G’s Frantz Beznik about how the 50L Home Coalition brings together companies, regulators and governments to think big on tackling the urban water crisis.
Water plays a significant part in Procter & Gamble’s Ambition 2030 sustainability plan, with targets to deliver a 35% reduction in water consumption per unit of production (compared with 2010) and to source at least five billion litres of water – almost 8% of its consumption – from circular sources by 2030. But by far the biggest contribution to water consumption is the use of its products in the home.
As part of its efforts to address its total water footprint, the company is spearheading a new initiative, the 50L Home Coalition, where it is working with Electrolux, Kohler, Engie, Suez and Arcadis, the World Bank Group, WBCSD, and the World Economic Forum to develop radical solutions to the urban water crisis.
The coalition aims to bring together companies, policymakers and communities to develop and scale innovations across the entire domestic water value chain and prove that it is possible to create homes where people can live comfortably using 50L of water a day. That’s the amount that Cape Town’s residents were restricted to in 2018 when the city faced having the taps run dry, and is the minimum amount of water the World Health Organization (WHO) says is necessary to ensure that a person’s most basic needs are met.
Homes in Europe get through up to 300 litres a day, whilst in the US daily water consumption can be as high as 500 litres.
Frantz Beznik, head of sustainable innovation at P&G, says an ambitious goal such as 50 litres is needed “to create a mindset for very radical innovation”. One of the first tasks, working with Kohler and Electrolux, is to set a budget for each point of water use in the home – from the kitchen tap to the shower.
Water reuse is another big focus for innovation. Instead of sending wastewater from showers and washing machines to municipal treatment plants, Beznik anticipates that systems engineering and clever chemistry will enable some reuse of water, for example in toilets, with digital systems managing the processes and making water consumption visible to residents.
“The [area] that is actually taking most of our brain time is the reuse space – how we actually make water re-usable from one spot to the other and really starting from some pretty interesting questions [like] why we use potable water in toilets,” Beznik says.
Innovation groups within P&G, which are working to cut the company’s water consumption, will explore how any advances could be replicated in the 50l home. Outside the home, the coalition is thinking about how water treatment could be decentralised, so saving energy and creating more resilient systems.
Tackling water consumption will make a big dent in greenhouse gas emissions, since heating water for use and to warm our homes contributes to the bulk of domestic carbon emissions, Beznik points out. “The 50-litre home would really be the enabler to get to zero carbon. It will give people the ammunition to act on climate change.”
The coalition wants to team up with cities to pilot innovations. It’s in discussions in both China and the US, but is also eyeing India, where one of its partners, the 2030 Water Resources Group, has well-developed multi-stakeholder collaborations.
Angeli Mehta is a former BBC current affairs producer, with a research PhD. She now writes about science, and has a particular interest in the environment and sustainability. @AngeliMehta.
This article was originally published in the Daily News and can be found here.
IN a bid to ensure water sources management, the government said on Thursday that there is a need to enhance participation and involvement of both the media and private sector.
Permanent Secretary in the Ministry of Water, Engineer Anthony Sanga said this during the official opening of the 4th national multi-sectoral forum on water resources management and development, which took place on Thursday in the city.
“It is clear that most companies are doing well individually, but there is an opportunity for doing better collectively, which has the advantage of having a larger footprint in the quest for ensuring water security for all,” he said.
Eng Sanga further said that private companies have continued to engage and support various initiatives in ensuring water security for all through several initiatives, including water source protection, conservation, pollution control, and increasing access to water provision to the community through the drilling of boreholes among others.
The PS asserted that activities by the private sector are not well documented and highlighted in the media, thus called for more active participation of the media and private sector in promoting water resources management activities.
“In this regard, I call upon all stakeholders to put more efforts to ensure that the working groups are more effective, which will eventually lead to the efficient forum, more members should join the forum and groups,” he noted.
As the forum enters into its 4th year, he said it will be useful to reflect on its bigger vision, especially on its theory of change as well as instituting appropriate monitoring frameworks for checking progress and impact.
Earlier, the High Commissioner of Canada in Tanzania, Ms. Pamela O’Donnell said the private sector has a significant contribution to water resource management, thus it was crucial to ensure they are well involved.
Chairperson of the Multi-Sectoral Forum, Eng Mbogo Futakamba said water cuts across all sectors and is fundamental to human and environmental wellbeing, as well as economic growth.
“Strengthening collaboration and partnership among all water users is, therefore, key to the performance and long-term sustainability of all sectors of the economy,” said Eng Futakamba.
The forum carried the theme ‘Accelerating the realization of water security for all through enhanced multi-sectoral dialogues’ and was hosted by the ministry of water in collaboration with the 2030 Water Resources Group, Global Affairs Canada, and Shahidi wa Maji.
This article was originally published in BizCommunity and can be found here.
The recently held sixth annual Water Stewardship Event looked at how strengthened water sector governance and stewardship practices could provide a pathway for a green and inclusive recovery from the impacts of Covid-19. Over 200 water sector representatives were in attendance for the virtual event jointly hosted by the National Business Initiative (NBI), the Strategic Water Partners Network (SWPN), the Royal Danish Embassy and supported by GIZ’s Natural Resources Stewardship Programme (NatuReS).
According to the World Health Organization, washing hands with soap and water is the single most effective measure against the spread of Covid-19, putting equitable access to water and sanitation at the centre of the pandemic response. The National Water and Sanitation Master Plan indicates that only 65% of South Africans have access to safe and reliable water services while 14.1 million people lack access to decent sanitation.
Moreover, the South African water sector struggles with financial challenges and capacity restrictions, constraining its ability to bridge the service delivery gap, a situation exacerbated by the impacts of the pandemic. These challenges are aggravated by a lack of accountability linked to the governance, management, and oversight of the sector itself. With water as a key enabler of economic growth, there is an opportunity to leverage green and sustainable investments in the sector to support South Africa’s efforts to build back better.
In the opening session, Trevor Balzer, acting director general of the Department of Water and Sanitation, appealed to the water sector to “embrace the power of partnerships between private, public and civil society to work together to close the water gap through taking a water stewardship approach”. Balzer urged local and international investors to “come and invest in our water infrastructure which remains one of the most meaningful ways to create jobs, enable economic growth, reduce inequalities and support small, medium, and micro-enterprises”.
In a series of keynote speeches, panel discussions, and interactive Q&A sessions divided over two thematic sessions, participants explored what needs to be done to strengthen water sector governance and encourage the much-needed water investments required to support a post-Covid-19 green recovery.
Robust governance for sustainable recovery
The overarching message of the morning session was that strengthening water sector governance is a prerequisite to improve performance and bring about a much-needed recovery in the sector.
“Strong systems and institutions are needed to drive effective water resources management and expanding access to water and sanitation services,” said Martin Ginster, co-chair of the SWPN. “As we look towards the future, good water governance will be needed to ensure an adequate supply of water at an acceptable quality to prevent and fight future pandemics.”
For the public sector, this involves improving financial management and technical capacity at both national and municipal levels. Strengthening good governance requires a clear understanding of powers and functions, mandated responsibility and the inter-dependency between resource protection, usage, planning and development across all spheres of government. This understanding must be met with clear institutional arrangements that can further advance good sector governance.
In the private sector, while there is a strong focus on corporate accountability in terms of sustainability, there is a need to strengthen corporate leadership on water security specifically.
Throughout the morning, speakers emphasised the importance of greater participation and diversity of voices in decision-making as a means of strengthening transparency and accountability. Community-led good governance practice, whereby communities are equipped and informed on how to both engage with government and private sector stakeholders, as well as hold them to account for specific actions linked to water conservation and demand management, offers a proven avenue for strengthening accountability and transparency in decision-making. Examples of such action include participatory planning and budgeting processes, deepening understanding of procurement systems and participating in planning of projects that require a balanced understanding of economic development opportunities and natural resource protection measures.
Water investments for a post-Covid-19 green recovery
The focus of the afternoon session explored the opportunities afforded by green financing. The Covid-19 pandemic has served as a wake-up call over the reality of environmental risks with human-related causes. As governments all over the world, including South Africa, make significant investments into emergency support programmes, there is a need to ensure recovery packages honour the balance between jump-starting economic growth and restoring jobs as well as protecting natural capital.
The session was opened by Tobias Elling Rehfeld, the Danish ambassador to South Africa. In his address, he urged the sector to rapidly scale up investments in order to achieve the country’s water and sanitation delivery goals. Such investments can also be an important lever of economic recovery. “Water infrastructure investments in particular are crucial to stimulate growth and job creation,” he said, pointing to the sector’s funding deficit of approximately R300bn over the next ten years. “South Africa needs all hands-on deck, and Denmark is ready to step up our support in terms of partnership programmes, water sector technology and finance.”
Opportunities for sustainable investing in the water sector include reducing water losses, repairing and maintaining water infrastructure and enabling nature-based solutions to achieve water security and improved water resource management.“Investments in water should be used to build greater resilience and more effective management of water-related risks. At the same time, we need to reinforce water governance to ensure the reliable delivery of water for priority uses,” said Alex McNamara, water and climate manager with NBI, who provided an overview of key takeaways in the closing session. “Covid-19 has reinforced the importance of access to safe and reliable water, and we have a responsibility to learn from our experience over the last year to build back greener, stronger, and better.”
Source: Business Green
30 July 2020
Consumer goods giant unveils latest commitments from its recently announced €1bn ‘nature and climate fund’
Unilever has set out plans for a raft of water management and conservation projects over the next decade, as the consumer goods giant unveiled the latest investments from its recently-announced €1bn ‘nature and climate fund’.
The British-Dutch multinational yesterday said it would partner with the 2030 Water Resources Group (WRG) and the Alliance for Water Stewardship on several projects supporting water management resilience in key water-stressed countries including Vietnam, India, Brazil and South Africa.
WRG, a multistakeholder platform coordinated by the World Bank, will help implement projects at water-stressed sites surrounding manufactoring facilities in five of Unilever’s key markets – India, Brazil, South Africa, Vietnam and Indonesia – it said.
The work aims to build on Unilever’s collaboration with the WRG and the Red Crescent Society in Bangladesh, which helped supply clean drinking water for hospitals with Covid-19 patients, according to the consumer goods giant.
“With growing water scarcity challenges, exacerbated by climate change, it is more critical than ever for stakeholders to join forces to advance water security outcomes,” said World Bank vice president for sustainable development and co-chair of WRG, Juergen Voegele. “We are delighted to welcome Unilever as a global 2030 WRG partner, with its core commitment to the principles of water sustainability, equitable access and livelihood security.”
In addition, Unilever is to join the Alliance for Water Stewardship and trial the organisation’s AWS Standard, a global framework for water stewardship in select water-stressed sites, it said. The partnership is also aimed at helping Unilever expand its Prabhat water programme, which has been implemented in eight manufacturing sites to address gaps in water supply and demand in India, according to the firm.
It follows the launch of three 2030 water sustainability targets from Unilever last month: to make its product formulatons biodegradeable; to implement water stewardship programmes around 100 Unilever manufacturing sites; and to join the 2030 Water Resources Group.
Water scarcity and poor water quality affects 40 per cent of the world’s population, according to the World Bank, with more than 2.1bn people consuming unsafe drinking water. Last month, UN-Water, which coordinates the United Nation’s activity on water and sanitation, announced that the world was “alarmingly off-track” in meeting Sustainable Development Goal six to deliver clean water and sanitation for all.
“We all know water is critical for lives and livelihoods; yet we are wasting it, polluting it, and taking it for granted,” said Unilever CEO Alan Jope. “We need collective action to solve a water crisis that is wreaking havoc in villages, towns and cities across our planet.”
The water-focused commitments are part of a range of climate and environmental initiatives announced by Unilever last month in the form of a €1bn ‘nature and climate fund’, which is aimed at supporting the firm’s target to reach net zero emissions across its value chain by 2039, backed a range of initiatives including landscape restoration, reforestation, carbon sequestration, wildlife protection, and water preservation projects.
India’s highly industrialised Maharashtra region hopes to increase wastewater treatment and recycling through a novel trading mechanism for reuse certificates.
The Indian state of Maharashtra and the 2030 Water Resources Group (WRG), a partnership hosted by the World Bank, are planning to launch a platform enabling trade in wastewater reuse certificates (WRCs), in an attempt to incentivise greater levels of reuse.
Maharashtra’s water sector regulator, the Maharashtra Water Resources Regulatory Authority (MWRRA) and the WRG are overseeing the initiative, in which companies and municipalities will be awarded certificates by hitting wastewater reuse targets. These can then be traded, with organisations that do not meet their targets required to buy certificates.
While certificate trading is established in the energy space in India through renewable energy credits, the idea is new in the water sector, where the uptake of wastewater treatment and reuse technology has been plagued by low water tariffs and inconsistent regulatory oversight.
Inspired by the energy and emissions trading sector, the proposal will focus on building an economic instrument by setting up a transfer and trading platform, similar to the Indian Energy Exchange, and developing a market-based mechanism for carrying out these transfers.
Comparing the initiative to other models of trading environmental commodities, a senior official from 2030 WRG in India told GWI that regional markets for carbon trading are quite active, but that using the concept in water reuse will come with its own challenges. “The WRC, although it draws its concept from such examples, is complex to handle due to challenges pertaining to water quality assessment,” the official said.
The WRG is looking to take on consultants to help define the guidelines for the WRC trading platform, advise on a detailed roll-out of the plan, and formulate a handbook to act as a training resource. The proposed trading platform is planned to use IoT-based metering and blockchain-linked distributor ledger techniques. The WRC initiative is initially intended to be rolled out in Maharashtra and potentially Bangladesh, but may eventually be considered for other countries such as Vietnam, Ethiopia and Brazil.
“Assuming WRCs are rolled out for industrial and commercial segments, an initial market example for Maharashtra could be ten municipalities and 30-odd industries,” the senior official told GWI. “The top 20% of water users may be a part of this trading platform, and market players will increase as reuse opportunities are harnessed for smaller housing societies. If this scheme is rolled out, initial calculations show a market liquidity of $800 million or so, as an annual trade in the state of Maharashtra alone.”
Certificates may be valid for a period of two years, depending on market liquidity, and the official added that “although daily trading may not be possible initially, monthly trading can be implemented once market participation gains momentum. We expect further development of the WRC structure to take place during the calendar year 2020, and a roll-out during 2021-22.”
The MWRRA has formulated a draft regulation, the MWRRA Water Entitlement Transfer and Wastewater Reuse Certificates Platform Regulations, 2019, and it is currently awaiting final notification from the state government. Speaking to GWI, the chairman of the MWRRA, KP Bakshi, said while the government is reviewing the regulation, the MWRRA is undertaking preparations on other fronts, including target preparation guidelines, monitoring, exchange tariffs, and other aspects emanating from the regulation. The MWRRA is also the tariff-setting body in Maharashtra, allowing it to price the WRCs in a way that ensures viability.
The issuance of WRCs will be carried out by MWRRA on the trading platform, with certain floor and ceiling prices for the certificates as a tradeable permit. “Regulators can consider a cascaded level of WRCs, such as platinum, gold and silver, based on the quality of treated water available for reuse,” the 2030 WRG official said. “MWRRA will set targets for the reuse and recycling of water for all stakeholders, the transfer of entitlements from one entity to another, and freshwater entitlement data.”
According to Bakshi, “urban and industrial water consumption account for around 15% and 10% of water use in Maharashtra, respectively, and these sectors have been selected for the initial roll-out. The concept of the WRC is target-based as per the mutual agreement with an urban local body or an industry with the MWRRA. Certificates would be awarded for exceeding targets, and they can then be redeemed or exchanged in the market.” He further explained that the MWRRA led the development of the Integrated State Water Resources Plan for Maharashtra, approved in February 2019, which outlined ambitious plans for the reuse of wastewater, including the goal that 30% of treated effluent be reused by 2025, and 100% by 2030.
The MWRRA and WRG are now looking to create a sound framework for utilities, industries, and other stakeholders based on a ‘polluter pays’ principle.
Consultants are being sought to work with six utilities all trying to tackle the perennial issue of non-revenue water.
Kenya’s regulator, the Water Services Board (Wasreb), has issued a request for expressions of interest from consultants to assess the suitability and design of performance-based contracts (PBCs) to reduce non-revenue water (NRW) at six utilities.
NRW is an ongoing issue in Kenya where it has averaged 42-45% in the last decade, despite significant efforts to address it. A 2018 audit of select WSPs commissioned by Wasreb indicated that 64% of NRW in Kenya was physical losses and 36% commercial losses. The report also found that despite the development of NRW management guidelines, their implementation among utilities was very low.
The studies are being financed by the World Bank and supported by the bank’s 2030 Water Resources Group (2030WRG). Joy Busolo, Kenya country coordinator for 2030WRG, told GWI that the idea of looking at PBCs was to incentivise a sector shift towards output-oriented programming rather than activities/input-based EPC contracts. “The PBC model’s value proposition to [utilities] in Kenya is that performance risk is transferred to the external contractor and remuneration is based on the achievement of performance targets,” she said. “In addition, it enables for the leveraging of private capital to complement scarce public resources.”
The utilities taking part in the pilot – Nyewasco (Nyeri), Nawasco (Nanyuki), Naivawass (Naivasha), Kacwaso (Kaka- mega), Eldowas (Eldoret) and Nawassco (Nakuru) – which are mostly average NRW performers, save for Nyewasco, were selected through a screening process by Wasreb. Busolo said that they are broadly representative of the challenges utilities face nationally.
The consultant is expected to assess the suitability of PBC to address NRW at each utility and to come up with a PBC project scope. Broadly speaking, the contracts will include two components: a fixed fee covering capital expenditure such as the creation of district meter areas, improvement of pressure control, repairs of leaks/connections, replacement of pipes etc., and a performance-based O&M fee to implement NRW reduction targets. Contracts are likely to be 4-5 years.
In a bid to ensure there is enough interest from the private sector, 2030WRG will organise a market sounding roundtable in 2021. “[This is] to gauge investor interest in the proposed projects and inform risk allocation approaches to NRW-reduction PBCs to ensure the transaction is consistent with private sector appetite and lender requirements,” says Busolo.
PBCs are new to the water sector so 2030WRG will provide support to the utilities involved in the pilot; it will also help Wasreb develop a national strategy for PBCs.
Interested consultants have until 23 March to submit their expressions of interest. Following this, Wasreb then expects to issue the final RFP to shortlisted companies in April, with a submission deadline of late June and a contract award in late 2020.