Why investing in sustainable water infrastructure makes financial sense

Why investing in sustainable water infrastructure makes financial sense

Water scarcity, flooding and water pollution are posing serious risks to communities and businesses. According to Al Cho, Vice President for Strategy and Business Development at Xylem, many of these problems can be solved with technology that is already available today – and that will actually save money. The challenge, he says, is raising awareness and overcoming inertia. Impeller recently spoke with Cho about the way forward.

What is your role at Xylem?

My role primarily involves working with senior leaders of the company to define the future strategic direction of the company. This includes planning some of the major organic growth initiatives that will fuel the future development of Xylem.

Why is sustainable water infrastructure important to those initiatives?

Our CEO Patrick Decker talks a lot about the themes of water productivity, water quality and water resilience. These concepts are deeply rooted in the idea that we can create significant shareholder value by solving significant stakeholder needs. Our customers need solutions for water scarcity, resilience to floods, and improving the efficiency and productivity of water and wastewater systems. These systems have suffered from underinvestment, and Xylem can make the world’s water infrastructure work more efficiently and more sustainably through the application of innovative technologies and business models.

Is the water industry ready for these kinds of sustainable solutions?

I think there is significant momentum for these solutions. The last couple of years have seen water vault to the top of the policy agenda in many states, countries and regions, because people recognize now that deferring investment in water infrastructure is a short-term fix that leads to long-term problems. As people think about improving water infrastructure, they also realize that adopting the best available technologies can help save a lot of money and also insulate them from risk over the longer term. So people in California, for example, who have suffered billions of dollars in losses because of the drought, start asking questions like, why aren’t we reusing our water resources? As Xylem’s recent public opinion research showed, once they ask that question it becomes clear that solutions like water reuse will actually save customers money over time and make the economy more resilient to water risks.

How do you see your role in helping make this change?

Part of it is about bringing light to issues that people have known about for a long time, but where there has been insufficient political will to really force the issue onto the table. So everyone’s known for a long time that water reuse is a good idea, everyone’s known for a long time that water infrastructure is not very efficient, but the forces for inertia are very strong. So it requires a different level of urgency to be created to change the course in a direction that will disrupt the equilibrium and change the situation. We’re trying to increase broader understanding of the fact that proven solutions are available to problems that people have endured for a long time, and to build the political and the public will to change things.

Can you give some examples of Xylem initiatives in this area?
We know that wastewater infrastructure is inefficient, because we’ve seen our products like Sanitaire, Flygt mixers, and Flygt Experior pumps, generate significant improvements in energy efficiency in almost every application where they’re deployed. And yet we also know that there are a lot of treatment plants and sewer systems around the world that still use outdated technology. So what we did with the Powering the Wastewater Renaissance analysis is to try to put some economic numbers around a situation that we all intuitively knew was a problem. And the findings of that study showed that operators can make significant economic gains as well as environmental gains by adopting readily available technologies.

What is your advice for utilities who want to start making their operations more efficient?

Let’s look at the current cost structure, energy consumption, and identify whether they’re at benchmark or not, and what the best available technologies could do for them. We have a highly fragmented industry, where you have a lot of smaller utilities who are so resource starved that they don’t really have the time, energy or effort to spend a lot of it on scanning the universe for solutions. One of the things we can do is support industry efforts to spread good practices from large utilities to small utilities. I think there is a lot of good that can be created from this kind of experience sharing.

by Simon