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Water Benefit Partners – 2nd Phase Developments SDC 6th Peer Review Meeting

Water Benefit Partners – 2nd Phase Developments SDC 6th Peer Review Meeting D r. Sascha Lafeld, CEO | 06/03/2014 | First Climate Markets AG | Bern, Switzerland. Water Benefit Partners PPP.

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Water Benefit Partners – 2nd Phase Developments SDC 6th Peer Review Meeting

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  1. WaterBenefit Partners – 2nd Phase Developments SDC 6th Peer Review Meeting Dr. Sascha Lafeld, CEO | 06/03/2014 | First Climate Markets AG | Bern, Switzerland

  2. Water Benefit Partners PPP Water Benefit Partners (WBP) is a Public Private Partnership (PPP) that aims to develop an innovative financing mechanism to support additional water projects in regions particularly affected by water related problems – The Water Benefit Certification Scheme. The Water Benefit Certification Scheme (WBCS) is open to qualifying technologies and measures that address locally defined water issues and create verifiable benefits to natural and human environments – so called Water Benefit Certificates. EachWater Benefit Certificate(WBCs) assures a specificvolumeofwaterhasbeensustainablysupplied, purifiedand/orconservedby a project in a specificperiodof time. Wecreate a Water Benefit Certificatemarketplaceforcompaniesandindividualstoallowforcredibleand transparent waterstewardshipengagementbeyondpublicregulation. (voluntarycarbonmarketiscomparable) Water Benefit Certificates Revenue fromWBC sales Corporates/Individuals

  3. PPP Structure & New Partners

  4. PPP Extension Phase Objectives (through 06/15) Threemainobjectivesofthe WBP PPP until 2015 • Transition the administration of the mechanism to an independent entityGold Standard Foundation • Develop Water Benefit Certificate demonstration projectsof different project types in different geographic locations (e.g. Africa, Asia, Latin America) • Further stimulate demand for Water Benefit Certificates (WBCs)through effective marketing and communication efforts

  5. Water TAC Activities WBP-PPP • The Gold Standard Foundation‘s (GSF) Technical Advisory Committee (TAC) held a 3-day workshop in December 2013. Decisionsincluded: • Approvalofthestandardconceptandprocedurelargely in linewithrecommendationsmadeby PPP • Additionatliyfromcarbonworldbroadenedinto „financialneedsassessment“ open tonewcriteriaand positive list • WBC unitdefinitionfixedbased on PPP recommendation • WTAC sub-committeesformedtodevelopmethodologiestobeusedbyfirstdemonstrationprojects • PPP servesas a discussionforumandtheprimarysourceofrecommendationsfor WTAC toconsider Water TAC

  6. Why Do We Need Demonstration Projects? Market Supply Increasingthesupplyof WBCs generatedisnecessarytomeetanticipateddemand in themarketplace. Learning ByDoing Implementingactualprojects will give“meat“ totheexistingstandardframework, andshall also helpitdevelopinto a real, effectivemechanismthroughlessonslearned. Impact Charismaticprojectsshalldemonstratethat, usingourmechanism, projectscandeliver real, sustainablewaterbenefitswhileimprovingthelivesofparticipants. Flexibility Project diversity, based on project type andgeographicallocation, shalldemonstratethatthestandardcanbeapplidto a widevarietyofwaterissuesandlocales. First Climate receivedmorethan 40 projectproposals so far!

  7. Two Demonstration Project Examples WaterHealthIndia SustainableSugarcane Initiative Allows Indian farmerstomeetrisingdomesticdemandforsugarwithlesswater. A set of cultivation practices specific to sugarcane that increases yields and reduces water footprint Involves direct planting of seedlings, optimized cropping patterns and an optional use of drip irrigation Gives underserved communities rapid access to safe water for a nominal users fee, addressing waterborne diseases. Water treated to WHO standards in 6 stage process. Single facility takes less than a month to build and lasts for at least 10 years with an initial investment of around $25.000

  8. Forecastingthe Market for WBCs • A functioningmarketfor WBCs does not yetexist, howeverthevoluntarycarbonmarketgivesus a strong corollary • Characterizedbysteadygrowthsince2006 • Market value of $523 million • 90% of offset volumes were contracted by the private sector • Natural marketforbuyerswith a high exposuretowaterrisk Historical Offset Demand by Transacted Volume, All Voluntary Carbon Markets

  9. Motivationsof Potential WBC Buyers • Buyersfacingindirectwaterrisksthroughtheirbusinessoperations • Service providers, e.g. financialinstitutions, that do not have a large directwaterfootprint, but that still have a businessinterest in addressingwaterrisk • Buyersforwhomwaterbecomes a limitingfactor in theirproductionprocessesandsupplychains • Buyersthatalready do a great deal toaddresstheirdirectwaterfootprint, andneed/wanttodemonstratetheircommitmenttowaterstewardship

  10. Emerging Water Strategies – “Water Neutrality“ Part of Sainsbury’s 2020 sustainability strategy involves piloting “water neutral” stores in Weymouth and Lancaster • Water neutrality at these facilities involves: • Rainwater harvesting • Waterefficiencymeasures on-site (low-flushtoilets, low-flow taps, etc.) • Water effficiency measures beyond own operations in the local community • However, waterneutralityremainscontroversial: • Most embeddedwateriscontained in theproductsthemselvesandsupplychainwateruse • Somewaterefficiencymeasuresactuallyincreasecarbonfootprint (e.g. purification) • Noconsensus on whatthistermmeans

  11. Emerging Water Strategies – “Water Replenishment“ Coca Cola aspires to replenish their water footprint by 2020 • Coca Cola takes a broader approach to water replenishment including: • Increasing efficiency of direct operations • Recycling remaining used water • Replenishing water used through external water projects(e.g. WaterHealth)

  12. Emerging Water Strategies – “Water Positive“ Water Positive is defined by IKEA as – “…the overall water credit from all water impact activities along the entire value chain is greater than the water debit.” IKEA aims to become “water positive” by 2020, including measures to balance its water footprint and contribute to the increased availability of clean water in the communities where it operates. External initiatives involve offering “solutions and knowledge to stimulate customers to save, reuse and recycle water.”

  13. Emerging Water Strategies – “Water Stewardship“ H&M does not aim for “water neutrality” or “net positive impact” but rather frames its basket of initiatives under “water stewardship” • PioneeringWaterStewardshipis a 10 yearwaterpartnershipwith initiatives including: • WaterAid • Better Cotton Initiative • WaterEfficientDenim • Zero DischargeofHazardous Chemicals • CEO Water Mandate • Mill Development Programme 25% of sale prices of swim wear products are donated to WaterAid, which fund access and sanitation projects in Bangladesh, India, Pakistan and Ethiopia.

  14. Sascha Lafeld PPP Coordinator First Climate Markets AG Industriestraße 10 Phone: +49 (0)6101 55658-11 61118 Bad Vilbel/Frankfurt Fax: +49 (0)6101 55658-77 Germany www.firstclimate.com

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