This feature news is part of Singapore International Water Week's (SIWW) series of 1 on 1 interviews with global water industry leaders, Conversations with Water Leaders. In this edition, Peter Brabeck, Chairman of the Board, Nestlé S.A. shares the concept of Creating Shared Value and how it can improve water and wastewater management. He also sheds light on the new 2030 Water Resources Group initiative and ways on how water can be made priority on the political agenda. Read about Peter Brabeck-Letmathe
The Conversations series is part of SIWW's initiative on practical discussions and solutions. In line with this, Water Leaders Summit will continue to engage policy makers, utilities, governments, industry experts and water leaders with aims to identify and craft solutions to pertinent water issues. Discussions from the SIWW Water Utilities Leaders Forum will also be further deliberated at the summit.
Finally, do log onto Virtual Water Expo to view the solutions showcase and keep abreast of the latest products, equipment and services available from global water players!
In recent years, Nestlé’s management practices of water and wastewater have been one of the best among major Fortune 500 companies. You have personally played an important leadership role to put water on the international political and industrial agenda.
Can you please tell us what events and facts triggered Nestlé’s and your interest in water?
Some eight years ago, as we were celebrating the 140 years’ anniversary of Nestlé, I was reflecting on the biggest challenge for our company, and I realised that water was critical. From there, I began to look into water-related issues and in particular, the water situation in the world. I was astonished by what I discovered: there was a clear problem emerging in the discrepancy between our use of water and global water availability. Studies show that we are using 10% more water than is sustainable in the long term and that this gap is expected to widen with the growth of the global population, with prosperity and urbanisation.
Availability of and access to water matters for Nestle on many levels: our farmers need water to grow raw materials for our products; we need water in our factories to process these raw materials, e.g., as a solvent and for cleaning and hygiene in general; and consumers need safe water to prepare many of our products.
Underlying all this, water is essential for the survival of humankind; water is a human right.
Too many of us, however, take water for granted and do not attribute any value to it, despite the fact that it is the by far most valuable resource we have.
Nestlé almost single-handedly created and established the concept of Creating Shared Value. It is now an important part of Nestlé’s DNA.
Can you please elaborate on creating shared value and how it can improve water and wastewater management practices and processes?
We have just published our 2013 Annual Report as well as our annual Nestlé in Society report. This explains the concept of Creating Shared Value (CSV) and what it means for us: it is our fundamental belief that for our company to be successful in the long term and to create value for our shareholders, it must also create value for society. Now, this is not a new kind of ‘DNA’ for the company; it is a concept that has its roots firmly in the - almost - 150 years of Nestlé’s life history.
In CSV, we at Nestlé focus on three areas: nutrition, rural development and water. The approach is action-oriented and fully transparent. For each area, we have defined clear commitments and we report on our progress. With respect to water, our approach centres on water use efficiency, effective water treatment (by the way, the first wastewater treatment plant in the Nestlé Group was built in the 1930s) and engaging with suppliers, particularly farmers, to help them make their agricultural processes less water intensive.
But corporate initiatives alone will not bring about the changes needed to really tackle the challenge of water. Our fourth pillar within the water CSV-strategy is, therefore, advocacy for effective water policies in individual watersheds.
Water is a local issue, there are no global solutions; at the same time, it is a horizontal and complex issue for which isolated piece-meal actions will have little or no effect. Indeed, once the problem of overdraft in a watershed has been identified, the active co-operation of all stakeholders is needed - in a context of strong government leadership. This is the approach taken by the 2030 Water Resources Group which I chair.
Water must be used more efficiently and we need to make it clear that this is an urgent issue that has to be tackled now. One of the key risks is for our supply of food– 70% of all freshwater withdrawn for human use goes to agriculture and more than 90% of water actually used is to grow crops. If we don’t find comprehensive and cost-effective solutions very soon, the water overdraft in major cereal-producing regions may lead to a major food crisis in the world.
How is this 2030 Water Resources Group initiative different and can new partners be integrated in its efforts?
2030 Water Resources Group is an innovative public-private partnership involving the private sector, civil society organisations, the World Bank Group, three regional development banks and several governmental development organisations. The group has a global view, but acts locally. It provides information and advice for governments to set coherent strategies in countries and watersheds, taking a disruptive approach that aims to overcome the various political and ideological rigidities often found in solutions to water overuse.
We are constantly looking for new partners, particularly at the local level and on the business side. Wherever we are active, we are building up or extending multi-stakeholder groups: Peru, Mexico, South Africa, Tanzania, Jordan, Mongolia, India (Karnataka) and possibly Lebanon, Bangladesh and Kenya.
Water becomes an important component of the national political agenda when there are serious floods, prolonged droughts or natural disasters. In between, it often vanishes from the political agenda. As the Singapore experience shows, for water management and national water security to improve, water must remain a high priority on the political agenda.
What can be done to prioritize water on the political agenda?
Water-related issues are complex – they involve numerous uses and users, problems of overdraft, problems of quality - and all aspects overlap. Further complexity arises out of the political, societal, environmental and even spiritual aspects of water. So water-related issues represent a major challenge that, in a first stage, require communication based on the clear identification of all the issues involved and their causes.
In order to keep water high on the political agenda, we then need alignment on priorities. At the end of 2012, I was invited, as a ‘business ambassador’, to provide input to the UN Secretary General on water-related post 2015 UN Development Goals.
I proposed that water be included as a stand-alone goal, with four key targets, all of which would require a joint effort on the part of all stakeholders under the leadership of governments:
1) Universal access to safe drinking water by 2025 at the latest, with a parallel focus beyond 2025 on the quality of water, taking us from a focus on “improved” water to a focus on “truly safe drinking water”. Water for survival is a human right! Moreover, I stressed the importance of looking for ways to implement this goal; declarations are never enough. A key issue here that would need to be addressed is finding agreement across governments and stakeholders on the amount of water any individual who cannot pay should be able to access at zero cost. This amount must be set such that it can be provided within the current financial resources of municipalities.
2) Improved sanitation. Accelerate the provision of access to improved sanitation to at least 120 million additional people per year, aiming for universal access before 2050. Data on actual improvements achieved to date show that this is realistically possible and, with strengthened efforts, I am convinced that political leaders can set themselves more ambitious targets.
3) Adequate treatment of all municipal and industrial wastewater prior to discharge by 2030. There is a need to introduce best practice initiatives to reduce groundwater pollution from agricultural production.
4) Address the water overdraft. If we don’t change the way we are using water today, we put all the three targets mentioned above at risk. The nexus discussion – water-food-energy – moreover demonstrates that water shortages will become a choke point for economies, particularly for those economies which are today moving out of widespread poverty. Even worse, and as mentioned above, we risk shortfalls of up to 30% of global cereal production due to water scarcity by 2030. In sum, we have to bring freshwater withdrawals (for all uses) back into line with sustainable supply (natural renewal minus environmental flows), watershed by watershed.
This fourth target is clearly relevant for the first three. We need to use water more efficiently and we need to make it clear that the water challenge is urgent and must be tackled now.
What are the water-related messages you would like to convey to the participants of the Singapore International Water Week?
I would like to invite all participants to reach out to non-specialists; those who come to the Singapore International Water Week know the problems surrounding water and know how to address them. But this knowledge has to be shared. There are many ways to do this; one that I have decided to focus on is my personal water blog – www.Water-Challenge.org. Most of my readers are interested citizens and stakeholders from a diverse set of backgrounds; they are not necessarily part of the specialist water community. So I would like to invite input and comments on my blog from participants in the Singapore Water Week. Needless to say, there are many more ways to reach out and I welcome any thoughts and ideas in this regard.
My second message to you: please support ongoing efforts to include a water-related goal in the post-2015 UN Development Goals. Since awareness of the challenges and of the solutions is not, by itself, enough, we must align and focus on clearly defined targets such as those I proposed above.
About Peter Brabeck-Letmathe
Chairman of the Board
Peter Brabeck-Letmathe led the Nestlé Group from 1997 to 2008, first as CEO, until 2005, and then as Chairman and CEO. In April 2008, he handed over the office of CEO and remained Chairman of the Board of Nestlé S.A. Peter Brabeck-Letmathe serves as Vice-Chairman of both L'Oréal and Credit Suisse Group. He is Chairman of the "2030 Water Resources Group", a Public Private Partnership housed in the IFC/World Bank, Washington. Mr. Brabeck-Letmathe is also the Chairman of the Board of Nestlé Health Science S.A. and of Delta Topco Limited (Formula 1). In addition, he is member of the Exxon Mobil Corporation Board.
Born in 1944 in Austria, Peter Brabeck-Letmathe graduated from the University of World Trade in Vienna with a degree in Economics. He has received several awards, including the Schumpeter Prize for Outstanding Contribution in Disruptive Innovation, the Austrian Cross of Honour for services to the Republic of Austria and "La Orden Mexicana del Aguila Azteca". The University of Alberta (Canada) conferred an Honorary Degree of Doctor of Laws on him and he serves as the Chairman of its External Advisory Board.