The 2018 Global Water Summit brought leaders from the water industry together in a CEO Forum to discuss their thoughts on major issues facing the industry. The panel was moderated by Verity Mitchell, Director HSBC Global Researchand included Jerson Kelman, CEO SABESP Brazil, Jose Diaz-Caneja, General Director, ACCIONA, Jean-Francios Nogrette, CEO Veolia Water Strategies, Cindy Wallis–Lage, President, Water Business, Black & Veatchand Rafael Perez Feitro, International Operations Director, Aqualia.
While the panel discussed a broad range of topics, common threads wove throughout the discussion as well as the Q&A session. These threads included the need to better understand consumer bias against municipal water, change that bias into trust through transparency and communication, address the real costs of delivering clean water, be resilient and sustainable and demonstrate leadership in unchartered territory. Despite all of these challenges, a sense of purpose and optimism prevailed throughout the session.
A question was asked by Jean-Francios Nogrette, “Would you drink a glass of water from a stranger?” Polling at the summit showed most people would not. Jerson Kelman affirmed this point based on recent research done by SABESP that showed consumers don’t trust municipal water. Almost 50% of consumers surveyed in Sao Paula, Brazil prefer to buy bottled water, even though municipally provided water is completely safe.
Is a well-known brand like Evian needed to make people trust a water provider? Is it necessary for people to understand the processes used to treat municipal water? Would empowering consumers to test water quality make them trust municipal water? Answers to these questions are not yet clear, but one thing is certain. The bottled water market is growing much faster than spending on utility water services.
Building Trust through Transparency
Lack of transparency is at least one underlying issue that leads to consumer distrust of municipal water. So how do municipalities create transparency? “I feel digital could play a key role to establish trust and support the reputation of water.” said Jean Francios Nogrette. Sharing data through digital tools could help both consumers and businesses feel more confident in water quality and reliability.
It’s difficult for anyone to trust what he or she can’t see. As several panelists mentioned, people can’t see infrastructure and therefore have no idea what it takes to bring water to a tap. And while it’s easy to focus on large, headline grabbing new projects like desalination facilities, the real challenge for utilities is to maintain the infrastructure that already exists and bring the benefits of that infrastructure to light in a positive way.
The Need for Communication
Increased communication will be needed. Communication tools such as education, data, social media, and person-to-person conversations with the public are effective. It is critical to employ these tools consistently and authentically, to create transparency and build trust beforea crisis or controversy occurs. As Cindy Wallis–Lage stated, “If you aren’t in the head and in the heart of the public, you are not going to have the trust in the community that is going to believe that you are delivering the quality of water they need to have every day.”
Currently, consumer marketing from bottled water brands is more powerful than utility marketing efforts. As one astute audience member asked, “If two strangers present you with a cup of water, with one person being neatly dressed and the other not, but both cups appear clean, which one will you take?” This example highlights the need for utilities to build consumer trust through branding, the way that consumer water marketers do, and strengthening positive messaging to compete with consumer water brands. Panelists pointed out that this must happen now, when fresh water is the norm, if the broader public is ever going to accept drinking reused water, a likely scenario to come in many parts of the world.
Establishing Realistic Tariffs for Water Services
Lack of infrastructure understanding and the inability to visualize infrastructure make it difficult for people to accept a realistic monetary value for tap water. As Cindy Wallis–Lage pointed out, people aren’t able to see infrastructure improvements like they can see transportation improvements that justify a cost. Although there is fear and political backlash almost certainly associated with raising water rates, there is a general understanding among panel participants that, like reuse water, raising rates will eventually become a necessity.
Building Trust for Public Private Partnerships (PPPs)
Lack of public trust can also be seen in the declining number of water sector PPPs over the last few years, per World Bank data. The problem, according to Rafael Perez Feitro, is not that the private sector does not have interest. It is the result of distrust between the private and public sectors. Distrust prohibits needed funding for investments to upgrade and improve infrastructure. “What we are having is a perfect storm of underinvested infrastructure. The nature of public or private should not matter as long as the service is provided with quality, is affordable, accountable and responsible.” said Rafael Perez Feitro.
Resiliency, Sustainability and Leadership
Communities around the globe need water security that can only be gained through resilient and sustainable water systems. While decisions about planning, investing and maintaining infrastructure have typically been made based on past knowledge and experience, these decisions will now need to be made based on a new and unchartered reality. Holistic thinking will be required. This thinking will require coordination between businesses, industries and communities, regardless of politics and geographic boundaries. Water leaders will need to be bold, transparent, collaborative and communicative. Transformative solutions and unprecedented business models must become the norm. Cindy Wallis–Lage summed up the panel’s sentiments well, “Water is life, but as an industry we need to elevate the conversation beyond entitlement, beyond social good, to the business case for economic development and delivering sustainable communities.”