The first step they take is available for any company to try out. The World Resources Institute’s (WRI) Aqueduct Tool gives the big picture for any location. (you can try it too<\/a>)<\/p>\n Once AnBev identifies the key problem locations, they take both the regulatory and the geographical risks into account and perform an analysis using a custom-designed assessment tool, taking various stakeholders (like local communities) into account. [3]<\/p>\n 90% of the water used in the production process is at the agriculture stage. [4] Worldwide, the company works directly with their suppliers – barley growers – to start addressing the problem. This part of the supply chain represents more than 1 million hectares of cultivated malt barley area. [5]<\/p>\n Previously, some suppliers were individually improving water efficiency through a variety of innovations. But in a classic example of game theory, no one supplier was willing to share information with no guaranteed benefit to them, whilst providing all the benefit to their fellow suppliers.<\/p>\n This is where the SmartBarley Benchmarking system comes in. The anonymous platform facilitates information flows between over 1,900 growers in nine countries [6][7], allowing them to optimise their production and water usage through benchmarking. They can use each others data to share best practices, the results of trials and new crop technology.<\/p>\n Similar information sharing projects are being implemented across geographies with partners, including an irrigation scheduler program called AgriMet that links local climate station and farmer data to a platform that helps optimise the use of irrigation water for farms. Results show a 9-23% reduction in water use. [8]<\/p>\n The company incentivises employees at all stages of production on certain KPIs. And one of these is to provide new ideas for reductions in water usage, thereby reducing their reliance on water for production.<\/p>\n Monetary rewards and recognition are given, driving innovation and widening the funnel for ideas. As a result, employee engagement programs generated dozens of ideas which resulted in a 3% water reduction in 2014 alone. [9]<\/p>\n Over the last few years, AnBev has reduced the water needed to produce one barrel of beer from 3.5 barrels to an impressive 3.14 barrels, well ahead of schedule \u2013 the goal initially set was 3.2 barrels by 2017. [10] What has it meant? An estimated Savings of nearly 5 million USD in 2014 and more than 12 million USD since 2012. [11]<\/p>\n So what\u2019s next for the team at AB InBev? Greater demand means greater pressure for output, and bigger supply chain challenges. [12]<\/p>\n This is a company that is adapting extraordinarily well to the challenges of climate change. They have embedded water stewardship into their operations (it is incorporated in key metrics within their \u2018Voyager Plant Optimization\u2019 system).<\/p>\n Here\u2019s the takeaway.<\/p>\n In our first month at 性视界 Business School we are given a simple premise. First find your customer promise, then design your operations to fit your promise. AnBev\u2019s customer promise is to be the \u201cBest Beer Company Bringing People Together For a Better World<\/em>\u201d [13] [emphasis author\u2019s own]<\/p>\n This attitude comes through in how they address the problem. By seeing the challenges of water insecurity as an opportunity, that have mobilised their supply chain to perform better. This internalisation of the water concern, is going to allow them to address the challenges to come. The only danger is giving water management too much emphasis \u2013 recent press raises concerns about quality trade-offs. [14]<\/p>\n I leave you with an excerpt from a disclosure AnBev submitted to an independent climate change monitoring agency. The agency asked, \u201cPlease choose the option(s) below that best explains how water has negatively influenced your business strategy\u201d. The answer from AnBev politely questioned the assumption:<\/p>\n \u201cWe have integrated water management strategies throughout our organization and engaged stakeholders locally to improve water management\u2026 We view this as a positive influence on our business strategy<\/span>.\u201d [15]<\/p>\n (Word Count: 790)<\/p>\n References:<\/p>\n [1] Carbon Development Project, \u201cClimate Change 2016 Information Request Anheuser Busch InBev\u201d, https:\/\/www.cdp.net\/sites\/2016\/50\/22350\/Climate%20Change%202016\/Pages\/DisclosureView.asp <\/a>Accessed 3rd<\/sup> November 2016 <\/p>\n","protected":false},"excerpt":{"rendered":" Water risk management creates interesting opportunities for the world\u2019s largest beer manufacturer, as it anticipates the effects of climate change. <\/p>\n","protected":false},"author":2092,"featured_media":11895,"comment_status":"open","ping_status":"closed","template":"","categories":[62,64,1218,427],"class_list":["post-11845","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-ab-inbev","category-beer","category-climate-change","category-water"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\n\n
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\n[2] Carbon Development Project, \u201cWater 2015 Information Request Anheuser Busch InBev\u201d https:\/\/www.cdp.net\/sites\/2015\/50\/22350\/Water%202015\/Pages\/DisclosureView.aspx<\/a> Accessed 3rd<\/sup> November 2016
\n[3] Ibid.
\n[4] Ibid.
\n[5] SmartBarley. \u201cHome\u201d http:\/\/www.smartbarley.com\/<\/a> Accessed 3rd<\/sup> November 2016
\n[6] SmartBarley. \u201cCountry Profiles\u201d http:\/\/www.smartbarley.com\/en\/Country-Profiles.html<\/a>
\n[7] Anheuser-Busch Debuts SmartBarley Benchmarking Program to Generate Higher Yields, Anheuser Busch Press Release. Saint Louis, July 18, 2014
\n[8] SmartBarley. \u201cAgrimet\u201d http:\/\/www.smartbarley.com\/en\/agrimet.html<\/a>
\n[9] Carbon Development Project, \u201cClimate Change 2015 Information Request Anheuser Busch InBev\u201d, https:\/\/www.cdp.net\/sites\/2015\/50\/22350\/Climate%20Change%202015\/Pages\/DisclosureView.asp Accessed 3rd<\/sup> November 2016<\/a>
\n[10] Anheuser-Busch InBev. \u201cCultivating Water Stewardship: Global Citizenship Report\u201d http:\/\/www.ab-inbev.com\/content\/dam\/universaltemplate\/abinbev\/pdf\/sr\/global-citizenship-report\/cultivatingwaterstewardship.pdf<\/a> Accessed 3rd November 2016
\n[11] Carbon Development Project, \u201cClimate Change 2015 Information Request Anheuser Busch InBev\u201d, https:\/\/www.cdp.net\/sites\/2015\/50\/22350\/Climate%20Change%202015\/Pages\/DisclosureView.asp<\/a> Accessed 3rd<\/sup> November 2016
\n[12] Anheuser-Busch InBev NV in Beer, Global Company Profile, Euromonitor,
\n[13] Hirschstein, N., 2015. Corporate Social Responsibility into the 21st century: Brewing a better future?
\n[14] Think Progress. \u201cThree ways climate change is going to ruin your beer\u201d https:\/\/thinkprogress.org\/three-ways-climate-change-is-going-to-ruin-your-beer-bb7bf9977af8#.vu58trd1x<\/a> Accessed 3rd<\/sup> November 2016
\n[15] Carbon Development Project, \u201cWater 2015 Information Request Anheuser Busch InBev\u201d https:\/\/www.cdp.net\/sites\/2015\/50\/22350\/Water%202015\/Pages\/DisclosureView.aspx Accessed 3rd<\/sup> November 2016<\/a><\/p>\n