2017 World Water Week: Key Takeaways

By Dawn McGregor 18 September, 2017

Circularity & textiles were focus areas this year with finance & business tabled. CWR's McGregor expands

This is the fourth consecutive year China Water Risk has taken part in World Water Week in Stockholm. As with previous years the conference was very well attended with over 3,000 participants from more than 120 countries. This year the theme was “Water and Waste: Reduce and Reuse”. There was a new addition to the conference this year, a day focused on the textile industry. Accordingly, our takeaways from this year will cover both water and textiles.

China Water Risk co-convened/was a panellist at two seminars and did a SIWI Sofa:

• Clean and Circular: The Future of Made In China Fashion: This seminar was convened by China Water Risk and the C&A Foundation. It included presentations from the China National Textile & Apparel Council, the Institute of Public & Environmental Affairs and the Alliance for Water Stewardship. Additionally, we launched our latest textile report at the event, “Insights From China’s Textile Manufacturers: Gaps to overcome for clean & circular fashion”. The seminar showcased Chinese action and best practice for management of wastewater, chemicals, raw materials and waste in the textile industry. Water stewardship innovations, as well as business risks and opportunities in water and fashion were also discussed (see more details here);
• Water, pollution, and systemic challenges: the case of the textile-industry: China Water Risk was a panellist in this seminar. The session focused on global business models and systemic changes to achieve the SDGs (see more details here); and
• Transforming the textile sector towards a sustainable future: China Water Risk was a panellist in this SIWI Sofa (see the full sofa video here).

This year, business & finance were touched on in nearly all of the events we attended

Before we share our water and textile takeaways, there is one takeaway that spans both so we start with that. Last year we noted that there had been the most discussion around business and finance of the years we have attended. This year, business and finance were touched on in nearly all of the events we attended.

Indeed, it’s clear that business and finance are finally starting to be tabled as we work towards achieving SDG 6 and securing water for tomorrow.
Below are our three key takeaways on the water front:

1. Circularity: a big focus with a full-day seminar

This year there was no full day seminar on business and water but there was one focused on the circular economy, “Water in the circular economy: opportunities and challenges”. The seminar covered an introduction to the circular economy and water’s role within integrated wastewater treatment and circular technology innovation for already existing business and country examples. This circularity focus also dominated in the textile industry day seminar, more on this in our textile takeaways.

“the linear economy is taking us down a dead-end path”

Circular economy seminar

As said in the seminar “the linear economy is taking us down a dead-end path”, so it is encouraging to see such a prominent focus on the circular economy. Resource recovery, new ways of doing old things and designer water, all talked about at the conference, are going to help us achieve sustainable development.
    

2. While finance & business have started to be at the table, much more is still needed

While we note that finance and business are finally starting to be at the table, there is still much work to be done.
For finance, while widely talked about at the conference there were few answers to investors’ questions on investment opportunities/cases in water that are ready to be invested in now. This is an area that needs much more attention and action. While noted that the investors at the conference, still a select few, are those ahead of the mainstream on environment-related investments they need more from the water sector to move ahead. If the leaders can’t make water investments, how are mainstream investors meant to move on this?

Fundamental questions around corporate stewardship remain unanswered…

As for business, several corporates shared their water strategies and stewardship plans of which many were impressive and ambitious. However, the Q&A session brought some fundamental and unanswered questions to the surface, such as: why open a factory in a water-scarce province in China and the cost versus benefits of water stewardship. Additionally, it was pointed out that corporates are broadly approaching water in a linear fashion: identify risks, evaluate, manage and mitigate. While this is still positive, those at the conference were advocating a more circular approach. This included corporates sharing more and working more with others.

…meanwhile, a more circular stewardship approach was advocated & CBWTs questionned

Increased engagement between corporates is part of Context-Based Water Targets (CBWT) (read more on them in an article for CWR by the Pacific Institute here), for which the methodology is being developed. The main differentiating factor between them and other water targets is that they look beyond the individual corporate/organisation and consider basin implications and requirements. Interestingly, in a session led by the CEO Water Mandate at the conference, contrasting corporate views on CBWTs were apparent. One side advocated caution of setting a methodology for corporate water targets without fully understanding the implications of CBWTs and their impact, emphasising that “we need to get this right”.  Other comments on CBWTs included that they should supported by science rather than driven by it and should be more a bottom-up approach than top-down.

3. What works for climate can’t & shouldn’t be applied to water

The statistics on water scarcity, quality and related challenges were plentiful at the conference, as they have been for years. As was said in the opening plenary, “the world is running out of water, well not literally but the amount available to humans with an increasing population”. Moreover, water has been a top global risk for more than five years running in the World Economic Forum’s report. Yet, as pointed out at the conference, focus and action on water is less than that on climate. Compounding the issue is that the horizon for impacts from water issues are shorter than that of climate.

“A climate approach & applying it to water doesn’t work for me”

CEO Water Mandate Context-Based Water Targets session

This raised questions and dialogue on the approach to tackling water challenges. These concluded unanimously that the approach for water needs to be different than that to climate; carbon and water are two very different resources. Some comments around this include: “A climate approach and applying it to water doesn’t work for me” and “Water is not carbon – can’t offset it”.

Now for textiles. Below are our three takeaways on the textiles front:

1. Circular, circularity & circular economy 

The ultimate focus of the full day textile seminar was achieving a circular apparel economy. CWR’s event also focused on this.

What a circular economy is exactly and how to achieve it, those answers remain largely unanswered but whether it was brand’s targets, growing investor interest in environmental exposure or new wastewater guidelines, everyone is working to find the answers. And encouragingly, by the end of the seminar the entire audience was positive that we can solve the textile challenges we face. They weren’t so positive at the beginning of the day.

The two most discussed obstacles to a circular apparel economy were: 1) higher prices & 2) governance

The two most discussed obstacles to a circular apparel economy were: 1) higher prices and 2) governance. Higher prices and if brands are ready to pay these for cleaner & circular fashion is not new to anyone but its consistent discussion shows what a major and difficult issue it is. Unfortunately, no big new ideas or break-throughs came up. However, there was interesting discussion around the responsibility and enforcement of governance by brands rather than by the government of the countries they are operating in. And that brand governance is what is levelling playing fields for manufacturers.

2. Fashion industry is in a good position for change but Europe/US vs Asia gap stills needs to be addressed

It was clear from the day seminar that the fashion industry is in a good position for change to cleaner and circular ways with lots of action from NGOs to brands to industry associations. Not only do all these industry actors know each other but their work is increasingly leveraging off each other and more organisations are joining in. While this is encouraging and the direction the industry is heading is positive the gap between Europe/US and Asia needs to be addressed. Especially as raw material production and manufacturing is increasingly relocating to Africa.

Many of the leading sustainable fashion brands are global brands with headquarters in Europe or the US or are smaller European or American brands. While their moves towards cleaner and circular fashion are positive they still do not fully take into account the vast difference in resource consumption levels, consumer preference and price points between Europe/US and Asia. The business model and solutions for Europe and the US are not necessarily applicable to Asia and Asian brands. Thus, while best practice is important, it is also important for leading brands to consider their impacts across the full value chain – especially where they are sourcing their raw materials from.

A quick side note: China Water Risk is developing a dashboard that can help you look at water risks at a glance, across all your assets. For a short overview on how this works and the risks it identifies, see our article here.

3. Lots being done but what about local production?

Essentially 99% of the seminars and discussions around textiles at the conference were directly or indirectly on the textile production for global fashion brands. But what about domestic production? There are huge corporates and hundreds of SMEs in Europe, the US and Asia that only produce for their respective domestic markets. Are these brands working towards ZDHC? Do they do factory audits? And if so, do they use the Higg Index? There is such little known about these companies, with limited if any transparency or benchmarking indexes covering these brands. This question about domestic production can’t be side-lined, the impacts from it are too large. Plus, for the fashion industry to truly transition to a clean and circular model it needs the entire industry to do so, not just the leaders and big names.

“Bad decisions today will leave impacts for generations… we can’t afford to just repeat bad decisions”

Mayor of Stockholm, Opening Plenary 2017

The week flew by and as you can see from our takeaways above there were plenty of interesting conversations and ideas, though these only cover what we took part in. Overall it felt like a more realistic and deliverables focused conference and while, like always, significant challenges remain, many at the conference are positive that we can overcome them with the tools that we already have. I don’t want to end by dampening this optimism but I do want to share the words spoken by the Stockholm Mayor at the opening plenary that remind us how important it is to make the right decisions – which is not easy as we learn more about impacts along the entire value chain and life-cycle assessments; “Bad decisions today will leave impacts for generations… we can’t afford to just repeat bad decisions”.

The theme for the 2018 World Water Week (26 August – 31 August, 2018) is “Water, ecosystems and human development”.  There may also be a full day textiles seminar so stay tuned!

Further Reading

• At A Glance: Water Risk Dashboard – Need to gauge water risks across your operations, suppliers or investees at a glance? China Water Risk’s Hubert Thieriot expands on a new dashboard for exactly that – check it out!
• Toxic Phones: China Controls the Core – We review CLSA U®’s report which warns that transitional risks are abound as China says no to pollution and yes to a high tech future. What are the top-5 ‘bewares’? China Water Risk’s Debra Tan expands
• Electronic Brands: Sustainable Or Not? – The new CLSA U® report cautions that current brand strategies only focus on short-term profits despite looming risks. Is this sustainable? China Water Risk’s Woody Chan looks at what leaders like Apple & Samsung are doing across greening supply chains, recycling and more
• Apple & Rare Earth Recycling – Although Apple is leading smartphone giants in green commitments, its transparency and traceability of rare earth supply can be improved. Plus, what lies ahead for rare earth recycling? Researcher Hongqiao Liu expands
• GPC: Smart Subsidies For Renewables – China’s current subsidy system for renewable energy is overburdened. However, China Water Risk’s Yuanchao Xu sees positive change ahead with the recent initiation of Green Power Certificate trading

World Water Week & China Water Risk

• 2016 World Water Week: Key Takeaways – Business, risk assessment & linkages with SDG 6 were key issues at World Water Week 2016, fitting given the theme “Water for Sustainable Growth”. China Water Risk’s Dawn McGregor on our three key takeaways from Stockholm
• 2015 World Water Week: Key Takeaways – What’s water’s role in sustainable development? How can we ensure water for all? China Water Risk’s McGregor on this, how Asia is fairing, the Sustainable Development Goals & more from World Water Week 2015
• 2015 GLASA Awards: Key Takeaways – The Global Leadership Award in Sustainable Apparel (GLASA) was launched to inspire bold & courageous sustainability leadership in the apparel sector. China Water Risk was a finalist this year, for which the theme was water. CWR’s McGregor & Hu share their takeaways
• 2014 World Water Week: Takeaways –  Check our key takeaways on ‘Water & Energy’ from World Water Week 2014. What are the challenges ahead for Asia & the rest of the world? Dawn McGregor expands