The E in ESG is Environment, not just Energy
It is important that we look at our impacts for Energy and Emissions, but an effective ESG program also includes a strategy around Water Conservation
We spend a lot of time talking about energy. So much so that some may think the E in ESG actually stands for Energy. But we must not discount the impact of water, and an effective ESG program addresses both. Water impacts nearly every element of our lives - likely far more than you might realize. Not only is it a fundamental requirement for the food we eat and the water we drink, but it is used through the industrial process to create material goods and is an essential component in most energy generation as well. In fact, there is very little that water does not touch.
How many Google searches did you do today? Every single Google search requires about half a milliliter of water in energy alone. Another 4.5 milliliters of water is also needed to cool the data centers that house the search engine. With over 300 million searches worldwide, just the simple act of a google search accounts for nearly 200,000 thousand gallons (750 thousand liters) of water daily. This doesn’t even account for the water used to manufacture the servers for our upstream energy generation. (If you want to go down the interesting rabbit hole that is Google’s water use, here are a couple of links to get you started: link, link2).
I think you get the picture - water integration is pervasive in nearly everything in our lives. Water also has a carbon impact as well. While we rightfully focus on the 39% of emissions that result from the built environment, 5% of all US carbon emissions are attributed to the energy required to move, treat, and use water in the US (source).
As if the impact of water itself was not enough, we haven’t even touched the issue around the aging infrastructure that supports much of water delivery and removal within the built environment. Just like within a neglected property, failure to keep up with the repair and maintenance of the infrastructure has led to delivery issues and failures across the United States.
As you read this article, this is occurring in real time in Jackson, Mississippi. If you are not aware, like many cities, Jackson has historically neglected the repair and maintenance of its aging water infrastructure. In 2010, a winter storm resulted in several water main breaks and widespread outages. In 2012, the EPA cited Safe Drinking Water Act violations and forced the city to make some repairs. From 2017 to 2021, the city averaged 55 breaks per 100 miles of the water line (the safe limit is 15). In 2021, yet another winter storm left some residents without water for over a month. Despite repeated issues, the city and state continued to delay much-needed improvements.
From July to August 2022, the Mississippi River basin experienced heavy rains and several floods. These storms resulted in record-breaking rainfall amounts far exceeding what the water drainage system could handle. While many areas across the midwest and south were impacted, specifically in Jackson, this flooding led to some water plants taking on more water than they were designed for, which dropped water pressure. The resulting conditions led to pump failures across the system, and by the end of August, the city had lost the ability to deliver water safely across the entire city. For the next month, residents experienced boil orders and relied on bottled water.
Why is this important? Because water reliability and availability not only impact our residents’ daily lives, it can also negatively impact property value, as shown in a 2021 study of the impact of boil order notices on real estate in Marion County, West Virginia. This study found an aggregated marginal willingness to pay the value of $4.2 million for a one-day reduction in the number of boil water notices over a year (link). In other words, reducing the number of boil orders brought increased value to the assets in question.
Of course, in addition to asset valuation, the cash flow is also restricted when those water authorities raise rates to cover the needed repair and maintenance to avoid service interruptions. In 2021, Bluefield Research studied water rates across the US and found the rates rising 43% over the past decade, an increase greater than any other household utility.
This same study showed the average cost per household for water and wastewater had exceeded $111.60 per month across the 50 largest metropolitan areas. It also showed that wastewater services make up 60% of the total bill.
So we use water, likely in far more significant amounts than we realize. That use is increasing, and the infrastructure that supports that use is failing, requiring increasing repairs and maintenance. The combined reduction in water availability with increased infrastructure costs is causing water costs to rise faster than any other utility. Likewise, failure to provide adequate water negatively impacts our property valuations.
But wait, I’m not done…..
We still haven’t talked about the water cycle, specifically climate change’s impact on that water cycle. Remember in sixth-grade science class when we learned that warmer air holds more moisture? It turns out that was true….
A warmer climate pulls more water from the ground through evaporation, resulting in drought. That warmer atmosphere also holds more water, so when that water is released in the form of rain, the intensity of the water is increased. More extreme rainfalls which can be overwhelming for the water drainage system and leads to flooding.
It is a vicious cycle… but what can we do?
First, keep water in mind as part of your overall carbon reduction strategy. Energy is important, but don’t forget that water is part of the energy system. This means taking action to conservice water also helps reduce the impact of water scarcity on the energy system as well.
The great thing about water conservation is, for the most part, we have a good idea of how to do it, and it is not much different from energy efficiency. Not surprisingly, the first step is data. You must first understand what you are using in order to impact that use.
Fortunately, most water is delivered to apartments through a master meter. The landlord then has two options (depending on jurisdiction laws) on how to recover the cost of the water - submeter and bill back for actual use or Ratio Utility Billing System (RUBS) the bills back.
Let’s spend a moment on RUBS. If you are unfamiliar, RUBS takes the total utility expense - in this case, water - and spreads it evenly across all units, billing each unit an equal share of the total expense. In past articles, we have discussed so many times the importance of resident engagement - so let us think about resident engagement with RUBS. No matter how much water you use at your individual unit, you will receive an equal share of the water costs of the property. So if I use more than anyone else or less than anyone else, I still get one share of the total bill. You can see RUBS doesn’t actually encourage water conservation; it just splits the bill. It is literally the same as going to dinner with someone and just having a salad while they have a 7-course meal, and then dividing the check equally. If you intend to encourage conservation, your RUBS program is not doing that.
Meters are a superior option in that the resident is billed for their actual water use and a share of the common area water use where permitted. Not only does this reward the resident who chooses to conserve, but it holds accountable the resident that does not. But there is another potential hidden benefit as well.
It is a rare week that someone isn’t calling on me to tell me about their water detection sensor. There are many reasons you might want to have some kind of sensor to know if you have a water leak. From conservation to insurance, the more proactively we can address a water leak, the less impact it has. But what would you say if I told you that if you are submetering - especially with an automated meter reading system, you already have a leak detector?
Let’s start with a basic meter, even the one on your house today. If you go into your home and shut off every faucet, then go out to your water meter, you likely have a little triangle on the meter face, along with the dial and a register. That little triangle is a flow indicator - it indicates that water is flowing into the unit or your home. If the triangle is moving, water is coming into the house utility system, and if every faucet is off, it may indicate a leak.
Often, those automated meter reading systems have the ability to report continuous flow. But if it isn’t turned on, it won’t alert you to constant flow. It is worth asking your meter reading company if your meters have the ability to report continuous flow. If they do, coordinate with them how to turn on this functionality and whom the meter should alert if detected.
So what if you detect continuous flow? In the world of apartments, I would have my maintenance team start with the toilet. 65% of all water leaks within the home result from toilet leaks. But it is a pretty easy test to see if they are leaking, and it might even be a resident engagement opportunity. Apply a small amount of food coloring - just enough to change the color of the water - to the toilet cistern (the tank in the back of the toilet), and then wait. If the colored water appears in the toilet bowl - you have a leak. (Be sure to flush the toilet after testing a couple of times to clear the dye out of the tank - it should stain ceramic bowls, but still best to get it out of the toilet instead of leaving it there).
If the toilet is ruled out as the leak source, we can turn to the other taps, water heater, and showers. Something as simple as a dripping faucet can add up. The typical drip is about ten drops per minute or one drop every six seconds. That amounts to nearly a gallon per day and, over a year, 347 gallons from just a drip. If the drip is faster than once every 6 seconds, those numbers only increase. The repair might be as simple as tightening the faucet or aerator or replacing a washer that literally costs pennies.
Water dripping might also indicate another issue that we rarely discuss - excessive water pressure. One of the first things we do is install low-flow aerators and shower heads to help conserve water. Did you realize those devices are actually designed for a particular water pressure, typically 60 psi? If your water pressure exceeds what the aerator is rated for, you are delivering more gallons per minute than the design calls for, and you may also experience issues with the faucet’s performance.
Buildings rarely have consistent water pressure across the entire building. The further you move either in elevation or distance from the main water entry point or booster pump, the more potential for change. I interviewed Rick Skinker of Indoor Water Conservation in an earlier blog post. Here is a link to that article: Water Pressurization. Addressing water pressure issues can significantly impact your water conservation efforts.
Of course, other tried and tested water conservation measures are effective for multifamily operators, from smart irrigation to landscaping strategies such as Xeriscaping and using native species in plantings. This can also extend to design, including the elimination of water features in landscaping design and the capture of rainwater or greywater for irrigation purposes (if permitted).
You can help reduce the impact of the built environment by sharing this blog with your peers. Together we can impact the 39% of greenhouse gasses attributed to the built environment. It starts with awareness, and we succeed with teamwork.
Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the built environment’s impact. When not blogging, Chris is helping residents, clients, and investors reduce their energy, carbon, waste, and water impact as the Senior Director of Energy and Sustainability for Greystar. Our team’s insight into the utility consumption of our managed and owned portfolios provides insight into opportunities to identify and mitigate risk. We leverage innovation and experience to ignite solutions with real impacts while tracking performance, ensuring the trendline stays laser-focused on the goal. We in real estate have a tremendous opportunity to make a difference in the built environment. Standing shoulder to shoulder, we will get this done. I can be contacted at: chris.laughman@greystar.com for questions, concerns, or collaboration.
The opinions expressed in this blog are my own.
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