As companies and world leaders gathered in Glasgow, Scotland, for COP26, we saw the renewed urgency for global companies to identify new business models that will help address our world's climate challenges.
According to the World Resources Institute (WRI), if nothing changes, the world will experience a 56% freshwater shortfall by 2030, an increase from the 40% shortfall projected by the UN in 2015. Companies face increasing pressure to reduce carbon emissions and make progress on water reduction targets. At the same time, rising industrial water use continues to contribute to the world’s growing water stress and scarcity challenges.
Beyond external pressure from investors and consumers, our world’s water challenges pose significant operational threats to industry. Companies face several risks associated with water stress, outlined in the recent IPCC report on climate. Some of these risks could be financial. According to data from 357 companies surveyed in CDP’s Global Water Report 2020, the total potential financial impact of reported water risks in 2020 was up to $301 billion. Other risks could be physical, such as disrupted supply chain operations or stranded assets, or reputational, like when companies are criticized for taking more than their fair share of water within a water-stressed community.
In the face of these challenges, companies will need to prioritize changes to help them adopt environmentally friendly operations that reduce reliance on natural resources, but they will need to balance making progress in these areas while still achieving their unique business and financial goals.
Digital solutions to help industrial water users
Digital solutions will be required tools to help industrial water users adopt proactive water management solutions that deliver operational, environmental and economic benefits.
Proactive water management practices offer opportunities to unlock these benefits, but water treatment systems are dynamic and complex. Companies may not track water performance and progress because manual data collection and analysis is often tedious, resource-intensive and difficult to execute consistently across multiple locations. This is where digital solutions can change the game.
The need for digital technology is built on the premise that you cannot improve what you do not understand. Investing in digital solutions helps industrial operations get a true sense of how water is being used and helps identify existing opportunities and gaps through the following practices:
Turning data into insights: Delivering outsized gains in industrial operations
Organizations with multiple locations often have one-size-fits-all water reduction targets across their enterprise. Because sites operate within unique watersheds and weather conditions and may manufacture products that use differing amounts of water, this could lead to targets that are too high for some locations and too low for others. Unlike greenhouse gas emissions targets, which can be set at the global enterprise level, water use needs to be solved within the context of a local watershed.
Digital solutions, like Ecolab’s Water Flow Intelligence built on the ECOLAB3D platform, allow users to efficiently pinpoint where water is being consumed across connected assets and processes within their facilities. By utilizing these types of advanced analytics, organizations can set enterprise-wide benchmarks and strategically target improvement efforts locally to help maximize water savings.
Nalco Water recently partnered with one of the world’s largest automakers who sought to reduce its water use per vehicle as part of a long-term goal to improve sustainability within its manufacturing processes. The Nalco Water team provided the customer with solutions for real-time flow monitoring to better manage water balance. By leveraging continuous visibility to optimize assets and identify water savings opportunities, the customer achieved a 15% reduction in water usage per vehicle, resulting in savings of 25 million gallons of water and more than $190,000 per year.
Predicting failures before they occur to support near-term bottom-line value
Forecasting critical issues and predicting water quality and availability risks can help facilities preemptively address problems and ultimately avoid downtime. Real-time alerts and forward-looking insights can help protect facilities against operational disruption due to water quality and quantity risks. Digital solutions are a key support tool, especially those that leverage predictive analytics to offer real-time monitoring, advanced alarm notifications and 24/7 oversight. These tools work in tandem to help diagnose issues or variable conditions, enabling faster response to leaks and other issues.
In another example, Nalco Water used a predictive digital solution to help a chemical processor produce a specific chemical to make PVC-based products. The solution helped the customer identify and analyze valuable information about their efficiency within their cooling water system and ultimately delivered approximately $2.7 million in annual savings.
Enabling remote access to troubleshoot operational issues in real time
Augmented reality solutions help break down geographical barriers. Throughout the COVID-19 pandemic, Ecolab leveraged augmented reality capabilities to enable remote access to plants to both install its products and troubleshoot critical operations. Our teams have used this type of solution to remotely identify leaks, mechanical failures or water quality issues. Further, augmented reality technology has allowed Ecolab to respond rapidly to customers in remote locations, where on-site support might take several days to arrive. This type of technology allows Ecolab to provide immediate service and consultation to customers anywhere in the world.
Building operational resilience in real time
Digital solutions enable a shift in business model from reactive to proactive. As organizations increase their ability to monitor and measure performance, they can apply data-driven learnings to drive exponential results over time. Cloud-based platforms help businesses gain greater visibility, track performance trends and avoid inefficiencies that can lead to waste. By identifying opportunities and implementing changes based on these insights, companies can build more resilient operations that are equipped to keep pace with rapidly evolving customer needs and climate realities.
It has never been more important for organizations to take control of their water use. Yet, according to an Ecolab and GreenBiz February 2021 survey of 93 companies with revenues of at least $1 billion, only 38% of respondents stated that water is a strategic corporate initiative that is proactively managed across their operations. In this same survey, only 54% of respondents currently utilized advanced measurement tools to track progress.
By investing in digital solutions, organizations can dramatically increase the efficiency of their water management programs. Proactive water management strategies return numerous benefits to the organization. Digital insights help reduce overall water use, which in turn, lowers costs and energy use and helps advance carbon reduction goals through reduced emissions. Digital solutions also help companies build their resilience through operations that require less water and energy. This increased resilience will be critical as we adapt to a resource-constrained world and a changing climate, supporting responsible business growth and a sustainable future for all.
Mike Cerilli is the vice president of digital growth for the Industrial Group at Ecolab, leading digital strategy, digital experience and commercial business impact. In his role, he oversees strategic initiatives to drive growth, digital innovation and technology deployment. During his tenure at Ecolab, Cerilli has played a key role in leading the development of the Industrial digital teams capabilities, monetization strategy, and offering portfolio including six digital services, Ecolab’s eCommerce channel, and various internal sales and service productivity tools. In addition, Cerilli leads the partnership with Microsoft for the Industrial group. Cerilli received a bachelor’s degree in marketing from State University of New York College at Oswego and an MBA at Benedictine University.