Where’s Water?

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Kelly Bennett

Kelly Bennett

Co-Founder & CEO

Last month, I had the privilege of participating in the Aspen-Nicholas Water Forum at the Aspen Institute. These dialogues, a partnership between the Aspen Institute and the Nicholas Institute for Energy, Environmental, and Sustainability at Duke University, are a long-running program to advance important conversations about water. The organizers’ ability to curate a diverse, thoughtful group of participants is inspiring, and they never fail to astound me as they navigate a broad spectrum of topics, from data transparency to water affordability to disaster resilience. This year’s topic: Water and ESG: Rhetoric, Reality, and Opportunities. Given B3’s work on Water Sage and the scrutiny facing the oil and gas industry for its water use, I was excited to join. 

The Forum was an intense two-and-a-half day working session, each day starting with breakfast that flowed into guided discussions and often ended with late-night debates over drinks, all centered around ESG and how water fits into it. While I cannot share the names of participants or attribute their comments or positions, they ranged from mining and treatment technology to utilities, federal agencies, investors, lawyers, and nonprofits, among others. The stakeholders presented a wide range of perspectives and levels of engagement with ESG.

As I have processed the Forum’s discussions since September, I thought it would be useful to share some takeaways: 

  • The definitions of what ESG is, what it’s for, and why we care are far from settled, and that has real implications for how policy related to disclosure, safety standards, and how broader environmental policy will evolve. I found myself in what felt like the minority of participants who look at ESG purely as a risk language to measure, disclose/communicate, and ultimately mitigate risk. Many of the participants viewed ESG as a pathway to desired outcomes – a roadmap to impact investment, environmental justice, and socioeconomic equity results. And thus, the much-criticized concept of ‘woke capitalism’ is born, diverting disclosure and corporate governance far from historical financial returns-focused norms. Incidentally, this outcome-focused interpretation of ESG often characterizes the view of public sector, non-profit, and academic stakeholders. These are people who exist within or operate close to regulatory policy circles. The discussion quickly helped me understand how the EPA’s Justice40 (see more) initiative came to be, now shaping flows of tens of billions of federal dollars into projects. For this reason, it drove home the importance of the industry owning its narrative of environmental stewardship and corporate governance, and in all disclosures, helping consumers understand the importance of actions taken by companies and industries to mitigate risk.


  • ESG is here to stay, but its moniker will likely evolve. There was broad consensus that it is important to have disclosures to hold companies accountable (what that accountability is for and to whom remains unsettled), and thus, disclosure is needed. Interestingly, ‘corporate sustainability’ kept popping up as a much-preferred term of art to describe what we often consider ESG. Back to the future, anyone?


  • There is an undeniable desire to engineer specific, highly prescriptive guidelines for corporate responsibility that dictate a company’s operations and many want that mandated by the government. It was perfect timing that as we had this discussion, California passed its first-of-their-kind environmental disclosure laws, teeing up an inevitable conflict about whose standards apply where and to whom. Should these prescriptive operating guidelines come from the United Nations? The US Government? States? Local organizations? Does this regulation focus on ensuring the veracity and quality of disclosure or on using disclosure to develop a mandated corporate operating standard? This discussion is always interesting, largely because most people who desire to use ESG to engineer a prescriptive operating standard also agree that…


  • …global frameworks are limiting and don’t produce useful information for companies, investors, or regulators, but hyper place-based frameworks aren’t scalable. How do we meet in the middle and create enough breathing room for industries to test disclosure approaches, internal data gathering, target setting for risk mitigation, etc? Nascent approaches to science-based targets require collaboration across many different stakeholder groups at a local level. Is industry even invited to sit at the table with counterparts that believe it is there in good faith? I’ll argue that it must muscle its way into a good seat and embrace more transparency, where appropriate, because there are a lot of stakeholders chomping at the bit to dictate how it will invest and operate. And their preferred tool is regulatory mandate (this doesn’t even require democracy – see Justice40, which is part of an executive order).


  • Distrust of the private sector is a pervasive cancer that continues to fester and undermine efforts to increase transparency, collaboration, and advance resource stewardship. The undertones of deep skepticism when discussing private sector motives are constant. Until industry can successfully chip that cynical veneer away, I’m not sure much social license will be obtained. Of course, some of this skepticism is warranted, but one can count many examples of accountability through legal action, penalties, or public outcry for misdeeds, all of which have a cost to industry. There is an overarching narrative that industry has captured regulators, but special interests do not just represent evil capitalists and their greedy desires. I do not see an accountability analog for public agencies, public figures, or even nonprofits that succumb to the pressures of outcome-focused special interests and make horrible policy decisions, sometimes with devastating results.


  • Oil and gas and other water-intensive heavy industries are far ahead of the curve when it comes to addressing water-related business risk and ESG in general. This was the most exciting realization I took away from my days at the Forum. Why do I say this? Whether driven by internal efforts to manage costs and reduce risks or by external pressures, oil and gas and mining have succeeded in defining risks, deploying capital to address them, and reaping the benefits. Recycling produced water in hydraulic fracturing is a prime example. Collaborative work to mitigate seismicity is another. This is important because so much of what is under consideration in other industries still revolves around performative declarations like net-zero water use by whatever year, at least ten years from now. We know from carbon that those targets tend to get fuzzy around the edges quickly.  

I wish we heard more about the very real, tangible risk mitigation happening in the oilfield water lifecycle in forums outside of the industry.  Much of the fault lies with the industry’s inability or disinterest in promoting its accomplishments or finding ways to communicate them to non-engineers. The broad conversation about water resource stewardship has never been as inclusive and we need to claim our rightful place at its center. I think it’s safe to say that we’ve found the water in risk management and stand to help a lot of other industries do the same.

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