The ongoing acceleration in the rate of urbanisation is a huge challenge, particularly also related to water. This week I am participating in the 2016 Singapore World Cities Summit (WCS) and the Singapore International Water Week (SIWW) looking into this and other issues. On Sunday, July 10, I had the honour to speak to the WCS Young Leaders Summit, a select group of young change-makers from diverse sectors who shape the global urban agenda.
In preparation of the meeting the following seven questions were raised:
- Mr Brabeck, Nestlé is a global company that has operated in more than 197 countries for 150 years. Can you share with us some trends that you see across cities and their approaches to managing environmental issues?
- What has your experience as a global business been like, when dealing with city and national governments?
- How has Nestlé, a global business adapted its global operations to stay true to its values at the same time that it has to co-exist with diversity in the world?
- You are known to be a strong advocate for water management. Some cities may lose sight of the environmental impact of high levels of water usage.
- On food supply security: What role do you see cities playing in dealing with food security issues?
- What business opportunities do you see in the environmental issues of our day?
- To what extent can businesses shape the focus of governments? What can governments learn from businesses about monitoring ground sentiments, market feedback, etc.?
Here are some elements of my responses. Needless to say that adequate answers to these profound questions would require much more differentiation than what is possible in an hour of discussion, and, for that matter, in a blog. So, it is first ideas and aspects only. The numbers at the beginning of paragraphs, by the way, refer to the questions above.
1. There has been significant improvement in the environmental quality of cities, as cities and prosperity grow. Let me illustrate my point with the probably biggest environmental disaster in a city since World War II. It is not an event in emerging economies, but in London, where 12,000 people died in the Great Smog of December 1952. Nothing in this order of magnitude is known to have happened after the Great Smog as a result of air pollution, neither in London nor elsewhere. As shown in an earlier post, improvements come with prosperity.
Big challenges remain, as many emerging economies are quickly catching up with urbanisation: the next four decades will see an additional 70 million city dwellers year on year.
This is 40% more than the annual addition in the four decades before. Important: focus not exclusively on megacities, cities 1-5 million twice as important in total number of inhabitants.
2. and 3. This ongoing acceleration in the rate of urbanisation is a huge challenge, but, as many other challenges, this also means opportunity. A few years ago (2012) I organised a breakfast discussion on urbanisation at the World Economic Forum in Davos. One of the main points of outcome was the common understanding that cities are nodes of new ideas, communication and innovation. Where there are issues, cities will generate ideas and solutions, and, further accelerated by new technologies, cities are the places where innovations quickly spread out. This is further accentuated by the much higher share – compared to country averages – of people between 15 and 35 years of age.
By the way I have the same concept for Nestlé, implemented in the Strategic Transformation some 10 years ago. Like cities, the company is a combination of nodes of new ideas, communication and innovation (research, exchange of new ideas and best practice in production, logistics and marketing, etc.). But as a global company, these nodes are for a global network!
Therefore, a company such as Nestlé and cities are complementary within the same basic orientation and, as a consequence, natural partners – and we are indeed received and appreciated by city authorities and inhabitants as partners wherever we invest.
4. and 5. But let me come back to water. It is fascinating that this Singapore event combines cities and water – and it is no doubt an opportunity to take a look at the success story of water management in this city state.
As I was also asked to say something about food security, I did it by broadening my view on water.
Let me outline this step by step.
The buildings of a city of ten million cover quite a surface, in the case of Seoul it is the equivalent of a circle with a radius of 14 kilometres, in the case of Kinshasa with less high-rise buildings a radius of 19 kilometres.
The water requirements for municipal supply are such that this metropolitan surface, as big as it is, will not be enough to ensure full recharge by precipitation. This is only possible with a second circle of some 100-150 kilometres, where all water is available for this city. Cities like Singapore have found a way to reduce this circle significantly through a very high percentage of used water recycling. Others, such as Jakarta and New Orleans for instance, pump up from their underground aquifers without consideration of recharge. The result is subsidence, i.e., these cities sink with rate up to 50 centimetres per year. Needless to say that this increases the risk of flooding, much more, for instance, than climate change.
But there is another circle, i.e., the water needed to grow the food to feed the city and to generate the energy required. Just to provide an order of magnitude: while we use some 100-200 litres of tap water per capita per day, we eat between 3000 and 6000 litres embedded in food. With this you get to a circle with a radius of up to 500 kilometres exclusively at the service of a city of some 10 million inhabitants.
6. How can a company such as Nestlé contribute to addressing these issues, contribute to increasing both food and water security?
One first aspect; transportation of food for big cities goes over ever longer distances. A farmer with his tractor and a load of organic vegetables will less and less be able to do this, a modern food industry and retail distribution become essential.
And there are many ways to save water embedded in the food products; let me mention just two of them. The first and probably most important one is reducing waste on the way from farm to fork. The second one is reducing waste in the households, e.g., to take a look into a possible future and urban innovation, as one aspect of personalised nutrition, with just-in-time delivery thanks to fully networked consumers, kitchens and refrigerators of urban households.
7. Finally, what can international companies such as Nestlé do with respect to politics? As responsible corporate citizens we are also part of the public policy dialogue. We do not think we can and should give advice to governments on how they should do their job. But we can express concerns, we can talk about good practice observed in other countries and contribute to solutions with our own action. Nestlé’s and my own involvement in the discussion about and action against water overuse illustrates this, I think, quite well.
As ever, I would welcome comments from participants in the two important Singapore events, and, needless to say, from all the other readers of my blog, too.