Can a Start-Up Help Companies Monitor and Manage Their Water Use?

This article is part of Upstart, a series about companies harnessing new science and technology to solve challenges in their industries.

Drought, drought, everywhere and not a drop to drink, to misquote the Ancient Mariner. It has become increasingly clear that the world is running short of fresh water.

Yet, while there are many companies addressing carbon — the main culprit in climate change — few focus on water, and more specifically how corporations should be monitoring and controlling their use of it.

“Water is at the center of the climate crisis,” said José Ignacio Galindo, who helped found Waterplan, a company that helps corporations understand and manage water security. “Climate change is the problem and water is the messenger.”

Waterplan’s software platform integrates public watershed data and customer water use data to help companies in water-intensive industries make sure that their current or future operations are not affected by drought. And, perhaps more important, it helps companies monitor and replenish the watersheds and aquifers on which we all depend. (Waterplan charges an annual software license fee per site, but declined to give specifics on the fee range.)

Mr. Galindo and one of his co-founders, Nicolas Wertheimer, met at the Argentine hub of the World Economic Forum’s Global Shapers program, which brings together young people from different backgrounds to work on social and environmental projects. Mr. Wertheimer had already been working in water stewardship, and Mr. Galindo was a software engineer. They saw that there was a lot of innovation in carbon accounting but not much similar work with water.

In December 2020, they hired developers to work on a software platform that would integrate regional water data for industrial use. They joined the famous Y Combinator start-up accelerator in the summer of 2021, as one of the program’s first water-focused climate start-ups.

Their timing couldn’t have been better. Asia and Africa, no strangers to drought, were facing their worst water shortages in decades. In the United States, a swath of land from California to Texas was facing its worst drought in 1,200 years. In Europe, some rivers were so low that so-called hunger stones — river rocks that only appear during severe droughts — began appearing above the water line. The oldest, in the Elbe River in the Czech Republic, is believed to have been inscribed in 1616. It reads, “If you see me, then weep.”

The Y Combinator stint drew investors — including Richard Branson’s family and Leonardo DiCaprio — allowing Mr. Galindo and his co-founders to attract and hire Nick Silverman, a hydrologist at the University of Montana, as their head of science. Waterplan currently has more than 30 customers, including Coca-Cola, Amazon and Anheuser-Busch InBev, the world’s largest brewer. Waterplan currently operates in more than 100 watersheds globally and is increasing the number of water basins that it monitors.

“The challenge for individuals, communities and companies is to make long-term sustainable decisions about a natural resource so critical to life, yet so complex in movement and form,” Dr. Silverman said.

Eventually, the information that Waterplan’s platform provides will be required by governments, as regulators around the world begin implementing climate- and nature-related disclosure protocols. Similar protocols, established by the Task Force on Climate-Related Financial Disclosures, are already mandatory in Britain, the European Union, Switzerland, Brazil, Hong Kong, Japan, New Zealand and Singapore. And the U.S. Securities and Exchange Commission has proposed climate-risk disclosure rules that could go into effect by the end of the year.

Companies that disclose those risks benefit from a lower cost of capital compared with companies that don’t disclose, according to Cate Lamb, global director of water security at CDP, an international nonprofit organization that distributes an annual water-use questionnaire to more than 6,000 companies worldwide.

Climate change is not the only driver of water risk. Overconsumption, pollution and misallocation of finite resources also contribute. “Unlike fossil fuels, for which we have alternatives, there is no alternative to fresh water,” said Ms. Lamb. “And yet we are running out of it.”

In 2020, Chile ordered a Canadian mining company, Barrick, to close the Chilean portion of its $8.5 billion Pascua Lama gold and copper mine because of concerns that it would overconsume and pollute water used by local populations.

Waterplan hopes that its platform will eventually provide all water data necessary to satisfy the various existing and coming regulations.

Cameron H. McLain, co-founder and managing partner of Giant Ventures, one of Waterplan’s primary investors, believes water security will become an increasingly important topic in the next decade.

Once floods and fires are over, people forget about the risk, he said, but losing access to water is something no one can ignore. “It really does focus people’s minds more intensely around climate change,” Mr. McLain said.

Waterplan’s software combines companies’ operational data with local watershed data, satellite imagery and hydrologic modeling to provide a near real-time financial assessment of a facility’s risk of disruption or closure because of water. Users get this information by subscribing to a web-based dashboard that provides constantly updated insights, risks, targets and opportunities.

Based on the data, the dashboard suggests tailored actions like installing conventional water efficiency technologies and creating nature-based solutions such as wetlands. Waterplan then monitors the results of any mediation activities though its software.

Waterplan “can determine how much water might be available in an area and predict what might happen to it and monitor it on a relatively real-time basis,” said David Singer, who was a top executive at one of the largest U.S. Coca-Cola bottling companies and has acted as an informal adviser to Waterplan. While he questioned the frequency of updates of the water data, he does not doubt the data’s value or that disruptions are becoming more frequent. “Droughts and heavy rainfalls affect regional watersheds more quickly than many people realize,” Mr. Singer said.

Among Waterplan’s first customers was McCain, one of the world’s largest potato producers and a frozen French fry supplier to McDonald’s. McCain is committed to reducing its water consumption by 15 percent in the next three years, according to Sabiene Lima, the company’s sustainability manager for Latin America. McCain is using Waterplan’s scenario modeling to understand different water risks around its farms and facilities in Argentina.

Another client is Amazon Web Services. Will Hewes, its global head of water sustainability, said of Waterplan: “They’ve got tools that help us on that water risk assessment side. What are the key issues in that basin? Who should we be engaging with? How should we be thinking about the water challenges?” He added, “It really aligns well with what we do,” citing a watershed restoration project in Brazil.

For clients that want to recharge the aquifers from which they draw, Waterplan analyzes the vegetation, or lack thereof, covering an area and uses precipitation and temperature data to estimate how much water is infiltrating groundwater month over month.

“We cannot know exactly how much water is in an aquifer, but we can measure the variations over time,” said Jay Famiglietti, a hydrologist and former senior water scientist at NASA.

A reduction in groundwater infiltration can cause the water table to drop, but it can also cause water quality to decline. Waterplan says that in dire cases it has been able to forecast when a client’s facility will run out of quality water.

“There’s no way anywhere on the planet to escape global change,” said Dr. Famiglietti, who lives in Canada, which is warming at two to three times the rate of the rest of the planet, according to a 2019 report by the Canadian government.

Still, many water-stressed municipalities continue to attract water-intensive industries, often by promising that they have plenty of water. Dr. Famiglietti says he cringes when he hears such pitches, adding that politicians focused on short election cycles don’t necessarily understand that they are giving away the future.

“If you tell everybody you have hundreds of years’ worth of water and everybody comes and drills wells, suddenly you’ve only got 50 years’ worth of water,” he said.

Companies also risk creating the perception that they are leaving nearby communities without enough clean water. Waterplan helps clients understand how much water they have, how much they need and how those variables are changing over time. Companies can then invest in regenerative activities, such as reforestation and wetland conservation, which can have a huge impact on recharging aquifers.

Increasingly, companies are turning to so-called nature-based solutions to give water back to an area from which they are drawing. They might use harvested rainwater, air-cooling condensate and reclaimed wastewater while returning any water drawn from rivers, reservoirs or wells to their sources.

As drought reduces surface water and the water table drops, companies dig deeper to find water. But deeper wells go further back into geologic history, drawing water that was put there thousands, if not millions, of years ago. Aquifers closer to the surface can be replenished by rainfall, but deeper aquifers with so-called fossil water will take thousands of years to refill.

“We need to adapt quickly,” Mr. Galindo warned. “Freshwater challenges are accelerating faster than most people realize.”