The severe drought that has resulted in strict water restrictions in many of South Africa’s municipalities is spurring local industries to rethink how they do business. The problem is a long-term and global one, with the United Nations predicting that by 2025, two thirds of the world’s population will live in water-scarce areas. It is the kind of crisis that changes the way big business invests and innovates, and we will likely see significant shifts around this resource.
Investors and big banks such as Goldman Sachs, Deutshe Bank and Barclays are already buying water rights, investing in water-rich farmland and plugging money into water utilities, infrastructure and equipment. Coca Cola has just invested $2-billion in reducing water use and improving water quality within areas in which it is produced.
“As the cost of using this valuable resource goes up, businesses that rely on it are forced to adapt their strategies to become more water-wise,” says John Schooling, MD of construction and renewable energy group, STAG African.
In Africa, where efforts to develop infrastructure must take in to account drought and climate change mitigation regulations, the construction industry presents a good demonstration of this trend; “Heavy water usage used to be a key component of construction – but green building technologies have freed us up from much of our reliance on it. Adopting new techniques is quickly becoming the most affordable way to build,” says Schooling.
STAG African’s green agenda developed as a result of a property industry slump in 2008, coupled with growing awareness of the serious shortage of university residences. “Few things spur innovation as effectively as a crisis,” says Schooling about the shift that saw the company change from traditional building methods to innovative building technologies that not only saved on cost but were environmentally conscious too.
“Building technologies that require less water will become one of the best investments for developers, as will engineering and design elements that maximise the harvesting of rain and wastewater on site,” says Schooling.
While the early waves of the adoption of green strategies and methods may have been spurred by environmentalist commitment, it is the economic cost of not innovating that is driving the larger shift. As with oil, the value of this non-renewable resource will grow dramatically – and efforts to shift away from reliance on it make solid business sense.