Creating Water Abundance From Scarcity

By William Sarni 17 November, 2017

Water Foundry's Sarni on going past water stewardship strategies to address water scarcity & quality issues

Over the past several years my thinking has changed from believing that water stewardship strategies would be able address water scarcity and quality issues to a mindset that this strategy is no longer enough. This is not to suggest that these strategies don’t create value. Instead, we also need new approaches to address the “wicked problem” of water.
Involvement with several initiatives shaped my thinking.
I have come to appreciate that there are initiatives that can accelerate our progress in solving water challenges. They include, XPRIZE, 101010 and ImagineH2O. These programmes and accelerators made me realise that there are entrepreneurs actively developing not just new water technologies but new business models that, if scaled, will solve water scarcity and quality challenges – creating abundance.
An abundance strategy for water is the thesis for my forthcoming book with David Grant of ABInBev – “Water Stewardship and Business Value: Creating Abundance from Scarcity” (Sarni, W., and Grant, D., Routledge 2018).

There is an opportunity for companies to create greater value & impact beyond the framework of water stewardship

What we present in our forthcoming book is the opportunity for companies to create greater value and impact beyond the framework of water stewardship. We propose that companies can play a more active role in creating water abundance through innovation. Not just technology innovation but also innovation in financing/funding, business models and partnerships. We believe that innovation will take us from 19^th– and 20^th-century public policy and infrastructure to 21^st-century solutions through: exponential technologies (i.e., material science, internet of things, etc.), prize competitions and entrepreneurial programmes (e.g., XPRIZE, ImagineH2O, 101010), innovative business models (e.g., water as a service) and financing (e.g., green bonds and socially-responsible investing) and new stakeholder ecosystems (e.g., Replenish Africa Initiative).
Imagine if companies invested in activities going beyond their value chain footprint (supply chain, operations and product use)? What if companies invested their own funds in water technology, partnered in public infrastructure investments, funded prize competitions targeting technology and public policy innovation? What if they leveraged their global reach and skills in marketing and communications to increase education and awareness of water risks and solutions to address these risks?
An overview is provided below of several innovative competitions, entrepreneurial programmes, technologies, finance strategies and business models to get us to water abundance.

1. Innovation competitions and programmes

Many people are familiar with XPRIZE – XPRIZES are monetary rewards to incentivise three primary goals:

• Attract investment from outside the sector that takes new approaches to difficult problems.
• Create significant results that are real and meaningful. Competitions have measurable goals, and are created to promote adoption of the innovation.
• Cross national and disciplinary boundaries to encourage teams around the world to invest the intellectual and financial capital required to solve difficult challenges.”

I had the privilege in 2016 of working on an XPRIZE for water with an exceptional team with the goal of crafting an XPRIZE for Water. Our vision – universal access to safe drinking water, always  – was presented in late September at the XPRIZE Visioneers Summit, sponsored by the Roddenberry Foundation.

Bringing in outsiders to develop businesses to tackle water has enormous promise

Another unique organisation founded to drive innovative solutions to “wicked problems” is 101010. 101010 was founded by Tom Higley, a Denver, Colorado based entrepreneur. His programme brings together 10 entrepreneurs, for 10 days to address 10 “wicked problems.” The programme links successful entrepreneurs with challenging (wicked) problems such as healthcare and cities, with the intent of solving them. In October 2017, they ran 101010 Cities – Infrastructure and Water. Based upon my involvement with 101010, the process of bringing in outsiders to develop businesses to tackle wicked problems, such as water, has enormous promise.

2. Technology 

Innovation in water technology innovation has been a long-standing trend. There have been ebbs and flows in interest and investment in the “water tech” sector over the years. Angel investors, VC’s and private equity funds are chasing innovative water tech companies around the world.
The trends in technology innovation include the following categories:

• Digital Water
  • Inexpensive sensors
  • Internet of Things (IoT)
  • Big data
  • Artificial intelligence
  • Water trading platforms

• One Water/Circular Economy
  • Efficiency
  • Reuse
  • Recycling

• Decentralized/Off Grid
  • Air moisture capture
  • Point of Use/Point of Extraction

• Exponential technologies
  • Material science such as nano-technology and biomimicry

There is a significant trend in innovation & adoption of digital water technology solutions

In particular, there is a significant trend in innovation and adoption of digital water technology solutions. Platforms, hubs and accelerators focused on digital applications are being established. From GE’s focus on the Industrial Internet and water data technology hubs such as WetDATA based in Denver, Colorado. Prize competitions are also focusing on digital technology startups – ImagineH2O’s 2016 prize competition supported the launch of several digital solutions in infrastructure, agriculture and water quality monitoring.

3. Financial and funding models

Would companies make investments in water sector technology and infrastructure? Research by Alex Money, PhD, Oxford University, UK, indicates that there is an emerging interest in investment by multinationals for these investments.

The private sector can leverage its large pools of capital for public sector investment…

…part of this model includes green bonds

The private sector can leverage its large pools of capital for public sector investment. His research is based on interviews with CEO’s at food and beverage multinational companies; with Chief Investment Officers at fund management firms in the UK, USA, South Africa and Australia; with senior bankers including the CFO of the World Bank; government representatives including UK Treasury; insurance company representatives; non-governmental bodies; corporate sustainability specialists; and various academics.
Part of this model includes green bonds. Growth in green bonds is increasing, in part, due to the work for the UK-based Climate Bonds Initiative, which is “an international, investor-focused not-for-profit. It’s the only organisation in the world focusing on mobilising the USD100 trillion bond market for climate change solutions.” It established a water infrastructure working group to develop criteria for water investments that can be used to back green and climate bonds certified under the Climate Bond Standard. The group is charged with developing criteria for water-related investments in the areas of “clean water projects, water treatment infrastructure, agricultural usage, storm and flood drainage and protection.”

4. Business models

There are signs that innovative business models are also finding their way into the water sector. A couple of examples are provided below:

There are signs that innovative business models are also finding their way into the water sector

Banyan Water was founded in 2011 and “provides smart water management as a service for commercial and institutional businesses using real-time technologies and related services to save money and enhance properties. Banyan Water believes that better water management is not just a key source of profit for clients, but a requirement in meeting the needs of our growing population. The company helps businesses find and maintain water savings opportunities throughout their portfolios.”
Another company is FATHOM which is a SaaS, “cloud-based data integration platform that is changing the water utility paradigm.” Its geospatial platform goes beyond the meter to encompass the needs of water utilities – a “smart gird for water,” with three “rapidly deployable modules: FATHOM MDM, FATHOM U₂You and FATHOM CIS.” According to FATHOM, the company delivers “benefits of technology while eliminating the risk so often associated with IT‐driven projects. Through FATHOM, utilities can build sustainable, data‐driven, customer‐centric enterprises while managing the realities of water volatility and the increasing expectations of customers.”

What does “business unusual” mean?

We can no longer afford business as usual and need to embrace business as “unusual.” For me this means the following:

• Shifting our thinking from water scarcity to abundance to attract new ideas and stakeholders to solve complex (wicked) water challenges.
• Scaling innovation and entrepreneurial programmes such as 101010 and prize competitions such as those of XPRIZE and ImagineH2O.
• Developing and implementing new financing models such as blended finance.
• Leverage the speed and scale of entrepreneurs and multinationals to invest in water solutions in addition to their water stewardship programmes.
• Proactively engage with successful entrepreneurs and businesses from outside the water sector.

Further Reading

• Brand Rankings On China Supply Chain Action – Kate Logan & Helen Ding from the Institute of Public & Environmental Affairs expand on the 4th Annual CITI Evaluation Results. Which sectors are doing best? Which brands are taking the lead?
• Can China Clean Up Its Act? – China faces unprecedented air, water & soil pollution after decades of growth. With its contaminated land area bigger than the United Kingdom, Asit K Biswas & Cecilia Tortajada look at what China’s policymakers are doing to change this
• Learning From Singapore’s Circular Water Economy – Hong Kong is facing an imminent water crisis yet Singapore’s novel circular water economy approach may offer solutions from which HK can learn. Utrecht University’s Julian Kirchherr & Circular Economy Academy’s Ralf van Santen explore
• What ‘Xi’s Thought’ Means For Water – One key message from Xi Jinping at the 19th National Congress was harmony between environment & economic growth, surely this bodes well for water? China Water Risk’s Feng Hu reviews
• Green Development For A Beautiful China – The Minister of Environmental Protection Ganjie Li outlined the MEP’s achievements and future plans at the 19th People’s Congress. What are the key takeaways? China Water Risk’s Yuanchao Xu reviews

• Innovating Water Stewardship Through Business Ecosystems – William Sarni, water stewardship expert, on the need for innovation in water strategies in order to better position for 21st Century water risks. Sarni points to “business ecosystems” as the driver for this innovation and value creation
• Water: Can’t Always Buy What You Need – With competition for water intensifying, paying more for water may not get you what you need. Deloitte Consulting’s Will Sarni on strategies that can help corporates secure water for growth
• Bridging Gaps to Water Innovation – Water scarcity & pollution will drive innovation in partnerships and technology but the road to commercialisation remains long. Will Sarni, Partner at Deloittes discusses the barriers to innovation in the water sector
• Water Stewardship: The Impact To Date – A new report finds there has been little evolution from business -as-usual in regards to water management. What behaviours need to change? How can this be achieved? We sat down with report authors James Dalton from the International Union for Conservation of Nature (IUCN) & Peter Newborne from the Overseas Development Institute (ODI)
• Developing A Global Water Stewardship System – Alliance for Water Stewardship’s Zhenzhen Xu, Ma Xi & Michael Spencer introduce the first ever global water stewardship standard and share lessons learnt from Ecolab’s pilot at their Taicang China chemical plant
• Why Should PRD Business Lead In Water Stewardship? – With the Pearl River Delta set to lead China’s economic growth, China Water Risk’s Feng Hu & the Alliance for Water Stewardship’s Zhenzhen Xu explain why business should adopt water stewardship to ensure continued prosperity
• Corporate Water Targets: A New Approach – More and more companies view water as a business risk and water stewardship as a solution but current water stewardship metrics for on-ground projects are inadequate. Tien Shiao from the Pacific Institute shares a new approach on setting corporate water targets