Businesses Can (and Should) Help the World “Build Back Better” in the Era of COVID-19

Businesses Can (and Should) Help the World “Build Back Better” in the Era of COVID-19

By Lillian Holmes

What does it mean to “build back better” as the global economy seeks to recover from the shock of COVID-19? The international environmental community has proposed a “green” global recovery that prioritizes reducing greenhouse gas emissions as governments work to create jobs and stimulate economic growth. But many of the worst, most visible impacts of climate change will be felt through our relationship with water.  

The “green” recovery to COVID-19 must also be “blue”: to build back better, we must make our water systems resilient to potential major societal disruptions, including global pandemics, natural disasters such as earthquakes and tornadoes, and severe recessions. A robust economic recovery goes hand in hand with water stewardship  and ultimately with long-term water resilience. 

Rebuilding and Resilience,” a new issue brief from the Pacific Institute that completes the Business Framework for Water and COVID-19 brief series, outlines how businesses can promote a blue recovery. The brief offers mid- to long-term recommendations to create a just and water-wise society, with a focus on practical actions for businesses.  

The series features examples of businesses acting on these issues and connects businesses to capacity-building resources. 

Mid-Term Investment to Build Back Better 

Businesses should consider the economic benefits of investing in water efficiency and drinking water, sanitation, and hygiene (WASH) access for workers and communities, argues Phase 2 of the framework, “Building Back Better — a “Blue” Economic Recovery.” The brief recommends that cost savings from these practices are reinvested in communities. 

Water efficiency is often the first action a business takes when beginning its water stewardship journey, as efficiency improvements can offer a short payoff period — as one example, UK beverage company Diageo plc reduced the volume of its water withdrawals by nearly one million cubic meters in 2014 and estimated the associated cost savings at US$3.2 million total that year.  

Investments to expand WASH access offer a similarly compelling business case; the World Health Organization estimates that for every US $1 invested in water and sanitation, US $4.30 is generated in economic returns through increased productivity.  

The cost savings from these measures can be reinvested in actions that benefit business and communities alike by creating jobs and building long-term water resilience. For example, nature-based solutions often require a longer implementation period yet demonstrate a compelling return on investment: the Dow Chemical Company saved an estimated US$282 million by installing a wetland instead of a conventional treatment plant while still ensuring regulatory compliance. Investment in these and other stewardship activities creates jobs and builds resilience.  

These investments should not be limited to a companies’ own operations. Water stewardship investment in supply chains can yield powerful results for business stability, community health, and environmental resilience.  

While WASH investments across the supply chain were discussed in the first issue brief in this series, this second brief explores other kinds of water stewardship investment that benefit businesses and supply chain partners alike. 

Finally, as government stimulus policy continues to be revised and expanded, the business community has a role to play in advocating for a “blue” economic recovery. Organizations including the European Parliamentthe International Energy Agency, the C40 Mayors, and the World Economic Forum have issued calls for a green recovery that will speed the transition to a climate-neutral economy (in contrast to the 2008 recovery, which is said to have yielded greater greenhouse gas emissions). In addition to amplifying these “green” messages, businesses can advocate for “blue” government stimulus policies 

Such “blue” policies go beyond mitigation measures to support adaptation through investment in public water infrastructure, broader WASH access, and better industrial water use standards. By demonstrating the business community’s need for smart water policy, businesses can broaden the recovery conversation to include these crucial issues. 

Looking to the Long TermDevelop Water Resilience 

The third and final phase of the Business Framework for Water and COVID-19 brief series, “Catalyzing a Water-Resilient Society,” focuses on long-term actionsestablishing strategies for resilience and accountability at the corporate level and supporting transparent water governance at the national level.  

An effective corporate water risk strategy begins by understanding water stewardship not as a philanthropic activity that’s external to business’s core activities but as a crucial element of managing business risk. There is a powerful business case for water stewardship to promote supply reliability, generate buy-in from local stakeholders, and protect the long-term viability of a business’s operations. Given the links between climate and water, effective risk management requires assessing potential future water risks based on different climate scenarios. 

Although some water risk depends on a company’s individual actions, much of the water risk faced by a company operating in a given basin depends on the context of the watershed as a whole. The shared nature of water challenges compels businesses to engage with other actors in a basin, including public agencies. By engaging with these actors in a balanced and transparent manner, businesses can best promote effective water governance, which can even lower the cost of doing business by successfully managing water issues.  

With these goals in mind, leading businesses in the water stewardship space have formed the Water Resilience Coalition, an industry-driven, CEO-led coalition of the UN Global Compact’s CEO Water Mandate that aims to elevate global water stress to the top of the corporate water agenda and preserve the world’s freshwater resources through collective action in water-stressed basins and ambitious, quantifiable commitments 

The “Rebuilding and Resilience” brief aims to connect businesses with these and other resources that establish the business case for action on water in the era of COVID-19. The pandemic has shown WASH access to be more pressing than ever and made clear the need for greater resilience in the supply chain. The Business Framework for Water and COVID-19 briefs and other publications in the Pacific Institute’s Water and COVID-19 series explore these issues and opportunities for businesses and governments to “build back better.” 

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