Professor John Briscoe was Senior Water Advisor and Brazil Country Director for the World Bank. He is now the Gordon McKay Professor of the Practice of Environmental Engineering at Harvard University.
Water insecurity looms as one of the great challenges of the 21st century, and it is one that policy makers and business leaders must face together.
JOHN BRISCOE: Professor John Briscoe was Senior Water Advisor and Brazil Country Director for the World Bank. He is now the Gordon McKay Professor of the Practice of Environmental Engineering at Harvard University.
Public sector leaders and non-governmental organisations have long dominated the debate on water policy. However, over the last decade, a growing number of private sector companies (with Nestlé playing a leading role) have also started to engage, on two tracks.
Track One is being defined by companies that are developing technologies, which can enable society to get more product – more food, energy, income, employment – per drop of water. There are three broad segments. The first comprises companies that develop productivity-enhancing seeds and agricultural technologies. A second segment of companies is developing new technologies for treating water and wastewater. The third segment comprises companies that provide users with just-in-time and just-what’s-needed information, such as on the probability of rainfall, on soil moisture, on water and on fertilizer requirements. Precision agriculture can produce much more crop per drop than traditional methods can, and industries and cities can use much less water too.
Track Two is motivated by the understanding that growing concerns regarding water scarcity and quality can become a threat to a company’s social licence to operate. Companies have responded in several ways. Some have made large donations to activist groups in the hopes of buying peace; others have focused on the water standards that they can then meet in their plants. The most far-sighted of these companies, however – with Nestlé a leading example among them – recognise that while companies have to manage water and other resources efficiently behind their factory gate, society (along with companies and their suppliers) needs an equitable, efficiency-stimulating, and predictable legal and regulatory environment that governs all water uses in a watershed. These companies also believe that private businesses have useful and legitimate inputs to make into the policy formulation process.
I have seen, first-hand, two examples where companies are engaging on this big stage.
The first example was in Brazil, where improving the quality of public sector performance is, arguably, the biggest systemic challenge facing the country. Eight years ago, a newly elected Governor of one of the largest states realised this but did not have the people or tools to address the problem. The Governor approached executives from two of Brazil’s most successful high-morale companies (InBev and Gerdau). Together, they laid down two basic ground rules: that they would assist only if the effort were led by the Governor, and there would be very careful avoidance of even the hint of a conflict of interest. The companies then provided human and financial resources, which the state used to execute a hugely successful "management shock", a process that is now being emulated in a dozen other Brazilian states.
The second example is in Pakistan, where the Chief Minister of the largest province is pulling together public and private expertise to address the existential challenges of water productivity and water security. The private effort has been led by the local private sector, with multinationals – led by Nestlé – playing a strong supporting role.
Nestlé engages for three reasons. First, its corporate philosophy of Creating Shared Value plays a major role, because Nestlé in Lahore is not just the milk factory, but includes the 190 000 farmers who provide milk to the factory. These farmers tell Nestlé that water is a major challenge – not only for their cattle, but for their crops and their families.
Second, Pakistan is an important and profitable market for Nestlé and the Company realises that its corporate well-being is dependent on a more prosperous and secure country.
And third, while Nestlé is, of course, a multinational, in any place (like Pakistan) it is at least as much local as international. One of Pakistan’s most far-sighted business leaders is a major shareholder, and Nestlé’s staff is almost exclusively Pakistani. And every Pakistani knows just how vulnerable his or her country is when it comes to water. And so Nestlé – like InBev and Gerdau in Brazil – is putting its management know-how at the service of reforming political leaders, and encouraging other domestic and international companies to do the same.
Dealing with the growing and changing threat of water insecurity is one of mankind’s great, existential challenges. The glass is certainly half empty. But it is also half full, as political leaders increasingly engage with the fundamentals of reform, and as business leaders understand that this is an issue where they can, in partnership with progressive political leaders, make a big, systemic difference.
The comments on this page are the author’s independent opinions and are not necessarily shared by Nestlé.