Corp-Print
By making their water footprints public, three beverage companies hope to raise public awareness about natural resources and environmental protection while increasing the efficiency of their operations.
Friday, December 31, 2010
By Lyn Corum
“Economic factors are driving the interest in water efficiency in American industry. If you’re not green, you’re wasting money. Being green is about being careful and thoughtful about expenses and not wasting water you pay for, like potable water.” –Jack Wittman, Director of the hydrogeology group at Layne Christensen.
Global water shortages amidst rising populations, rapid economic growth creating increasing demands for water in developing countries, and climate change are creating great challenges, especially for global businesses whose products rely on water as a basic ingredient.
Because of those challenges, public companies are now facing questions from investors and stockholders about environmental, governance, and social risks that will affect corporate bottom lines. Food and beverage companies have been taking the risk of global water scarcity very seriously, and they are not waiting for inquiries from their shareholders to start reducing water and energy usage. However, they still needed a boost to become more transparent and to declare publicly the actions they were taking.
This is the story of how three beverage makers are responding to the challenges, not only of the water scarcity risk to their bottom line, but also of the need to show how they are dealing with that risk. The perspectives of two engineering companies providing the technologies they need are also included.
What Is a Water Footprint?
It is an indicator of how consumers and producers use water both directly and indirectly. The concept was created by Professor Arjen Y. Hoekstra, scientific director of the Water Footprint Network, www.waterfootprint.org. It measures the amount of water used in the life cycle of a product—from the time seeds for cotton were watered, for example, through the manufacturing process of a shirt, to its shipment to market.
The Water Footprint Network has calculated that it takes 166,000 liters of water to produce 1 kilogram of beef, 1,000 liters of water to produce 1 liter of milk, 3,000 liters of water to produce 1 kilogram of rice, and 140 liters of water to produce one cup of coffee.
The concept of a corporate water footprint is no more than three years old and came to life very quickly—according to Jason Morrison, project director at the Pacific Institute—when a few companies launched the CEO Water Mandate in July 2007 within the United Nations Global Impact. The Pacific Institute has a memorandum of understanding with the UN Global Compact, and Morrison is the institute’s technical director.
The companies who signed the CEO Water Mandate, including Coca-Cola, PepsiCo, and Nestlé, promised to develop, implement, and disclose water sustainability policies and practices. The mandate also requires the companies to commit to aligning their operations and strategies within 10 principals in the areas of human rights, labor, environment, and anti-corruption. To read the full CEO Water Mandate on the UN Global Compact, go to www.unglobalcompact.org.
The Risks Involved
A company’s vulnerability to water scarcity occurs on many levels and, if not fully addressed, can cause economic calamity. There is physical risk related to water scarcity: flooding or pollution, delivery of the water supply, or even poor resource management. There is also regulatory risk related to government’s management of water resources in times of crisis or political upheaval. And there’s even a perception risk associated around business decisions relating to water resources that can actually affect customers’ purchasing decisions.
With these risks come financial hazards since both physical and regulatory perils can affect revenues if they result disruptions of a company’s production or supply chain. As a result, institutional investors are arguing for increased disclosure of water dependencies inherent in corporate and commercial supply chains. Water scarcity and climate change are also making individual investors and the public more aware of water issues.
For PepsiCo, improvements in water and energy efficiency are a long-term goal.
In 2009, PepsiCo was asked by Northstar Asset Management (a PepsiCo shareholder) if the company respects water as a human right in the context of the United Nations/World Health Organization document which addresses the topic. Since the company claims a long history of positive water stewardship (it was one of the original signers of the CEO Water Mandate in 2007), PepsiCo decided to make a public statement about its commitment in support of water as a human right, and in 2009 PepsiCo became the first company to formally recognize water as a human right. In a statement announcing his opening keynote address at 2009’s WaterSmart Innovations Conference, Dan Bena (PepsiCo’s Director of Sustainability, Health, Safety, and Environment) backed up PepsiCo’s commitment saying, “You cannot de-couple the many elements of the water crises with which the world is faced. Water sits squarely at the intersection of agriculture and food security, global health, and even education and gender empowerment in developing economies. We need to solve the problems comprehensively, and conservation is one very important part of the solution” (www.watersmartinnovations.com/PDF/WSI_Dan_Bena_Keynote_FINAL_7.13.09.pdf). In 2009, In 2010 Bena went on to publicly discussed the challenges and pitfalls of the commitment on a panel at the United Nations CEO Water Mandate meeting. PepsiCo’s Corporate Sustainability Report is now available for reading at www.pepsico.com/Download/PEPSICO_2007_Sustainability_Report.pdf.
“We can easily see from [the] trends that water is core to survival—of the business and of our consumers. The line between a risk and an opportunity often lies in the response,” PepsiCo said in a statement to Water Efficiency.
Rapid and non-incremental changes to water availability and quality threaten its communities and ability to provide beverage and food products. “Water is such a visceral issue that it threatens our reputational risk if not managed responsibly,” the statement continued.
PepsiCo’s Progress
Here are some numbers illustrating what PepsiCo has done: It has conserved more than 7.5 billion liters of water since 2006 and improved water use efficiency by 15%. In 2007, it set a global goal to reduce water consumption by 20% per unit of production by 2015.
In India alone, the company reduced water use in manufacturing by over 55% since 2007, saving more than 2.5 billion liters of water through conservation efforts. PepsiCo is working with India’s farmers to reduce water intensity in rice cultivation through direct seeding to avoid flooding fields with water. Rainwater harvesting systems have also been installed in most of PepsiCo’s plants. In the Gatorade plant in Mexico, the rainwater harvesting system collected 640 cubic meters of water in 2009 to help recharge the underground aquifer. It contributed to the business’s overall water usage reduction of 10.5% that year.
PepsiCo has also developed a PC- or Web-based diagnostic with audit guidance and solution sets to formalize and embed conservation practices in its manufacturing facilities. The Water ReCon tool is a component of its Energy Resource Conservation tool. It also developed a Water Profiler which will map and quantify all major water uses within a facility, identify relative local costs of the applications, and create a list of measures that can be implemented both in the short term and long term. The company predicts the tool will eventually reduce water use 10% to 20% corporation-wide. It is now being expanded for use in its franchise bottler network and out to co-packer partners.
In the UK, PepsiCo Walkers Crisps’ business has reduced water usage at its largest potato chip facility by 42% between 2001 and 2007. Potatoes contain a lot of water, and Walkers captures the moisture and reuses it to make their facilities self-sufficient in water. Since 2000, Walkers has also reduced its energy use/pack of crisps by one-third. Walkers also became the first consumer brand to pilot the original method for assessing product carbon footprints and the first major food brand to display a carbon footprint/education label on its packs.
In Ho Chi Min City, Vietnam, PepsiCo partnered with SIF Technologies to conduce a joint pilot water reuse project at the company’s plant. According to the company’s Web site, SIF Technologies is an environmental engineering company based in Singapore that provides assistance to a variety of companies interested in effluent recycling, water contamination remediation, and environmental compliance. Ultimately, the pilot program proved so successful at increasing water efficiency at the plant the decision was made to institute a full-scale version of the trial project.
In the US, PepsiCo began cleaning new Gatorade bottles with purified air instead of rinsing with water. The method works so well it is being adopted by bottling facilities around the world, saving billions of liters of water. In Arizona, PepsiCo-owned Frito-Lay is working to transform its manufacturing facility in Casa Grande to a “net zero” energy-use facility. The facility has been equipped with a state-of-the-art water filtration and purification system to recycle and reuse approximately 80% of the process water used in production. The waste recovery system allows for a section of the existing wastewater land-application area to be repurposed for use in a future solar and biomass system that will reduce the use of nonrenewable energy at the plant by 80% to 90%. In Florida, PepsiCo’s Tropicana juice plant utilized membrane systems provided by Doosan Hydro Technology as part of its juice production.
PepsiCo is reducing its carbon emissions through more efficient use of non-renewable fuels and increased use of renewable energy. A Frito-Lay plant in Connecticut has installed a 4.6-MW combined heat and power (CHP) plant that generates enough electricity to offset the total electrical demand of the plant.
And in collaboration with the Earth Institute at Columbia University and the Carbon Trust, PepsiCo’s Tropicana Pure Premium Orange Juice became the first consumer brand in North America to have its carbon footprint independently certified by the Carbon Trust. The carbon footprint for a 64-ounce carton is 1.7 kilograms, starting from growing the oranges, to processing and packaging, distribution use, and disposal. This number will be used as a verifiable benchmark against which the company can measure greenhouse gas reduction progress going forward. More than 10 of PepsiCo’s consumer products are now being evaluated for a carbon footprint.
The company has seen success at its locations outside the US, as well. In 2007 and 2008, 17 oil-fired boilers were converted to use biomass briquettes at plants owned by PepsiCo India. A wind turbine was installed at the Mamandur plant in India offsetting up to 5% of the bottling operations’ power requirements for 2008. It also reduced carbon emissions by about 13,000 tons. PepsiCo India generated 16% of its energy in 2008 through solar lighting and biomass boilers. PepsiCo’s UK team is also committed to increasing its renewable energy use. In 2008, it reduced its energy use by 11.8% a doubled its renewable electricity use to 16%. It plans to derive all energy used in manufacturing and distribution from renewable sources within 15 years. With these and other projects in the US, Turkey, and Mexico, PepsiCo has saved 10,000 MWh of fossil fuel-generated electricity, thereby eliminating 13,000 tons of carbon emissions, equivalent to the carbon dioxide absorbed by 40,000 trees.
Coca-Cola Reduces, Recycles, Reclaims
“There is no ‘beyond petroleum’ for Coke. Without water, Coke has no business,” says Lisa Manley, director of sustainability communications. “We rely on water for sustainability.”
Coca-Cola is a global company, but business is local in 200 countries and territories. “We’re not an export company, we know communities are not going to develop and be economically healthy if they don’t have water. The key is to have access to safe water. It’s also critical to sustain communities that sustain our business,” says Manley.
Manley says the company has been measuring its water use since 2002 and announced its goals in 2007 to reduce, recycle, and reclaim. Coca-Cola’s long-term water goal is to return an amount of water back to nature equal to the 300 billion liters of water used in its bottling plants worldwide.
In its 2008 Sustainability Report, www.thecoca-colacompany.com/citizenship/index.html, Coca-Cola reports that it has improved water use efficiency from 3.12 liters of water per liter of beverage in 2002 to 2.47 liters of water per liter of beverage in 2007. Key to reducing its water use efficiency was the use of air in drying its beverage containers instead of water to rinse away any dirt. The goal is to further improve its water use efficiency to 2.17 liters and to improve overall water efficiency in its plants by 20% by 2012.
The company is working in partnership with the World Wildlife Fund (WWF) to develop tool kits to look at its product mix. The tool will provide water use ratios at one plant that can be compared with best-in-class plants that have similar product mixes, thereby helping the plant manager to manage his water system properly. “It’s important that plants see what other plants are doing,” she says. Water use ratios—or indexes—should be comparable.
The second goal, recycling, involves wastewater treatment. Sixty percent of the 300 billion liters of Coca-Cola’s water used in bottling is used in production facilities, including heating, ventilating, and cooling systems. Manley explains that in 70% of the developing world there are no (or very low) standards for wastewater, and most of the time, wastewater ends up back into the local watersheds. Because, as Manley says, Coca-Cola’s “believes we cannot lead if this happens,” the company is committed to effective and efficient wastewater treatment.
“Everywhere we operate, we have a wastewater treatment facility and work with the local government to raise awareness of its impacts. Our goal around wastewater treatment is: Where they don’t exist, we invest in our own. Where there is a municipal wastewater treatment facility, we send our wastewater there.”
In the UK, Coca-Cola has successfully upgraded the water treatment facility at its Wakefield bottling plant. With a system provided by Severn Trent, in association with Norit Membrane technology, the Wakefield facility increased supply capacity by 30% while also improving influent quality.
Part of Coca-Cola’s water treatment planning involves using the efficient conveyance systems available. When it comes to energy use and water efficiency, a wastewater treatment facility is only as good as the pumps it uses. For Coca-Cola and PepsiCo, dispensing pumps from ITT are the answer. ITT’s fluid technology division provides customers with tools designed to reduce water and energy use in industrial wastewater treatment.
According to Manley, it’s with the company’s third goal—replenishment and reuse—where Coca-Cola is really breaking ground. It all began with the establishment of the long-term goal of returning to watersheds the same amount of water the company uses by 2020. Of the 300 billion liters used, Coca-Cola estimates that 172 billion—more than half—will be returned to watersheds through wastewater treatment, with another 112 billion liters returned through additional replenishment practices.
Coca-Cola is also reclaiming post-consumer packaging and packaging materials. The company’s bottle-to-bottle recycling plant in Spartanburg, SC, will produce approximately 100 million pounds of PET plastic for reuse every year. Furthermore, in 2007, Coca-Cola began investing in the design and production of T-shirts made from recycled PET bottles, and in 2008 the product line was expanded to include totes, loungewear, and caps.
Coca-Cola is also partnering with the WWF in an effort to protect local watersheds and reduce the company’s carbon footprint. Part of that joint effort involves working on measures to conserve seven key freshwater basins along the Yangtze, the Mekong, the Danube, Rio Grande/Rio Bravo, Lake Niassa, the Mesoamerican Reef catchments, and the rivers and streams of the Southeastern US. The work will include monitoring and measuring impact of water going into the watersheds, Manley says. Coca-Cola is also partnering with WWF to stabilize and reduce its by 2015 carbon emissions systemwide by 5% in Kyoto Protocol developed countries. The company has been working with the Carbon Trust since 2007 to assess its carbon footprint of certain products and will be identifying cost-effective opportunities to reduce its carbon footprint.
Since 2000, Coca-Cola has worked to improve the energy efficiency of its cooling equipment (including coolers, vending machines, and fountain equipment) by 40% to 50% by 2010, according to the company’s 2007 Sustainability Report. And by transitioning to hydrofluorocarbon-free insulation foam in all of its new refrigeration equipment, the company has successfully mitigated the three quarters of the direct carbon emissions created by its old equipment. Starting in 2002, Coca-Cola has also improved its energy use efficiency by 19% by doing the basics in its facilities and bottling plants: fixing leaks, insulating pipes, reducing pressure and optimizing temperatures, and installing efficient lighting. It is also investing in CHP systems.
Not surprisingly, Coca-Cola’s transportation footprint has remained relatively low due in large part to the fact that a majority of its bottling operations are largely local. And by using supplementing their fleet with hybrid passenger cars for its sales force and delivering products to market in diesel-electric hybrid delivery trucks, the company has managed to control its fuel consumption and greenhouse gas emissions.
As for the future, Manley points to Coca-Cola’s investments in Clean Tech venture funds as proof that the company is willing to put their money into next generation technologies. “This gives us an insider look at these innovations . . . and allows us to be early adopters.”
Nestlé Waters North America Slims Down
Starting as far back as 1997, Nestlé Waters began monitoring its water consumption, greenhouse gas (GHG) emissions, and the use of energy from non-renewable resources at what—over the last decade and a half—has morphed into 25 bottling facilities and 70 branch offices worldwide. The company also monitors the water table levels of its springs and the rates at which they are filled. Since 2000, Nestlé has reduced total water consumption in its factories, not counting water going into its products, by 7.8%. Its 2009 goals were to reduce water consumption another 5%, energy consumption by 5%, and packaging weight by 3%. The company could not supply updated numbers as it is analyzing and preparing for its next Citizenship Report.
Nestlé now uses 1.37 gallons of water to produce one gallon of spring water, compared to 2.4 gallons of water used to make 1 gallon of a soft drink, and 5 gallons of water to make 1 gallon of beer, according to its Citizenship Report. The company was able to achieve those savings in part by deciding to reduce the average weight of its bottles by 20% in 2007. By redesigning its half-liter bottle, now called the “Eco-Shape,” and by making that bottle lighter, Nestlé reduced overall plastic use by 30% with an additional reduction in energy use and GHG emissions. A reduction in the bottle’s label—now 35% smaller than the previous labels—allowed the company to save an additional 65 million pounds of PET resin and almost 10 million pounds of paper annually, according to the Citizenship Report.
Nestlé completed a GHG inventory in 2007 using 2006 data. It found that the carbon embedded in PET resin has the greatest impact, accounting for just over half of the 1,696 million metric tons of its corporate carbon emissions. By light-weighting its half-liter Eco-Shape bottles over fiscal years 2007 and 2008, it used an estimated 140 million fewer pounds of PET resin, reduced the PET GHG intensity by more than 12%, and avoided 260,000 metric tons of GHG emissions, according to its Corporate Citizenship Report. Find it at www.nestle-watersna.com.
There are also reductions to be had in terms of products and packaging. In December 2009, Nestlé announced its next generation Eco-Shape bottle would reduce plastic an additional 15%. Weighing 9.3 grams, the bottle will now use 60% less plastic than the company’s original pre-Eco-Shape half-liter PET bottle. In its final incarnation, Nestlé is planning to create a 2020 version of the Eco-Shape bottle made entirely from recycled materials or renewable resources. When it comes to packaging, Nestlé is committed to reducing energy and material use, reusing materials left over from manufacturing and products such as its five-gallon bottles that can be used multiple times. The company also supports consumer recycling programs to increase the recycling rate of its empty bottles.
Nestlé’s water sustainability efforts are extensive, and by the fall of 2010 the company expects to complete its siting and community commitment framework. Developed through a set of interviews in late 2009 with internal stakeholders and national experts at its facilities in the Pacific Northwest and Maine, the new community commitment framework will address all of Nestlé Waters’ future business objectives. Codeveloped by stakeholders and company staff, the framework objectives were developed using positive and negative feedback about the company’s community engagement and water stewardship practices.
Nestlé Waters was the first beverage manufacturer to build processing plants achieving Leadership in Energy and Environmental Design (LEED) certification from the US Green Building Council’s (USGBC) Leadership in Energy and Environmental Green Building Rating System. The company’s Stanwood, Michigan plant was LEED-certified in 2003, and Nestlé now boasts a total of 9 LEED-certified plants, including newly christened bottling plants in Allentown, PA, and Kingfield, ME. According to the company’s 2008 Corporate Citizenship Report, the first five LEED plants have reduced energy use by 1.5 million kWh, reduced carbon emissions by 2.1 million pounds, reduced water use by 9 million gallons, and reduced overall waste by 216 million pounds.
GE Power & Water Innovates
In April of this year, Jeff Fulgham was appointed chief sustainability officer and Ecomagination leader for GE Power & Water’s Water & Process Technologies division. Fulgham acknowledged the key issue driving this division’s business opportunities revolves around growing global water scarcity. Demand for water is outstripping supply, and water quality around the world continues to deteriorate, he says.
GE Water has worked with both Pepsi and Coca-Cola, says Fulgham, applying high-recovery technologies that have allow both companies to reduce the ratio of water demand to product use. Using membrane technology, such as electrodionization—developed by GE developed 20 years ago—is one method for producing as much pure water as possible for the beverage giants.
According to Fulgham, GE Water is pushing its technology to the next step with products that have the ability to recover 99% pure water using electrical current and membranes to separate contaminants from water. “By combining technologies we can increase water recovery,” he says. GE Water will be running pilots to test this new technology at both PepsiCo and Coca-Cola starting late in 2010.
There are three basic areas in water optimization: water reduction, wastewater recovery, and energy reduction, Fulgham explains, and the company has developed technologies to work in each of these areas. When optimizing water use, he says, “We help [companies] think about system integration and the holistic water cycle. GE Water has developed analytic tools customers may use to do this.”
Fulgham says GE Water is doing a lot to reduce energy needed to treat water. It is now working to reduce the amount of energy the RO process uses. Another energy reuse technology cleans up hot water in a plant allowing it to be reused instead of releasing it in a drain. Value can be extracted out of waste streams by removing and burning high organics in a biomass plant—run by a GE Jenbacher engine, of course, Fulgham says.
In wastewater optimization, GE Water has developed an advanced filtration technology named ZeeWeed. The ZeeWeed membrane bioreactor technology developed for wastewater treatment can clean water to such an extent, the size of the wastewater treatment plant can remain small and avoid expansion. Fulgham touts it as “the last line in containing dissolved and suspended solids.”
“All of our membrane technologies separate contaminants from water,” explains Fulgham. By reducing the size of the holes in the membranes, ever smaller contaminants can be removed, he says. The range of membrane filtration processes starts with microfiltration, then ultrafiltration, nanofiltration, and the highest level of filtration—reverse osmosis.
Layne Christensen Hydrogeology
Jack Wittman is director of the hydrogeology group at Layne Christensen, headquartered in Mission Woods, KS. The company provides water-related services and products including hydrological studies, site selection, well design, drilling and well development, and more. Wittman was president of Wittman Hydro until he sold the business to Layne Christensen a few years ago.
Wittman says the company does get contacted by firms which want to reduce water use. The business has picked up dramatically in the past five years, he says. Wittman works with clients to identify water sources and to identify options that will lower water volumes or to reuse the water. “We are trying to bring in the [water] reuse side of the equation to industry. It becomes a matter of quality and treatment. We will find better ways to reuse water.”
Wittman acknowledges that the food and beverage industry must use high-quality water. But conservation can work with how a manufacturer cleans his machinery—by not using potable water, for example. Washing bottles with air is such an innovative way to go, he says. Beer manufacturers are going this way as well.
The pricing of water is the big problem, Wittman says. What we pay for is the cost of delivery and not the cost of the resource or where it is located. “Being an environmentalist and businessman since the 1970s, I know that business always reacts to signals in front of it.”
Wittman usually looks at wastewater discharge as a water source. The people who manage wastewater now understand their effluent can be sold. A market is developing naturally and everybody is winning, he observed. For example, discharges may be of a quality that makes it appropriate to use in cooling towers or for temperature control inside an industrial plant.
How serious are large corporations about becoming green? “I don’t think it matters anymore,” answers Wittman. Yes, they want to look good, but if these intentions create good behavior, that’s good. It says, “I want to work responsibly with the resources.” On the other hand, “if money is the reason, that’s great,” counters Wittman. “That’s one of the best incentives. Economic incentives drive people’s good intentions.”
Further reading: Investigating Shared Risk in Water: Corporate Engagement with the Public Policy Process, March 2009, prepared by Pegasys Consulting for the World Wildlife Fund, www.worldwildlife.org.
Author's Bio: California-based Lyn Corum is a technical writer specializing in energy topics. |
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