by Beth Gray

In the most recent issue of McKinsey & Company’s publication, McKinsey Quarterly, the editors explore the looming issue of water scarcity through a special report and two interviews with leaders of two companies, Nestle and Rio Tinto, who are taking the problem very seriously as they formulate their business plans for the coming years.

In “The Business Opportunity in Water Conservation,” Giulio Boccaletti, Merle Grobbel, and Martin R. Stuchtey explore methods for turning water scarcity into business opportunity.  The authors point out that the issue of water scarcity has come to such a crisis level that in 2004, for example, Pepsi Bottling and Coca-Cola “closed down plants in India that local farmers and urban interests believed were competing with them for water.”  Global companies are finding that they are increasingly unable to operate in areas where water is particularly scarce – as is seen in the example above.  When such companies are able to continue operations in areas of the world in which water is scarce, they must often take significant (and often expensive) measures to ensure that any waste water runoff will not contaminate scarce drinking supplies for local communities. 

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