The business of water entious political issue and a hot issue for business ethics. Water is considered a basic human need, and so access to clean water is typically considered to be a fundamental human right. However, although it appears to be abundant, humans can actually only use 1% of global water resources for drinking. While most developed countries have decent access, one in nine people worldwide do not have access to clean drinking water in total around 783 million people. Every minute, a newborn infant dies from infection caused by a lack of safe water and an unclean environment. To meet the UN Sustainable Development Goals, universal and equitable access to safe and affordable drinking water and adequate sanitation and hygiene needs to be achieved, by 2030, as well as increased water efficiency and reduced water pollution
With an issue this contentious, it is no surprise that water has also increasingly become an ethical issue for business. Business is deeply involved in the world of water, either on the supply side as a provider of safe drinking water and sanitation, or on the demand side as a major user of water as a raw material, or as a product to sell.
Privatising water utilities
On the supply side, we have seen a marked increase in privatization of water utilities over the last 30 years. The global market here is dominated by a handful of key players, such as Suez, Nalco Water and American Water, who have become increasingly involved in the water business in developing countries. The privatization of water supply, however, has become an ever more heated issue. There are, of course, often good grounds for privatization: municipal water companies have often proved to be inefficient and overly bureaucratic, if not outright corrupt and even failing, as has sometimes been the case in developing countries. Bringing in the private sector, so the argument goes, can increase efficiency, improve service levels, and even help to address poor access to water in the developing world.
The main ethical concerns faced by companies such as Nestlé in the marketing of bottled water centre around issues of wastefulness (it currently takes approximately three litres of water to produce one litre of bottled water), packaging, transport costs, the exploitation of non-renewable aquifers (such as the water from the Fiji Islands), and, more generally, the fact that in most developed countries where bottled water is sold, tap water is a perfectly healthy and adequate alternative. Nestlé’s contention that ‘bottled water is the most environmentally responsible consumer product in the world’! Further embarrassments ensued for the company in 2008 when a Swiss television station revealed that Nestlé had hired a security firm to spy on the NGO ATTAC, with a particular focus on a Brazilian activist who had targeted the company’s bottled water operations in Brazil.
- Who are the main stakeholders of beverage company Coca-Cola in this case and explain why they are?
- Name the Stakeholders in the case study and describe how would you prioritise the importance of the Stakeholders.
- Describe and assess the role of Nestlé in this case in terms of CSR.
- Critically assess Nestlé’s contention that ‘bottled water is the most environmentally responsible consumer product in the world’!
- Think of the privatized water companies in this case in terms of the ‘extended view of corporate citizenship’. What are the specific governmental roles they have taken on?
- How do you evaluate the growing expectations and the changing role of companies in the arena of water management?
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