WWF: Water is a 'long-term risk'

Water weighing on investors' minds, says WWF

NGO calls for 'stewardship ethic'

The toll industry takes on local water tables will become of increasing importance to investors as the planet heads towards a thirstier future, the World Wildlife Fund (WWF) has warned.

The warning will be of significant importance to the brewing sector as it struggles to reduce the burden it puts on water resources.

“Investors are just beginning to twig that water is a long-term risk issue for the companies they invest in,” David Tickner, head of fresh water programmes for WWF-UK, said in a presentation hosted by SABMiller and the NGO on Friday.

“Companies that are being seen to practically deal with the issue may become more attractive to investors.”

Within the next 20 years global water supply will be 40% short of demand, according to the 2030 Water Resources Group, a consortium that includes SABMiller, Coca-Cola, the World Bank and McKinsey.

By 2030, one in three will have access to only half the water they require if nothing is done, the group has warned.

“We need a stewardship ethic in our approach to water management,” said WWF–UK CEO David Nussbaum, who added alliances between governments, multinationals and international NGOs are required to avert shortages.

Last year studies undertaken by the WWF and SABMiller revealed the total cost of beer production, from agriculture through to production, on local water resources in the Czech Repuiblic and South Africa.

Thanks largely to South African farmers’ reliance on irrigation to water their crops, the total water required to produce a litre of beer in the country was calculated at 155 litres. In the Czech Republic the ratio was 45-to-one.

As well as working with suppliers to reduce water-use throughout its value chain, SABMiller has vowed to cut use within its own doors to 3.5 litres of water per litre of beer brewed by 2015, a reduction of 25% on 2008’s figure.

“It will not be easy to achieve,” SABMiller CEO Graham Mackay said at today’s presentation. “Not all the technologies to do that are fully established. There’s still a lot to be done.”

Mackay said anaerobic digestion had become standard throughout SABMiller’s global operations and the provision of appropriate water treatment facilities, including desalination, “created a burden on investment”.

But he warned: “If nothing is done to eliminate the problem it will simply depress the economy and depress the quality of life.”

While the brewer has set itself ambitious targets for cutting its water-use, Mackay conceded that in absolute terms SABMiller’s demands for water will increase in coming years.

“I would hope that our volumes will increase by more than 25% by 2015, through acquisitions or even organically,” he said.

Image courtesy of Francesco Marino