Nationwide Water-Shortage Issues Spill Onto CEO’s Agenda

CEOs are making availability and development of water resources a bigger interest and concern across the board as record-breaking drought continues in California, as the Colorado River Valley deals with supply issues, and as the future of water remains an issue in other regions, including Texas, the Great Plains and the Southeast.

As a result, water technologies have been the basis of more startups and research efforts, while some packaged water providers have continued to withdraw resources for their own benefit. As global water supplies become more stressed—by larger populations and perhaps by climate change—CEOs will see such issues become more acute.

“The biggest concern from a natural-resource point of view now isn’t energy. It’s water, which will really have an impact.”

Tim Brown, CEO of Nestle Waters North America, is running point on this concern as he deals with complaints in California that his company has continued its water-bottling operations despite the state’s worsening water crisis. The critique has been that the company “is bottling California’s water, selling it, and profiting while the state suffers from a scorching, record-breaking drought,” in the words of an email to supporters by the League of Conservation Voters.

But Nestle Waters has countered that it carefully manages withdrawals of water under its 25-year lease from the Morongo Band of Mission Indians near Cabazon, in the state’s arid south, and that the amount of water it withdraws makes up just 0.004 percent of total water use throughout California.

Meanwhile, Chicago-area entrepreneur is examining the other side of the coin on water availability for commercial opportunities. Michael Reardon, CEO of Triwater Holdings in Lake Forest, Ill., lying cozily on the western shore of vast Lake Michigan, has rolled up five small water-technology companies in the last few years and is searching for more. His selections have tended to the mundane, such as pipe services. But as municipalities, consumers and other constituencies move more strongly to conserve increasingly precious water resources in the years ahead, the co-founder of U.S. Filter sees opportunity in the making.

There’s a similar philosophy about 100 miles north on the shoreline in Milwaukee, where state and private interests have put together what has been hailed as the most effective economic-development effort in the country based on leveraging fresh-water resources. In other states such as Michigan, economic developers have targeted water technology as a high-growth sector.

So far, corporate site selectors haven’t seen many companies make decisions on the basis of future water availability. “They look at places in the west, and so far we haven’t had anybody who’s a monster water user having major problems getting water,” site consultant Scott Kupperman told CEO Briefing.

But more CEOs are likely to give the water-resource advantages and disadvantages stronger consideration in the future. “The biggest concern from a natural-resource point of view now isn’t energy,” said Larry Gigerich of site-consulting firm Ginovus. “There’s more comfort about supply. The concern now is water, which will really have an impact.”


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