I interviewed Robert Kuhn who discussed Water Issues Related to Corporate Supply Chains.
Can you first provide a brief background of yourself and this topic?
Sure. Thank you for having me today. This topic interests me on a personal level because I recognize that water is really our new CO2. This is an issue that affects us all and will have profound impacts on our ability to have meaningful and healthy lives, obviously.
From a corporate perspective, I'm interested in this because as a sustainability consultant, first I need to help them identify, but I need to help them identify and address a wide range of relevant environmental and social issues, which are particularly challenging in their supply chains.
For advanced companies, some of whom are my clients, but for many, many companies beyond the leaders, we have done a lot of work around climate change. And not that I don't still do work there, but I'm increasingly asked about water issues as they crop up, not just in a company's operations, but in their supply chain. So, generally, in their suppliers, what's happening with respect to those companies’ ability to manage water issues.
So, on a professional level, it's part of my consulting practice. On a more 30,000 foot level, if you will, it's clear that in order to advance sustainability worldwide, corporations need to take a role. So, if you look at the overview of where I've been in my life, I first practiced law—not in the environmental arena, in the business arena—and then I went and ran a manufacturing company for 11 years and ended up in consulting, in the sustainability space.
In my experience as a manufacturing executive, interestingly at that point in time, water issues rarely cropped up. There was one experience we had with respect to some discharges that my company made into the sewer system. Those were dealt with very quickly. And we moved on.
At that point, water was a compliance issue. You filed reports. You made sure you weren't running afoul of the law. And if you were, you remedied what you were doing.
Today, it's such a key strategy issue for companies as they move forward, trying to be good global citizens. So, that's why I'm intrigued and how it fits with my background.
Can you talk about some of the causes of these water issues?
Water issues—there are really two—come from a variety of sources. Let me explain to two different issues. First, we're concerned about the quality of water. So, we usually call this water pollution. So, these are things we might do in a business context that end up degrading the quality of water. It may be right next to us. It may be down the road a little bit. But these are quality issue.
We also have consumption issues, which is really about the quantity of water available. Generally, we want to make sure that we're not, as a business, consuming too much water that's in an unsustainable manner. Now, those are quick definitions, and the details are a little trickier, because unlike greenhouse gas emissions, which are thought to cause climate change and are global in nature, water is a very local or regional issue. Water comes either out of aquifers that have been around for a very long time, or groundwater, if it's replenished from rain, which may come locally, or may come from snow packs, or rain that has accumulated in mountains and comes through streams.
But water issues in one area are not particularly related to those in a faraway area, except for the possibility that you could buy things to put into your business that come from one of those areas. Then you kind of buy into the water issues in one of those areas. So, we're concerned with both quality and quantity. And we're concerned with them in several areas.
We're concerned with them in the buildings and land that our businesses occupy and operate. So, there may be things that we're doing there that are problematic. So, if we have a beautiful building with a large lawn that we water all the time as our corporate headquarters, that may not be a sustainable solution. We may want to find ways to landscape our buildings in a different way that uses less water, or be able to reclaim water from maybe gutters and other onsite sources, so that we can reuse those to landscape. It's a very small, simple example.
But the more difficult examples are generally around the processes that go on in business. So, manufacturing processes, packaging processes, painting processes, chemicals that are put into pharmaceuticals all involve the use of water in that process.
The most obvious examples are the companies that sll water. So, Coca-Cola sells Coke and Dasani water and other brands sell things that actually have water in them. And that's obviously a real issue because the water need to be pure. And it needs to be not taken out in such quantities that deplete the aquifer. Because other people use that aquifer—other companies, communities. So, that becomes an issue if you as a corporation are pulling too much out and depriving others of water.
So, we could do things that do that. We could also do things that pollute. So, we may have processes in our manufacturing centers that end up discharging things into fresh water that is supposed to be used by others that ends up rendering it polluted. So, we need to be careful about that, and that really requires us to identify processes that could discharge into to water.
An example... Many of my clients are in the apparel business. And a good amount of manufacturing in apparel requires dyeing the fabric or tanning hides. Both of those processes use water. They do have consumption issues, because some of that water evaporates and gets pulled out and never reused, but they really have a lot of pollution issues. You've seen pictures of rivers in China that are associated with factories that are doing apparel work. Downstream from that river, the color for the given day is whatever they're dyeing the fabric. And that's a real problem because that makes that water unusable.
So, we're looking generally at the buildings and land and the processes—primarily manufacturing processes. But we need to go a step further. That's our own business. Those are the four walls, as we call it, of our business.
But in today's thinking, you don't only have a responsibility for what goes on in your four walls. You, in a sense, have a responsibility for what goes on in your supply chain. And there are a variety of reasons this is true. Sometimes regulations require that. Sometimes other stakeholders require it, including customers are saying, "Mr. Smith, you run company A, and we buy from you. We need to know what the water issues are in your operations and in your supply chain." So, now you need to go figure that out.
So, everything I've just talked about in the company's operations, you need to now look out into your supplier's operations. And that becomes a tremendous challenge.
What about ways to solve these issues?
The first thing you need to do is identify the issues. There's a number of tools out there that can help you calculate what's called your water footprint, which can address consumption issues. So, you will calculate how much water you're consuming and not returning. And it's also possible to do that throughout your supply chain.
And once you make those calculations, you can identify what we call hotspots, areas where you need to go and rapidly address the problems. It's a prioritization tool, basically. And when you get to the high priority areas, the first thing you want to do with regards to consumption is see if there are leaks, see if there are ways to reduce the consumption, change the process.
Coca-Cola, for example, in India, was called to the administrative offices of a territory, because the territory managers learned that Coca-Cola was using too much water. This was in their operations, not in their supply chain. But they got a call. And they were brought into the offices and they were told that they were going to lose their license to operate in that area, unless that corrected this problem.
Corrections for them, generally were around fixing leaks, finding different ways to make things more efficient with the use of water. So, for example, instead of cleaning bottles by washing them, they now use air at very high pressure, which can remove all contaminants. So they ended up using less water, and got the green light from the local authorities to continue in business.
Pollution, same way.We're going to walk through all of our water related activities. We're going to list them. We're going to get a team of managers together from our operations and from our real estate, and we're going to talk about everything that could discharge water. We may not even know about some of the processes. But hopefully, we do. And I've walked through companies with this and it actually ends up telling them about places they didn't really understand.
When we get that list together, we're going to go and look through... Generally, companies have fairly good records regarding environmental issues around discharging things in water, because most legal jurisdictions around the world have regulators that look very closely at pollution. Or, at last, they are supposed to.
So, we want to go and first of all, make sure we have remedied anything we've received a notice about. But that may be the key to finding out where some problems are. So, we want to look back through that history and see where we've actually had action items around pollution that we've had to remedy. If we don't find those, then we really have to look at every process and make sure that there aren't any discharges that cause pollution. Not all discharges cause pollution. But we need to take a look and look at the standards for water quality that are applicable in that area, and they may allow us some wiggle room, or they may not. And we need to go through that on a step-by-step basis.
And if we're going out into the supply chain, then we need to collect the information from our supplies. So, you can see it becomes very time intensive, very resource heavy, and quite expensive, actually, for companies to get a handle on this. But those are some of the tools that companies use.
And thanks, Robert, for sharing today. Do you have any final recommendations?
My final recommendation would be for a company that has done some work in other areas and not in water, to start exploring the water area and find resources on the internet, through your trade association, through local government, through the environmental regulation agency, that can help you do that.
If you have not done anything in environmental areas, I would suggest looking at water very quickly, because this is rapidly becoming the huge issue for the communities that we live in. And companies will be held accountable for their water strategies. So, start now. That's my primary advice.
Thank you for sharing.
You're very welcome.
About Robert Kuhn
Sustainability/CSR | Supply Chain | Leadership