Doug Baker's Presentation from the 2014 Minnesota AgriGrowth Council Annual Meeting and Conference

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NAVIGATING OUR WATER FUTURE

DOUG BAKER, CHAIRMAN AND CEO

ECOLAB

Minnesota Agri-Growth CouncilNovember 6, 2014

THANK YOU

MINNESOTA AGRI-GROWTH COUNCIL

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Don’t Look at the Waves, Look for the Current

WATER3

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MACRO TRENDS

Aging Population

Water Shortage

Energy Demand

Nature

Increasing middle class globally

Technology

Aging population in EMEA, Japan, and China will drive healthcare

Meal prep away from home continues in emerging markets driving foodservice growth

Food production accounts for nearly 75% of water consumption Demand for energy requires more geographically and technically

challenging sources, which are more difficult to reach and treat as well as more water intensive

Water scarcity is expected to be a dominant issue, particularly in high growth emerging market economies

Evolution presents new food safety and infection challenges Science & technology enables broader set of product and

process improvements

Population Growth

Diet Shifts

More people: +50% by 2050. Most growth in emerging markets Diets move from grains to proteins in emerging markets Population growth plus diet shift means 75-100% more calories

needed to feed the world

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FOOD-ENERGY-WATER NEXUS

ENERGY FOOD

WATER

EMBEDDED WATER IN EVERYDAY PRODUCTS

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167 Gallons of Water

=

55 Gallons of Water =

=




200 Gallons of Water

BY 2030…

The world will need:30% more water40% more energy50% more food

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The global water industry is estimated at $483 billion and growing several percentage points a year, according to Global Water Intelligence.

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AGRICULTURE IS THE LARGEST FRESH WATER CONSUMER

Source: World Water Assessment Programme

70%Agriculture

20%Industry

10%Domestic

Minnesota exports more than $8 billion of ag products per year

“THERE IS NO NEW WATER. ALL WE HAVE IS HERE.”

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- National Geographic

WATER INVENTORY11

Fresh Water Inventory

Fresh Water Total Water

Glaciers/ice caps 68.6% 1.72%

Groundwater 30.1% 0.75%

Lakes, rivers, ice/snow 1.3% .03%

97.5%Salt Water

2.5%Fresh Water

WATER INVENTORY12

Fresh Water Inventory

Fresh Water Total Water

Glaciers/ice caps 68.6% 1.72%

Groundwater 30.1% 0.75%

Lakes, rivers, ice/snow 1.3% .03%

97.5%Salt Water

2.5%Fresh Water

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FRESH WATER SUPPLIES

Water scarcity among the top four risks to society – WEF Global Risk Survey

World Bank predicts that by 2025, water demand will exceed supply by 50%

Challenges differ watershed to watershed

Food, water and energy are all connected

If You Think the Water Crisis

Can't Get Worse, Wait Until the Aquifers

Are Drained

Southwest braces as Lake Mead water levels drop

WATER CRISIS MAKING INTERNATIONAL HEADLINES

Sao Paulo Told to Cut Water

or Risk Running Out in 100 Days

Nestlé warns water scarcity ‘more urgent’ than climate change

MAJOR WATER SCARCITY THREAT LOOMS OVER INDIACalifornia Drought Squeezes WellsState Considers Regulating Groundwater Use for First Time

Water shortage shuts Coca-Cola plant in India

Water woes force big brewers to tighten the tap

THIRSTY FOR

INVESTMENTS IN WATER

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94% face potential physical challenges

69% face reputational risks

58% face regulatory risks

80% say it will affect their decisions on where to locate facilities

60% indicate water will affect business growth and profitability within five years

1 Bridging Concern with Action: Are US Companies Prepared for Looming Water Challenges?, Pacific Institute and VOX Global 2014 survey of US-based Fortune 500 companies

US COMPANIES FACE INCREASING WATER-RELATED RISKS

Whole Foods Labelling at 390 Stores

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+=

ECOLAB: UNIQUELY POSITIONED TO DELIVER WHAT MATTERS MOST

SAFEFOOD

CLEANWATER

ABUNDANTENERGY

HEALTHYENVIRONMENTS

PEOPLE, SERVICE & INNOVATION

ASSOCIATES

SERVING MORE THAN 1 MILLION CUSTOMER LOCATIONS IN 171 COUNTRIES

1,600 Scientists 6,700 Patents

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45,000LARGEST &BEST TRAINED FIELD TEAM

25,000$13 BILLION ANNUAL SALES

SERVING THE WORLD’S MOST WATER INTENSIVE INDUSTRIES

ECOLAB MODEL DRIVES INSIGHTS21

Shared Operating Principles

Shared Technology

Shared Model

Foodservice/Hospitality

Food & Beverage

Processing

Healthcare/Infection

Prevention

Industrial Water Services

EnergyServices

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Campinas

Aberdeen

Calgary

Singapore

Bangkok

Leiden

Alpharetta

Tokyo

Monterrey

Sydney

Global Technical Reach

North America

Europe & MEA

Latin America

Asia Pacific

Delden

GreensboroNaperville

Houston

Eagan

Shanghai

Monheim

Global Innovation Centers

Pune

EIGHT DECADESOF TRUSTED PARTNERSHIPS

BRANDS WITH WATER REDUCTION GOALS

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Renewing efforts to decrease water consumption by 20% by 2015, compared to 2008 baseline.

Intends to cut water use per pound of product by 15% by 2015, compared

to a 2008 baseline.

Aims to reduce direct water withdrawal per ton of product by 40% by 2015, compared to 2005

baseline.

Goal to reduce water use by 10% by 2020.

2015 goal to improve freshwater efficiency by 5%

Lower daily water consumption by more than 4% each year, compared to 2013 baseline.

Goal to reduce water use by 10% by 2017, compared to 2012 baseline.

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Ecolab solutions save customer significant water in its operations.

Across the enterprise, 3D TRASAR™ technologies and water reuse projects will save:

• 228 million gallons of water per year • $834K

Food Manufacturer

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Ecolab saves water and energy at an ice cream plant.

*Based on average daily water use estimated by the American Water Works Association.

Boiler management solution saves:• 11 million gallons of water• $67K on water and energy

That’s 14,000 MM BTUs in energy and enough water for the daily use of more than 158K people.*

Ice Cream Plant

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Cleaning program saved food processor energy and increased production time.

Advantis™ FC Boiler provides lower-temperature cleaning process, excellent cleaning results, operational efficiencies and sustainability benefits

• Refrigeration savings of 17,000 kWh• Water heating savings of 957 MM

BTUs and $22K

Food Processor

PROGRESS…BUT NOT ENOUGH, AND NOT FAST ENOUGH

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BIG BANG CATALYST

Regulation

Market Pricing

DRIVE INNOVATION

DRIVE CONSERVATION

PRICE OF WATER: INVERSE TO RISKS

Source: Fortune Magazine

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ASSIGN A VALUE TO WATER

Progressive companies are:

Recognizing that the water bill does not reflect the true value of water.

Assigning values that reflect the real importance of water to their ability to do business

Analogy: valuing water as we value the cost of capital for an acquisition

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INTRODUCING A NEW WAY TO FACTOR WATER RISKS INTO BUSINESS DECISIONS

Partnership with Trucost, the Natural Capital Experts

First-of-its-kind tool launched this week

Web-based, easy to use online tool

Provides site-specific, actionable information

Available to all at no cost

Scientific model developed by Trucost

Draws upon multiple information sources

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MEASURING PROGRESS

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OUR INTERNAL STEPS

Working to understand our risks by site

Incorporating water picture in our site selection criteria

Increasing water reduction goals, implementing first where it matters most

Driving technology options to reduce water pressure

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"The frog does not drink up the pond in which he lives.“

- American Indian Saying

Doug Baker's Presentation from the 2014 Minnesota AgriGrowth Council Annual Meeting and Conference

Government & Nonprofit

Transcript of Doug Baker's Presentation from the 2014 Minnesota AgriGrowth Council Annual Meeting and Conference