Big Corporations Contribute to Water Shortages — How Can They Fix It?

Everyone needs water--but water consumption is not always proportionately distributed. Here's a deep dive into how larger companies use water, and how they can consume better.

• By Jenna Tsui
• Jun 03, 2020

Big corporations are big for a reason. They are the powerful companies behind the names you hear every day, like Google, Amazon, Walmart or Coca-Cola. Due to this all-encompassing nature, however, they also use up significant amounts of resources — one of them being water.

As big corporations consume mass amounts of water, the smaller, local communities near the plants, factories and corporate offices have fewer resources. Water shortages then become prevalent as the corporation continues to use up the nearby sources. Water privatization and siphoning are two major issues when it comes to shortages. In order to make a meaningful change for smaller communities, big corporations will need to work on alternatives.

Invasive Corporations

Corporations that open facilities in smaller, rural communities often become invasive since they use up resources that could be going to local residents. Water is among the top priorities for conservation.

One of the most common examples of an invasive corporation is Coca-Cola. Since one of the main ingredients in the soda is sugar, a significant amount of water goes into the agricultural process for the company. Then, production and manufacturing processes use many gallons of water as well.

After legal battles with local residents in India, the company had to shut down several factories. From the backlash, it devised an initiative where it would give back the same amount of water that its facilities use for manufacturing. The issue here, however, is that the company does not specify where it will return the water. Often, it is not where they sourced it, which depletes local communities' water further.

Similarly, in Phoenix, Arizona, Google opened a new data center that is causing concerns over water shortages. Though residents use hundreds of gallons of water each day, Google's data center uses one million gallons per day as a means of cooling the facility.

Furthermore, the company can receive up to four million gallons per day if it reaches its production goals at the facility. It uses water for the evaporative cooling of its processing units so they do not overheat. Since this is cheaper than using energy-based cooling, the company seeks more water resources.

Then, the surrounding community faces water shortages as the corporation continues to grow.

Siphoning

The bottled water industry has grown significantly in recent years. Because of this growth, a different kind of invasiveness comes into play. Water siphoning occurs when companies take water from natural resources in order to bottle it for profit.

Nestlé, the worldwide food and drink corporation, has stepped into some controversy recently with its over-use of water siphoning. In fact, the company has siphoned 45 million gallons of spring water from California's Strawberry Creek alone. This level of water usage led to pushback from local communities. Some conservationists commented that certain creeks have dried up because of Nestlé's actions.

In places like California, where wildfires are common, these water shortages could lead to bigger issues regarding public health and safety. Nestlé's actions dry up or deplete ecosystems as well, as it continues to siphon.

The Securities and Exchange Commission (SEC) has been looking into the importance of sustainability matters in exchanges. The Commission noted pressure from investors and interest groups to move towards environmentally-friendly practices — one of them being a focus on resource scarcity, like with Nestlé. As the SEC continues to pursue this initiative, though, some communities are taking action to stop siphoning and water overuse.

Olympia, Washington

Since many corporations show no signs of slowing down, local governments and communities have started to take action. In Olympia, Washington, officials and residents noticed companies taking advantage of their water resources and policies — predominantly water bottling companies.

The city then started to pursue legal action to prevent this resource mishandling in the future. Since Washington is rich in natural water resources like rivers and springs, this path is necessary for the city. It can help prevent water privatization, which corporations bring about when they take control of a public water system through a purchase. Instead of going to corporations, many policymakers and residents are trying to ensure that the water goes to local purposes. With stronger guidelines and laws, corporations will not be able to take advantage of the water availability, and residents can continue to use it for themselves.

Water Conservation

Legal action is one route that cities can take. However, for more progress, corporations will need to change their policies and processes, too. Specifically, water conservation is at the forefront.

For instance, Starbucks has recently committed to pursuing more eco-friendly initiatives in the next decade, one of them being reducing its water waste. With more precision and care about how the coffee chain uses water, there will be more for local communities to use.

Additionally, corporations can look into different water risk monetization tools that help with conservation. These tools aid in long-term business benefits and risk-mitigation so that companies save money, maintain helpful PR and do not cause water shortages for local communities.

The Corporate Effect

Corporations have significantly negative effects on local communities and the environment when they take advantage of water resources. Combating this trend starts with states enacting stronger legislation to protect communities. However, corporations must also commit to water conservation measures, like risk tools and initiatives to prevent water shortages.