Business Water Risk, Policy Engagement, and Collective Action. Jason Morrison, Technical Director of CEO Water Mandate. Techniques and models to further water cooperation to improve water efficiency and water services in cities. International Annual UN-Water Zaragoza Conference 2012/2013. Preparing for the 2013 International Year. Water Cooperation: Making it Happen! 8-10 January 2013

1. Business Water Risk, Policy
Engagement, and Collective Action
Jason Morrison
UN-Water “Furthering Water Cooperation” Conference
Zaragoza, Spain
January 9, 2013

2. The CEO Water Mandate: Purpose
Launched in 2007 in a partnership between companies and the UN Global
Compact, the CEO Water Mandate is a business initiative dedicated to
advancing corporate water stewardship.
Function
1. The Mandate constitutes a call-to-action for companies to proactively
advance their water stewardship practices
2. It also provides a strategic framework, research, guidance, and tools
designed to help guide this process
Values and Assumptions
 Water crisis is increasingly a business issue
 Comprehensive sustainability strategies will be needed
 Sound implementation can benefit business and societies
 Collective action will be necessary

3. The CEO Water Mandate: Milestones
100 Total Number of
80 Endorsers
60
40
20
SE Asia Rio+20
0
Stockholm Workshops Conference
SG Davos Conference
Water Speech New York S. Africa Stockholm
Investor Istanbul
Conference Conference Conference
Inaugural Action Conference
Stockholm Copenhagen Marseille
Conference Stockholm
Constitution Seminar Conference Conference
Conference
Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2007 2008 2009 2010 2011 2012
Endorser Joins White Paper: Corporate
Survey Transparency UN-Water Climate and Water Online
Framework Water Accounting Capacity
Launch Platform &
Letter to Disclosure Water Policy White Paper: Website
the G8 Policy Disclosure Engagement Human Right
2.0 Guide to Water

4. CEO Water Mandate Workstreams
The Mandate’s current activities generally work to advance three
specific components of corporate water stewardship:
• Human Rights: Understanding and exploring corporate
responsibilities and practices related to the human right to water and
sanitation.
• Disclosure: Encouraging meaningful, harmonized water-related
reporting, while reducing corporate reporting burden.
• Collective Action: Facilitating cross-sectoral partnerships between
businesses and others that address shared risk and drive more
sustainable water management.

5. Water-related Risk in the Value Chain
Source: Treating Water, April 2, 2009, Robeco in collaboration with WRI

7. How Do Water Challenges Affect Businesses
• Operational crises resulting from inadequate water availability or
management capacity
• Damaged social and legal license to operate in a specific location
• Diminished brand value due to irresponsible or unsustainable
behavior
• Increased operational costs spent complying with relevant
regulations, or for more expensive water and/or wastewater
treatment
• Lower investor confidence due to unstable or uncertain water
availability and related management plans

8. Water Risk: Drivers and Influence
Company
- Water use efficiency
- Wastewater treatment
- Compliance
- Impacts on communities and ecosystems
Basin / Watershed
- Water stress
- Water pollution
- Inadequate infrastructure
- Lack of government capacity
- Climate change
- Lack of community access to
safe drinking water
Often, the greatest risks come from conditions
over which the company has the least influence

9. Shared Risk
Business risk Community risk
• Disruptions to water • No access to safe
supply for production drinking water
• High cost of pre- • Not enough water to
treatment maintain livelihoods
• Perceived as • Susceptible to extreme
contributing to weather events
watershed challenges Unsustainable • Reduced ecosystem
• New regulations / water services
requirements conditions
Civil society risk
Government risk • Reduced biodiversity /
• Not enough water to damaged habitat
fuel economy • Depletion of natural
• Basic human needs resources
not met • Sustained poverty

10. What is policy engagement?
Corporate water management initiatives that
involve interaction with government entities,
local communities, and/or civil society
organizations with the goal of advancing:
1. Responsible internal company
management of water resources within
direct operations and supply chains in line
with policy imperatives,
2. The sustainable and equitable management
of the catchment in which companies and
their suppliers operate.

11. Business Case: Internal versus External Action

12. Example: Intel treats municipal wastewater in Arizona
Intel teamed up with the City of Chandler to devise a collaborative approach
to water management that includes building an advanced reverse osmosis
facility to treat clean rinse-water from Intel’s manufacturing facility to
drinking water standards before being returned to the municipal
groundwater source.
Intel established an agreement with the
local water authority to reclaim millions
of gallons of processed wastewater for:
• the company’s cooling towers
• air abatement equipment
• onsite landscaping, and
• irrigation for nearby farmland

13. Collective Action
Shared risk creates a strong risk for collective action among companies
and others to advance sustainable water management
Benefits
• Mitigates business risks in robust manner
• Leverages collective strengths , resulting in more
informed, better designed, and more durable
outcomes
• Builds legitimacy with stakeholders
Risks & Challenges
• Exposes a company to a complex landscape of
needs, interests, personalities, and organizational
structures
• Requires development of new skills, a nuanced
view of the company’s productivity
framework, and enhanced capabilities to
collaborate

14. Collective Action Preparation and Implementation
ELEMENT 1: ELEMENT 2:
Articulating Water- Characterizing the
Related Challenges and Interested Party
Action Areas Landscape
(Section 4.1) (Section 4.2)
ELEMENT 3:
Selecting a Collective Action Level of Engagement
(Section 4.3)
ELEMENT 4:
Preparing for Collective Action
(Section 4.4)
ELEMENT 5:
Implementation, Refinement, and Evolution
(Section 5)

15. Characterizing Water-Related Challenges, Causes, and Risks
Drivers of Water Water-Related Company
Water Resource Management Challenges Interests
State System
Infrastructure Water Over-
Economic Management Allocation Physical Risk
Development and Funding
Changes to Insufficient Water Direct
quality, response to Supply/Sanitation operational
quantity, or water Unreliable/ impacts or
Water
Demographic availability; management Unavailable concerned
Governance and Regulatory Risk
Shifts alterations to pressures community
Regulation
goals or and actors or
Water Quality
objectives requirements customers
Deterioration
Water Planning,
Climate Reputational
Management,
Variability Flood Damage Risk
and Pricing
Ecosystem
Social Norms Stewardship
Degradation
and Opportunity
Expectations

16. Potential Collective Action Areas
from the Water Action Hub
• Efficient Water Use • Climate Change Adaptation and
• Effluent Management, Wastewater Resilience
Reclamation, Reuse • Ecosystem, Source Water
• Community-Level Access to Safe Protection, Restoration
Water, Sanitation, and Hygiene • Monitoring and Knowledge Sharing
• Storm Water Management and • Engaging in Participatory Platforms
Flood Control • Public Awareness and Education
• Infrastructure Finance, • Improved Water Governance, Policy
Development, Operation, or Development, and Implementation
Maintenance
• Sustainable Agriculture

17. Connecting Actions to Underlying Causes
Water Water Water
Flood Ecosystem
Over- Supply Quality
Damage Degradation
Allocation Unreliable Deterioration
Effluent
Efficient Water Use
Management/
Wastewater
Inadequate Reclamation/Reuse
Infrastructure Community Level Access to Safe
Storm Water Management and
System Water, Sanitation, and Hygiene
Flood Control
(WASH)
Infrastructure Finance, Development, Operation, or Maintenance
Sustainable Agriculture
Ineffective
Climate Change Adaptation and Resilience
Water
Management Ecosystem/Source Water Protection/Restoration
Monitoring and Knowledge Sharing
Engaging in Participatory Platforms
Poor
Catchment Public Awareness and Education
Governance
Improved Water Governance and Policy Development

18. Jason Morrison
Pacific Institute
www.pacinst.org
jmorrison@pacinst.org
Learn more about the CEO Water Mandate and sign up for our mailing list at:
www.ceowatermandate.org