Ford prepares for a water-scarce future
Helen Keller said, "The only thing worse than being blind is having sight but no vision." Keller may have been blind, but she had an outsized vision for what a better world could look like. An early feminist and human rights advocate, she painted a picture through her writing and speeches of a very different and positive future for women and the poor in early 20th-century America. It was a radical and arguably outlandish vision for its time.
Her words were on my mind Friday during a workshop last week at Ford Motor Company’s headquarters in Dearborn, Mich. Ford brought together some 20 of its executives with some outside stakeholders, kicking off a year-long effort to deepen its water strategy.
We considered scenarios that posed "what if" questions about the future. For instance, what could happen to the safety of our drinking water supplies in a scenario of global economic collapse and low public investment? What could happen to food production patterns and global trade if governments started rationing water allocations for agriculture? And ultimately, how does a company adapt and thrive in that kind of future?
The automotive leader has a strong track record of water use reductions in its manufacturing operations and an aggressive goal to reduce water use even further – by 30 percent per vehicle by 2015. But many at Ford and a number of its stakeholders (including the company’s Ceres stakeholder advisory team) see growing water competition and scarcity as a potential economic game-changer – with big implications for the auto industry.
The reasons might not be obvious at first blush.
"We’re a company headquartered near one of the world’s largest bodies of freshwater – the Great Lakes – so it would be easy for us take the resource for granted," said John Viera, director of Ford’s sustainability group.
But water is critical to a number of manufacturing steps, including vehicle painting, where large volumes of water are traditionally used to rinse cars, ensuring that not a speck of dust ruins that perfect paint job. Water use also can be high in the automotive supply chain, particularly in making raw materials such as steel and aluminum. Ford also has identified that the energy sources used to power its vehicles (gasoline, electric power or biofuels) play an incredibly important role in determining the water footprint of its vehicles, because of the large amounts of water required for fuel production and power generation.
Why use scenarios? For corporate decision-makers seeking to steer their organizations through the straits of extreme uncertainty, seeing around the bend is a much-valued competency. More often then not, they look forward by looking back – relying on life (and organizational) experience as well as sensible forecasts and models that use the past to inform future deployment of time and resources.
But our sensible forecasts and models often put probability-based guardrails on what is "likely." These guardrails become blinders; after all, we are lousy at anticipating low probability wild-card events that can disrupt the global economy (think 9/11 or the Japanese tsunami of 2011).
When it comes to water resources, our reliance on rigid models holds very special risks. We are entering an age of extreme uncertainty about our water resources. Climate change in particular has unhinged the water cycle from predictable averages of precipitation, humidity and temperature, and upended old assumptions about where, when and in what condition water will be accessible. (Note that this spring, unprecedented drought combined with river dredging brought Lake Michigan and Lake Huron to record lows, putting barges that deliver steel to the auto industry at risk from running aground.)
And so water availability has entered the realm of the wildcard.
The Ford workshop was a series of creative, interactive discussions built around four scenarios of global economic growth or collapse, and resource constraints. We embroidered stories about fresh water in its many dimensions: social, economic, political, technological and environmental. Some of our story lines seemed far-fetched, others quite plausible, such as these two:
"Out of concern for the water-requirements of meat-eating, the Chinese government establishes a mandatory ‘one-chicken policy.’"
"Water refugees create new instability and terrorism concerns in the Middle East."
My favorite scenario was called "Full Throttle." (Click on the image at right for the full picture.) In this scenario, the world effectively manages water constraints with well-functioning democracies, the full cost pricing of water and economic growth that reduces income inequality. It is a world characterized by innovation and universal access to clean water, as well as transparency and accountability from the private and public sectors alike. In short, it’s a vision for our world that Helen Keller would be proud of.