Innovations in water sustainability are helping companies future proof their supply chains

According to the UN, the demand for water is expected to surpass the supply of freshwater by a staggering 40% by 2030.¹ This presents a host of challenges for companies operating in the food, beverage and consumer goods value chain, considering that only 2.5% of the world’s water is freshwater and suitable for most industrial and farming uses.²

77%

of food-related businesses view water as a risk³

$436B

value of water-related opportunities reported by global brands⁴

$301B

of business value is at risk unless companies innovate water use⁵

As the challenges of water supply rise, companies that prioritize water sustainability in their supply chains are positioning themselves for long-term success. Global brands reported $436 billion worth of water-related opportunities in 2022, according to the Carbon Disclosure Project.⁴ These opportunities include greater operational efficiency, improved resilience to climate change, new product development and increased investor value based on enhanced sustainability performance.⁴

Four areas where technology is driving water sustainability in supply chains

The good news is that technology and data-driven innovations can help businesses navigate water management from harvest to retail. We explore four areas where companies are applying innovations, like data insights, AI and automation, to future proof supply chains against water-related challenges and contribute to a more sustainable future.

1. Water monitoring

By using data analytics, AI, machine learning and digital and remote-sensing technologies, companies can closely monitor and predict water usage, identify areas of high consumption and uncover inefficiencies. This enables businesses to make informed decisions that optimize water use, and help avoid major disruptions caused by water scarcity events. Also, tech-driven innovations like water footprint assessment tools provide valuable insights into water usage and environmental impact, enable companies to measure and report on their sustainability progress and create product and brand differentiation.

2. Water-efficient technologies and infrastructure

Companies are adopting technologies like closed-loop systems, automation tools, optimization algorithms, advanced water filtration and water recycling to reduce water use and wastage in their manufacturing processes. For instance, L'Oréal operates six waterloop or closed-loop factories globally with the goal of recycling 100% of the water used, thus minimizing water waste.⁶

3. Controlled environment or smart agriculture techniques

Innovations such as smart irrigation systems, infrastructure for indoor and protected environment agriculture and precision agriculture technology like remote sensing and IoT are advancing water use in agriculture and enabling production to take place in more distributed locations, thus reducing risks from climate variability.

4. Supply chain transparency and engagement

Within individual supply chains, collaborations and new approaches to improve water management best practices are taking place. Data systems, blockchain, IoT and sensors are being implemented to drive transparency and traceability and share insights to track and reduce water use, improving collective water stewardship. Companies like General Mills, Cargill, Walmart and Levi Strauss and Co. have made commitments to work with their supply chains to reduce impacts on water use and implement water-conserving practices and innovations.⁷ By adopting these technology-driven innovations, companies can optimize water usage, reduce inefficiencies and demonstrate their commitment to sustainability. This not only helps them navigate water scarcity challenges but also unlocks opportunities for operational efficiency and growth and makes a positive impact on the world. Contact us to see how we can help.