Image: Dhaka, Bangladesh
Creating Business Value through Improved WASH
Businesses need to do more to understand the impact of poor water, sanitation and hygiene (WASH) in their own supply chains, as well as the impact that their water and sanitation usage has on the cities and towns in which they operate and on the sometimes water-scarce regions in which they are located.
These were two key insights that I took from discussions with the private sector at World Water Week in Stockholm.
Last year WSUP and Business Fights Poverty published a Discussion Paper on creating business value and development impact in the WASH sector. Having observed the potential of the sector as a source of business value and social impact that reaches across industries, we commissioned a study to better understand and document the diverse ways in which multinational companies were engaging with the sector and placing WASH at the heart of their strategic business operations agenda.
One year on, World Water Week in Stockholm offered a chance to take stock of progress in this area at the CEO Water Mandate Multi-Stakeholder Working Conference. The event saw the launch of WASH4Work’s draft white paper, written by WSUP in collaboration with other companies and organizations, which outlines the business case for investing in WASH services.
I presented the business case to a diverse business audience; the ensuing conversation and stimulating debate was a testament to the interest of business to understand better the impact of WASH on their operations, and the desire to respond appropriately and effectively to global issue that is rising in profile and importance.
The paper, once finalised and published, will be an important tool for the business community; it will help them manage the demands placed on them, most notably those located in emerging market cities, with limited WASH services and an ever-expanding population. The WASH4Work initiative aims to mobilise greater business action to address WASH challenges in the workplace, in communities where workers live, and across supply chains.
For WASH4Work to succeed, the business case for investing in WASH must be clear, simple, and framed in language the business community understands. The basic argument is that access to WASH has an economic, social and environmental impact that can ultimately benefit a company’s bottom line.
So how is investing in WASH good for business? The draft white paper sets out four main channels:
Increasing productivity and reducing absenteeism: access to WASH in the workplace contributes to a more capable workforce, a drop in factory error rates, reduced attrition rates and associated hiring costs, and improved employee engagement.
Reducing operational costs and risks: businesses can reduce costs, gain efficiencies and mitigate risks in their operations through channels including reduced water treatment costs, and a more resilient supply chain grounded in lower absenteeism and improved productivity.
Strengthening social license to operate and addressing reputational risk: Corporate water stewardship including WASH enables companies to understand and mitigate the impact they have on water resources, particularly in water-stressed areas. Good water management strengthens relationships with governments and other key influencers, while supporting consumer access to WASH helps safeguard corporate reputation and enhance brand image.
Helping grow the business: by responding to unmet needs, and in some cases untapped markets for water, sanitation and hygiene products and services, companies have an opportunity to grow their business.
These arguments are not speculative. They are supported by numerous research studies—in areas including the impacts of improved WASH access on workforce productivity and company profitability—and by company surveys. The 2015 CDP water questionnaire found 65% believed they were exposed to water risks that could generate a substantive change in their business, operations, revenue and expenditures.
Most importantly, the case is supported by real examples of what companies like Levi Strauss, SABMiller, Unilever and Marks & Spencer are already doing. These examples will be critical to building momentum. We were encouraged by the feedback on the draft white paper from Stockholm participants, who recognised the arguments that WASH4Work is putting forward.
In some cases, they were impressively frank about the need for WASH to be provided across all business and employment locations, but also recognised the mountain that some business have to climb to address the reality of improving WASH services across their supply chains.
All of our WASH4Work partners bring fresh perspectives and unique experience to the initiative. At WSUP, we are focused on developing a functional sector that can underpin WASH service provision in the emerging market cities where we work. That means strong local institutions and a functioning regulatory framework. As the Stockholm session concluded, I was reminded of the potential impact and transformative power of enhanced corporate engagement in WASH in growing cities in Africa and Asia.
When companies understand how the WASH services in their factories, business premises and supply chain —the water they consume and the waste they produce—are connected to a wider system that exists across their city, they understand better that they have a stake in the functioning of the city, water utilities and municipalities.
They are part of a system that requires local institutional capabilities to deliver services that meet the needs of their company and their workforce.
That is a powerful force for change. One step at a time – starting with the white paper.