CEO Water Mandate and Collective Action Jason Morrison International Waters Conference 7 Bridgetown, Barbados October 30, 2013

CEO Water Mandate Overview Launched in 2007 in a partnership between companies and the UN Global Compact, the CEO Water Mandate is a business initiative dedicated to advancing corporate water stewardship. Function 1.The Mandate constitutes a call-to-action and forum for companies to improve their water stewardship practices 2.It also provides a strategic framework, research, guidance, and tools designed to help guide this process

Direct Operations: water-use assessments; targets for conservation and waste-water, etc. Direct Operations: water-use assessments; targets for conservation and waste-water, etc. Supply Chain and Watershed Management: supplier sustainability strategies; assess and respond to watershed risk, etc. Supply Chain and Watershed Management: supplier sustainability strategies; assess and respond to watershed risk, etc. Collective Action: civil society, governments, UN, other water initiatives, etc. Collective Action: civil society, governments, UN, other water initiatives, etc. Public Policy: inputs to public-policy making; advocacy on water sustainability, etc. Public Policy: inputs to public-policy making; advocacy on water sustainability, etc. Community Engagement: support local groups; water education; infrastructure, etc. Community Engagement: support local groups; water education; infrastructure, etc. Transparency: report on implementation and progress Transparency: report on implementation and progress Commitment Areas

Sectors Represented Apparel Agri-Business Beverage ChemicalsConstructionConsumer Products Cosmetics Energy Engineering FinanceFood Footwear Forest Products PharmaPublishing Mining-Metals Water Services Water Technologies

Source: World Economic Forum 2012 Societal Risks by Severity and Likelihood

Water Risk and the External Engagement Imperative Company - Water use efficiency - Wastewater treatment - Compliance - Impacts on communities and ecosystems Basin / Watershed - Water stress - Water pollution - Inadequate infrastructure - Lack of government capacity - Climate change - Lack of community access to safe drinking water Often, the greatest risks come from conditions over which the company has the least influence

Business Case: Internal versus External Action

Shared Water Challenges and Collective Action Shared risk creates a strong driver for collective action among companies and others to advance sustainable water management

Collective Action Preparation and Implementation ELEMENT 4: Designing Collective Action Engagement ELEMENT 3: Selecting a Collective Action Level of Engagement ELEMENT 1: Scoping Water Challenges and Action Areas ELEMENT 2: Identifying and Characterizing Prospective Participants ELEMENT 5: Structuring and Managing Collective Action

Characterizing Water-Related Challenges, Causes, and Risks

Collective Action Areas and the Water Action Hub Efficient Water Use Effluent Management, Wastewater Reclamation, Reuse Community-Level Access to Safe Water, Sanitation, and Hygiene Storm Water Management and Flood Control Infrastructure Finance, Development, Operation, or Maintenance Sustainable Agriculture Climate Change Adaptation and Resilience Ecosystem, Source Water Protection, Restoration Monitoring and Knowledge Sharing Engaging in Participatory Platforms Public Awareness and Education Improved Water Governance, Policy Development, and Implementation

Inadequate Infrastructure System Poor Catchment Governance Ineffective Water Management Water Over- Allocation Water Supply Unreliable Water Quality Deterioration Flood Damage Ecosystem Degradation Efficient Water Use Effluent Management/ Wastewater Reclamation/Reuse Community Level Access to Safe Water, Sanitation, and Hygiene (WASH) Storm Water Management and Flood Control Infrastructure Finance, Development, Operation, or Maintenance Sustainable Agriculture Climate Change Adaptation and Resilience Ecosystem/Source Water Protection/Restoration Monitoring and Knowledge Sharing Engaging in Participatory Platforms Public Awareness and Education Improved Water Governance and Policy Development Connecting Actions to Underlying Causes

Sasol-Emfuleni Partnership Model Emfuleni water conservation project Emfuleni Municipality Sasol (Private sector ) GIZ Development funding Community Savings from reduced losses Funding from ring- fenced savings Seed funding Reduced risk Influencing public policy Seed funding, governance, auditing role Job creation and improved service delivery Emfuleni & GIZ/Sasol partnership agreement (MoU) GIZ/Sasol Development partnership ORASECOM

14 Agriculture represents 70% of global water withdrawal; we are engaged in water conservation measures across our business Traditional Flood Irrigation Pivot Irrigation Drip Irrigation The potential “prize” is a water savings of nearly 0.25 billion liters/year Direct Seeding ( DSR) Traditional In 2009, PepsiCo applied DSR & saved Over 5.5 Billion liters water China Company Farms India Community Farms 30% Water 70% GHG 30-50% Up to 70%

15 Looking ahead, protection and restoration of watersheds where we do business is the umbrella under which much of our long-term, water-related risk will be mitigated in our direct operations, supply chain, and community. Positive Water Balance employs a simple “credit/debit” model to water use and replenishment. The performance of the India business was assured externally by Deloitte in 2009 and …and we are expanding beyond direct operations to watershed interventions

Jason Morrison Technical Director, CEO Water Mandate Learn more about the CEO Water Mandate and sign up for our mailing list at: