Video: Water & Climate Risk for Sustainability Managers: Regulatory Risk | Duration: 3812s | Summary: Water & Climate Risk for Sustainability Managers: Regulatory Risk

Transcript for "Water & Climate Risk for Sustainability Managers: Regulatory Risk": Right. People are joining. Welcome. Welcome. Hello. Good to see you, Jose. Good to see you, Megan. Good to see you, John. Really excited about this one. Very excited to be here, Jose and Megan. Thank you for joining us. We're we're excited as well. Alright. So people are joining. We can just get started, I would say. Really excited about this series of webinars that we have been doing. This one is, really, really special. We're gonna be talking about water, regulatory risks. We have 2 amazing experts, here that we are about to introduce. So really, really happy about this one, and thank you, everyone, for joining. Can we go to the next slide, Lucy? Right. So how some housekeeping items before we begin. First of all, like, the webinar is gonna be recorded, and the webinar webinar recording is gonna be published on Waterbond website. So we're gonna be sending that out after webinar. We're not gonna be sharing the, webinar slides. The duration of the webinar is gonna be about 50 to 60 minutes, and, only the cameras and the microphones of the webinar speakers are gonna be available during the webinar. In terms of q and a, we're gonna have some time at the end of the webinar for some questions. Right? But please feel free to ask your questions as we talk. Right? So, Megan and John can answer those questions also as we talk. And last but not least, we are constantly improving the webinars that we are doing and the topics that we are doing, etcetera. So at the end of the webinar, we're gonna be sharing some feedback survey. We would love to have your feedback, and we are we we are here to continue improving and to have your your input. So those are, like, the housekeeping items for these webinars. Before we start with some of the introductions, we'd love to hear a little bit from you. You know, where are you joining us from? If you can introduce yourself in one line, that'd be amazing. And, let's start with the speakers. John, could you please start with your interaction? Super, super happy for you to be here with us. Thanks so much, Jose. My name is John Matthews. I'm a scientist by training. I have a PhD in ecology and evolution, especially around freshwater ecosystems. But for quite a long time since, 2007, I've been working in the climate adaptation and resilience space. And in 2010 with a colleague who's an economist from the World Bank, I started a global NGO called Agua, Alliance For Global Water Adaptation. And we work on the full spectrum of issues around, water and climate resilience. Thank you so much, John, for that introduction. Megan, do you want to continue? Sure. Yeah. Hi. Megan Knowlton. I'm a senior water adviser at Water Plan. I'm based in the US in Washington DC, so over here on the East Coast. I my background just kind of a mix of hydrology, and a focus on kind of the sciences and then going into, corporate sustainability by way of water. So I I have a master's in environmental management focusing on water and then, started my corporate sustainability career in the Coca Cola bottling system, really focused on environmental and on sustainability. So both kind of compliance and and on sustainability, KPI, tracking, targets, all of that good stuff. Eventually moved into tech and did sustainability in tech for a while, focusing on a variety of different resources, like energy and as well as circular economy and waste. And now I've come full circle and are and I'm combining tech, sustainability, and water all in one place at at WaterPlan. So happy to be here. That's amazing, Megan. Thank you so much for the interaction as well. And, let's finish up with mine. My name is Jose Escuelinho. I'm the cofounder and CEO of WaterPlan. WaterPlan is software to help companies that use water in the production process, the supply chain to quantify and mitigate water risk. And my background is in software engineer in engineering, and I have been working in the water sector for several years now. Really, really passionate about this space and really, really excited to be here in this webinar with you all. So maybe we can continue with the agenda of the meeting. Today, as I was telling you, we have, like, an amazing, webinar coming up. These are some of the topics that we're gonna cover with these amazing speakers that we have from understanding what is regulatory risk, to understanding the role of stakeholders and regulatory frameworks, how to measure what risk the challenges and the opportunities, and then we're going to finish up with the role of technology and AI, which is really, really exciting. We will have, as I mentioned before, some q and a at the end of the conversation, so you can ask your questions there. But once again, feel free to write your questions in the chat as we continue or in the q and a feature of the platform. Right? Alright. So let's get started. First of all, this question for for John, we'd love for you to start. How can you define what is water regulatory risk one? Sure. I I think that there are probably two levels of, regulatory risk that, that climate change presents, to, water issues. I think there's a, there's a kind of a higher level economic risk, how we think about what, economic sectors or, macroeconomic trends. What I what I, wanna focus on probably, at least to begin with, is more on, what's happening with individual companies. And I think that that, that we are are seeing a shift in awareness that, water is a systemic driver across companies. It's not just in the water, that we can see, that we're actually managing in in in pipes or manufacturing or, data processes. But it actually, runs through even, potentially through the lives of our employees. And, and and, in that that sense, there's a, I think, an epiphany that's starting to occur in many countries. I think, the day 0, process in Cape Town a few years ago is a really good example of that. Companies made a a shift from seeing that that they had, water scarcity issues that were really the the the in the province of, city leaders to saying, actually, these are things that we need to manage inside, and that just managing risk is actually insufficient. We need to think about kind of a larger picture. I I think of it as a transition from risk to resilience. And, and and thinking not just, how do we reduce risk, but, actually, how do we build and enable, redundant systems, enabling systems, systems that have, backup components, and and starting to see water at this kind of thread, that that connects, our processes, and parts of an individual company. At the the higher level, unfortunately, I think regulatory frameworks, are retrospective. The climate change term for that is that they're stationary. That is that they look backwards, and they don't look forwards in time. And right now, the water system, like, the the hydrological system globally is in rapid evolution, and it's going into new conditions, ones that we haven't seen before. And and that makes it really hard, for regulatory frameworks to catch up because they actually need to not catch up. They need to jump ahead. And, and in that sense, there's this, attention that's between what's what what, is happening with the insights inside of companies, versus the the the frameworks that that we're using to regulate com companies. And I think that's it could be a creative tension. It could also be potentially its own type of new risk and and a potentially destructive one. Oh, interesting perspective, John. Thank you so much for sharing that. Meaghan, we'd love to have your your your input as well on that this specific question. Yeah. Absolutely. So, you know, regulatory risk, I think about things from kind of the business side. What is the risk of water related regulation against, or to a business? And in particular, since I've kind of worked in the sort of sustainability role as well as the environmental compliance role, I think about it as what are the risks of negative impacts, like fines or, say, shutdowns, other types of enforcement actions that can come from noncompliance with regulatory frameworks, with policies, with rules in place from, really, a variety of different levels of government. It can be local government, city councils. It can be, of course, federal government and and on and on. You know, there are a few kind of stated definitions of what regulatory risk means. You can look at CEO Water Mandate, for example, has has kind of a nice definition having to do with, regulatory risk around when policymakers or water managers make changes to different regulations or management practices that they put out there. So it can be laws. It can be management rules. Practices that they put out there. So it can be laws. It can be management rules. It can be regulations. But for us, when we think about risk associated with them, it's not just the risk from non noncompliance, but it's also when those rules, policies, laws change. And and you need to be able to keep up with them with the changes, right, in order to make sure that you stay in compliance with them. It can also mean that it's not just about compliance, but it's about how that impacts the operations of your business. So what do we need to do to come into compliance, and how does that how does that impact your, your operations, the costs of projects that you need to do? Do you need to hire consultants? Do you need to hire engineers? Do you need to bring in new monitoring equipment, for example, in order to come into compliance? So that can be supplies, services, cost of operation, all of that that kind of impacts the way you manage water internally. So, you know, it's risk from compliance and sort of the external enforcement actions. But it's also the the risk or the costs associated with coming into compliance. So what do you need to do internally and what are those costs gonna be to your company? And then, you know, just really kind of underlining that focus on on change. What are the changes or the trends occurring in regulations, in policies? And that can be, you know, again, sort of management best practices that your local government puts out or even that your federal agencies put out, because in a way, that can still be something that you need to come into compliance with for a variety of reasons. It can also be about permitting or about water rights. So, those are kind of the key ways where where you can end up really being caught in a bind if you're not keeping an eye on the trends and the changes, that might be facing your business. Thank you, Megan, for sharing that. Really really interesting how important is to to manage change. Right? Like, it's a little bit what I'm hearing from from you both, right, in in regards to this. Let's go to the next part. I want to I would love to dive deeper on the drivers behind, water regulatory risks. So the next question that I have is, why should corporate sustainability managers prioritize understanding and managing water regulatory risks? Maybe, John, you can start. It's a really good question. I think, maybe the biggest, reason that companies need to prioritize it is that it's changing really rapidly, and it's a new set of drivers that are in the space. For instance, we've been doing a lot of work, at national and global levels, around climate policy. And, and not just on the carbon side, but also in the adaptation resilience side. And the and in the climate space, the conversation has really turned, to talking about water, water as both a medium for climate impacts and water as a medium for resilience itself. And I think if I had a a single piece of advice for businesses, it's buckle up because the the, the there's gonna be a a profound set of new drivers, and it's not gonna be TCFD. It's, like, TCFD in the climate change world is old news. It's a it it represents, like, a level of thinking from maybe 2,008 or 2,010. We we have learned so much since then. It's, it it it is a an antiquated way of thinking about about climate risk. So what we're seeing, I'd I'd I'd point to a couple of trends that are that, I think are accelerating pretty rapidly in this space. One is, to really pay attention as a piece of very practical advice to not necessarily just what's happening with SDGs, but to NDCs. These are the national climate commitments that are made by, countries on a 5 year basis, in the UNF triple c, in the the UN, climate negotiations. Next year is when countries are gonna be releasing, their NDCs. And there's gonna be a mitigation, carbon section, and there's gonna be an adaptation, which is really gonna be a water section. And, these are 5 year plans. The first, 5 year, plans are are ending, next year, and, companies were not really involved or engaged in that process. I think that's gonna be changing pretty rapidly as countries start to, prepare their drafts next year. And and you could get stuck. Actually, it's it is worthwhile, letting your fingers do the walking, at least in Google, and and trying to figure out who the national, climate focal points and negotiators are, for your sector, for your sector representatives, and maybe for some proxies. Because if you if you work with water directly or indirectly, even if it's through kind of energy consumption or data management, data processing, then, then the NDCs are going to affect you in this next 5 year period. The second, a big trend is we have to count resilience. It's in global climate, language. It's called the gga or global goal and adaptation. On the carbon side for years now, almost a decade, we've had, a relatively clear easy to communicate target. 1.5 degrees, of global warming that we're supposed to be focused on. We've never had something like that for climate change, adaptation and resilience issues, and that is, is ending pretty rapidly. It's not gonna be a single number or a single target. It's probably gonna be a basket of indicators. And there is both a technical and a policy team that was, launched last year, in Dubai, and and that, it's process process will be largely completed by the time of the Brazil cop, neck late next year, and will be implemented. And it's gonna start to roll down through, through a variety of of countries. Most of these indicators, in my my estimation, are gonna be water indicators. And it's not just about droughts and floods. It's not just about risk. It's gonna be, again, this idea that that there that we need to actually be tracking resilience. We need to be measuring resilience and water resilience as a kind of new idea. And and and and that's gonna, come down into regulatory frameworks if we're really successful in many many countries. You can already start to see this, this tension, like, right now, in the EU, there's a lot of kind of push back around concepts like replenishment, that these are essentially kind of climate stationary perspectives, that they're fixed climate perspectives, in a way that a lot of companies are are really implementing them. And and we, we need to reposition these in a climate change, climate dynamic context. So I think, that there's gonna be a lot, that we need to be paying attention to. And if you're not paying attention, over the next year or so, potentially, if you're not actually in contact and tracking some of these issues, then, it can be a big surprise over the next 2, to 3 years. Wow, John. Thank you for for for sharing that. Right? Like, a lot of things happening actually. Right? So really, really interesting to to hear your your perspective there. Meaghan, we'd love to hear your your perspective as well. Yeah. Those are really good points, John. And that, you know, the driver behind why there's more regulation coming is well, so much of it is due to our view on climate change, our kind of collective understanding of climate change becoming better, becoming more, you know, more comprehensive, of the impacts of of climate change on our communities and on the globe. I think too, you know, from the sort of corporate perspective, a lot of the driver for for, responding to regulatory risks is, to your point, resilience, in in the kind of current state of the ecosystem services that they rely upon and that they affect as well. So looking at impacts and dependencies as well. And it's also, of course, staying in compliance. Right? Like, in terms of staying in compliance, there's there's sort of this need to, ensure your license to operate, ensuring, you know, that you could you have business continuity. If you're not in compliance with with rules, you're going to have, you know, enforcement actions taken against you or or in many places, your company will. Of course, it does depend on what the enforcement, schemes are for different policies and regulations. Sometimes it's fines. Sometimes, I I mentioned shutdowns or temporary shutdowns or another organization, you know, a regulatory organization needing to have more oversight or monitoring over what your your company is doing. And so, you know, being able to avoid those risks is usually kind of a key number one thing for businesses to to stay in compliance with any type of regulation, not just water. But then to your point on managing for resilience in the landscape we're in due to climate change and, of course, due to a number of other drivers of of non stationarity within the the sort of environmental or hydrological system, including, land use change, you know, which is often driven by business. So we're kinda looking at a circular argument here that, you know, you wanna you wanna prepare your company for changes in the resources that you depend upon. So this regulatory risk to me is really so deeply tied into kind of all of the other risks that we talk about with regard to water. So your physical risks, your reputational risks, we can get into that a little bit more as well. And and I think that's probably even on this slide. Yep. Planning for planning and reputation, being able to to make sure that your company keeps up as much of a good reputation as possible, as you're as you're managing and working with water, particularly if water is a material risk to your to your organization. And I mentioned financial penalties, which I see on this slide as well. You know, depending on the enforcement mechanisms behind a rule or a policy or a regulation. There can be there can be financial penalties, that come with noncompliance. So those are, you know, kind of the key sort of from a business standpoint, what you're kind of managing against, I would say. And, you know, this I will mention too, we're talking about a lot of different things, involved with regulatory risk. I think it's also important to remember that, this is a place where businesses have a lot of different people working internally on this, and and we can get into that a little bit more too. So I know it sounds scary and it sounds complex, but there are kind of ways that different teams can work together to really align on this. Thank you, Megan, for sharing your perspective. I'm super curious. Would love now to hear some recent examples. You know? So maybe my my next question is if you can share some examples of current or past, you know, what related regulatory risks that businesses face? Right? Maybe, John, you can start, and then we'd love to hear your perspective also, Megan. Sure. The, one of the the the issues that these are fantastic examples, the the the case of, Catalonia, you know, where you actually see, you know, not just, huge ships full of tourists that are coming to the port, but huge ships that are full of water, try trying to supply the city. I mean, this these these are, to me, are are the warning signs of what in the climate community is referred to as transformation. And I would say, transformation in a climate change sense, you can think of it as what happens when, the, hydrology, the ecosystems, the kind of funnel aspects of climate become reorganized in new, into new states. I happen to be sitting on the West Coast of North America right now in California, in in the foothills of the Sierra Nevada. And, you know, California is a is a state that has almost the highest per capita amount of water storage, for energy, for agriculture, for cities, on the planet. But, actually, the largest amount of storage in California is not behind a dam. It's in the snowpack. And what's rapidly happening in California is that the, that that storage is going away, and it's gonna go away in a permanent, form, and it's probably gonna happen pretty suddenly. So what happens when there is no snowpack storage? It's that is the transformation of the California landscape, and in effect, it's the transformation of the California economy. So it it completely changes, the way that, businesses need to think about risk. They are also the way that they need to think about, the systems that they're interacting with energy, health care, transport, and and so on. I mean, those are really powerful, shifts that are happening and they're happening. I would argue in every country, there is no easy water anymore. And the idea that you can kind of simply relocate, to another place and that there's gonna be easier water there is probably a false promise. It it it's probably a much easier, more realistic approach to say, how am I going to, work in this place? Maybe to, twist some of Megan's language. How, sometimes, the best approach to compliance may be to be noncompliant. And, so, I I have probably lots of people that can that accuse me being, very noncompliant. But, I I I I actually, the it may be, like, more effective as a business, as a part of a larger community in trying to think about, collective action even. Let's say, there's a higher standard that we need to be thinking about that actually we need to move ahead of the regulatory framework, and maybe it needs to catch up with us. And, and and I, I think that's something that businesses really need to be prepared for to engage in direct, honest, realistic, expectation because a lot of these major system, investments are they're they're beyond the scope of the business. It's going to decision makers to the electorate and saying, we wanna keep investing in this community, in in this landscape, and and we actually need your help in order to to keep employment to keep our facilities, to keep our systems actually embedded here. So, in in the the examples here are are brilliant, you know, the the idea of water pollution too. Like that all also is a form of water scarcity. And, the issues around reporting Australia. Australia is a is a is a great example of a country that is flipping on climate change. They had a big change of government, and suddenly everybody wants to talk about, climate and mostly water in Australia. And we can see very rapid evolution that's gonna be happening, in Australia over the next few years, especially because they're likely to be the, host for the climate cop after, Brazil. That's a that's a really, really interesting. I love the account in there. I'm afraid you were sharing that, Sean. Meaghan, I would love to hear also from from you. Yeah. I mean, those those are great examples, and and really important too to I love your comment on, on noncompliance. I think, you know or we can kind of, let's flip the flip on, you know, yes, be in compliance and. Right? It's a yes and, kind of improving upon what's out there. And I do think there are Leadership is often an example of noncompliance. Right? Exactly. I think that's that's kind of a fun way to put it. And and it is true that a lot of the time, regulations only get us so far. It's so I mean, you know, we can talk about kind of the the coming trends, of course, like like the in the US, the Securities and Exchange Commission trying to pass, you know, regulations or rules for reporting on climate risk and and including water risk and I'm then getting litigated against, right, and and kind of slowing that down. So, you know, it's it's a little bit difficult to say. 1, I wouldn't say, but simply by maintaining compliance, you are maintaining resilience for your company. I think it takes further steps than that. And I hope that that is aligned with your thinking. I will say, you know, there are other examples, too, to kind of help underscore that point around, water scarcity and kind of driving the need for coming up with more more resilience, so with more mitigation strategies. I'm particularly reminded of, some areas in Mexico where groundwater depletion due to long standing drought and, overexploitation of groundwater resources has really led the government in certain areas to have to prioritize where their utilities are directing or allocating water to. And so, you know, the utilities have essentially had to come up with prioritization schemes for who they're going to allow to take water and whose water permits they're going to temporarily just suspend. And in those cases, you know, we have seen industrial users or or companies being told, you are not going to receive water or the same amount of water from the government as as you normally do. And you're gonna have to come up with other ways to operate, or you'll simply shut down, for you know, sometimes it's been up to a month. And and that's not the only place, that we've seen it a few times in in Mexico with a few different, organizations where they're suddenly without water due to the the local government saying, I'm sorry. You're not our priority our priority user. It's often domestic and and utility, you know, government usages as well. And so, you know, in those cases, it's it's really needing to think of mitigation strategies that aren't just about regulatory compliance, but are also about managing for the way that you use water. It's reducing how much you use water, coming up with better ways of being, you know, of being more, resilient and efficient, internal efficiency standards. And then, of course, there's also looking at, collective action in in the catchments in which your company operates, to to John's point about looking at ways to to improve the resilience of the local ecosystem with things like replenishment, with conservation efforts, but but looking at kind of the long term, how that can support, environmental flows, how it can support the ecosystems, and and kind of everything in between. Thank you, Megan, for sharing that. I'm super curious. We are about to launch a poll for this amazing audience that we have. The poll is basically a question. So has your business experienced any restrictions, fines, or changes in regulations related in relation to water management? We're gonna launch that. You're gonna see that in, like, a poll feature on the platform that we're using for the webinar. We'd love to have your your answers there. And as as I mentioned before, if you have, like, any questions, just, like, putting them on the on the chat. Another thing that I want to discuss now that, you know, like, working in a in a tech company is something that you are thinking all the time. You know? Hey. What what is their role of technology? What's the role of a technology company? And which are the other stakeholders involved in in kind of, like, thinking and working in terms of regulatory risks? So, maybe the question that I have in this case is who are the primary stakeholders? Right? Like, from governments, organizations, NGOs in driving water policy, and what are their roles? Right? Your your input, John. I know that you know a lot about this. I it's a, this is actually a a really interesting question. It it maybe 5 years ago, 10 years ago, it would have been kind of a boring question. But, actually, I think it's evolving really rapidly. And and I think, climate change is a good example of the sort of generation of new insights that are starting to appear in this space. Like, I I, you know, I I, was, I'm really, like, a water nerd at heart that has has, gone through a lot of therapy and become a resilience nerd. And, and and I I would say what what that what that means in practice is that now I think in terms of systems and not in terms of watersheds. And systems are different than watersheds. Like, for instance, the, the electricity that I am speaking to you on, it it was not generated in, in the watershed in which I'm sitting, and it was generated in a far distant watershed, also, in a very water intensive way, even even though it was a a mix of thermal and hydropower systems. And so, like, the stakeholders, like, I think if you, you know, had had could go back to, like, a fairly traditional analysis thinking about who are the stakeholders that are relevant to me, we would be thinking in terms of hydrology. And I don't think even hydrologists are thinking that way anymore. I I think we have to think about these kind of extended networks, and interdependencies. In a in a sense, we're thinking about water itself as the kind of medium for supply chains. Think of the chip crisis that we had, as a supply chain crisis. It was really, like a drought issue in Taiwan, in effect, a climate change issue, that was, rippling, especially here in California for, tech, firms. So it it the the stakeholder environment, for Silicon Valley was not its basin. It would actually included Taiwan as effectively part of its basin. It mattered what was happening in terms of the hydrology, in an island off the coast of China. So, I think, like, those are those are the kinds of insights that we're often really missing in our existing intelligence systems, And and that we really need to kind of open up this, stakeholder space and and try to think a little more creatively about what are these interdependencies and how does water often serve as the kind of connectivity. And maybe a last point there. Meghan, you like to use the word efficiency, and I think this is also a word that is a little bit under fire, from the, from the climate change, community. Like, an efficient system is maybe a sustainable system, but it's probably not a resilient system. And and this deep contrast between the sustainability and efficiency and resilience is important. We we like, a really efficient system is essentially planning for a single future. And it's probably, defining the stakeholders in a quite narrow way. Whereas, a resilient system, we're thinking about layers, we're thinking about redundancies, we're thinking about these interconnections and how, they are, playing a kind of multifactorial, role with one another. It's definitely at least three-dimensional chess, that that that that's happening. And, and in that sense, you know, our many of our traditional measures of doing a good job are they, especially a lot of traditional water stewardship kinda comes down to thinking about, efficiency and water use efficiency. But I would actually say water use resilience is a different concept and and one that we probably need to start bringing into how we think about stakeholders and operations and strategy. That's a really, really interesting, like, a I I I can, like I think, like, we can do, like, a entire webinar to talk about this, you know, and about, like, this kind of, like, artistic of these issues. That's super interesting, John. Thank you for for answering that. Megan, we'd love to have your input as well. Yeah. Oh, super, super interesting, thoughts, John. I think from from, like, a business's perspective, I think you were you're starting to kind of get at, you know, all of the different players who can be involved in in water management, of course. And when we talk about regulatory risk and talk about regulatory compliance, I mean, really, you're looking at the entire management plan and processes and standard operating procedures for a business in regards to water. So, yes, we can talk about regulatory, but we're also talking about management of the resource, that's being regulated. So, you know, yes, to your point, there are global interdependencies here for the way that a company is managing water because of how globalized our supply chains are and our value chains too. You know, we've certainly seen times where flooding in in one place across a a region can impact, the way that, supplies can make it to a plant, say, if you're a manufacturing company or that employees can show up. So, you know, while that's less of a regulatory issue, it's certainly something that to keep in mind that that your system that you're operating within, includes water from all kinds of different areas, not just in your basin or in your watershed. In terms of inside a company, who's focusing on on regulatory risk, with regards to water, You know, we tend to focus these webinars speaking to the the sustainability manager. And I have been in that role before, and, you know, typically, you're working to perhaps report on compliance or you're keeping, in compliance with regulatory frameworks by doing your reporting, your environmental reporting, your ESG reporting, you know, all all such types of mandatory standards when there are ones in place, that your business comes, you know, under. But there are also, you know, other teams involved. So the EHS team, for example, is usually involved in in a lot of the management of water as well as managing to be in compliance with permitting, with regulations, with with policies regarding wastewater, source water, water quality, you know, such as managing for, keeping your wastewater within certain limits as required by your local, utility or the watershed management commission. There are also, you know, risk teams usually within companies. There might be audit teams that you're working with as well. Of course, you're also talking about site level managers or site level workers. So, you know, we can talk to kind of the global the person at the global office who's involved in sustainability or in environment. But, you know, at the end of the day, in order to manage for water throughout your entire portfolio, you really need to be working with the people on the ground who are taking the actions to enforce or to, to implement a water program. And then, you know, finally, I do also want to mention that when we talk about regulatory frameworks, yes, we're looking at government institutions, and their enforcement agencies who are involved in those. But we're also looking at all kinds of other stakeholders, not just business, not just government, but looking at the community and, NGOs, activist groups, watchdog groups, you know, lobbying groups. There are many different kinds of organizations that that can affect and and have a voice in regulatory change and in advocating for changes to the ways that business operate. So, this is part of why reputational considerations can be so important kind of mixed in with regulatory considerations, and why collective action and engaging with your community can be so important, with regards to both reputational and regulatory. Thank you, Megan, for for sharing and giving your perspective again. Would love to share like to shift now a little bit to, again, to some examples. Right? So maybe the next question that I have for you both is, what are the most important regulatory frameworks globally that sustainability managers should be familiar with? If you can give some examples, maybe, John, you can start. Sure. I I I think right now what we're seeing globally is a is a major reevaluation. It it it, again, to play off, Megan's use of the term collective action. I think we're in a period of collective learning, and that, learning is a little uneven. And, and it's it's, it it it's often slow. It's a little too incremental, I think, for what I would wish, but we're starting to see it happen more broadly. I I mean, I love the example, here around, Chile. They Chile, unfortunately, has they they've been really struggling to try to, revise their constitution. And one of their, like, really important ideas, was to actually, to include climate change, not just carbon, but also in the adaptation resilience side. As a constitutional issue, it would have been the first time that climate change showed up in any country's constitution. And that that's really powerful. The, the the US, Security and Exchange Commission has recently, been, enforcing the idea that we need to have climate, disclosure disclosure around the materiality of of issues. Also, a very important trend, kind of comparable to some of the things that we're seeing in the e EU as well. But I would also say a little insufficient and and and thinking primarily in terms of physical risks and not that whole range of other risks that Meghan was really talking about. I mean, to give kind of a quick example, 70% of the water in Beijing right now, it comes from the Yangtze. And the Yangtze is nowhere near Beijing, and it is not it's like 4 watersheds away from from Beijing. So it that that tells you that actually systems are being completely replumbed. A huge amount of the water in Mexico City, comes from outside of the the Valley of Mexico. So, we we are reorganizing whole systems, in part because of these kind of larger climate change impacts. And so we need to to to think about how we get ahead of transformation, climate transformation as an issue. And, well, important, I think as as as points on a line, I think that these are that that that line is not a straight line. It's a line that's gonna be, in terms of regulatory frameworks, gonna be shifting quite a vertical way. We're gonna see, actually, huge amount of of regulatory adjustments, and it's probably gonna be abrupt. It's gonna be, you know, when 2 category 6 hurricanes hit the East Coast of the US that we see of, like like, a a profound shift the next year in regulatory frameworks around, disaster preparedness, or I would anticipate, Brazil following the the really serious floods of this year. You know, completely unforeseen, historic near biblical floods. They were actually, I think, the worst or second worst, climate disaster, in the southern hemisphere in history. I mean, these are these are really powerful new types of of of impacts that we're seeing, and we can't just play catch up. We actually need our regulatory frameworks to actually enable us, to to get ahead. In that sense, I recommend Chile in trying to move in that direction, and and hopefully, in trying to promote, an idea of of resilience over simple, risk reduction. That's super interesting. You answered some of the the questions that that I have, you know, like, if it is sufficient, you know, and kind of, like, the trends. So thank you so much for that answer. Meyen, would love to have your your perspective as well. Yeah. I mean, you know, just looking at it from the corporate perspective, a lot of what, I'm seeing from from companies that I know or that I work with, you know, it is kind of a lot of the European countries and, I mean, excuse me, companies and then companies that have, significant operations within the EU, really coming, really coming into compliance with with ESRS part of which is now, you know, being used with CSRD as well. Those are really that's really kind of where I'm seeing a lot of the action lately with regards to ESG, mandatory reporting. I think John brought up, the the SEC in the US, the climate disclosure rule, really, to me, when it when it was first published and then each iteration as it's kind of losing some of its, some of its meat. You know, I think when it first came out, I sort of said, oh, it doesn't really have the teeth I was looking for. You know, one of the key things it's lacking is a is a focus on supply chains, kind of that scope 3, mindset for for those who work in in carbon. And then, of course, we can look at kind of the scope 3 for water as well. So you kinda you brought up those global interdependencies, and you have to look at those. Companies, I believe, should be looking at those even if it's not mandatory, even if it's not required. And I I wish that there were more political will to make that required simply from a environmental or a nature mindset, that would be that would be a wish that I would like to have fulfilled. You know, of course, from a sustainability managers or an EHS manager standpoint, I also I also do want to recognize that that that's introduces more complexity to your job, and that it makes things harder and, for a little while for companies to figure out how to comply with these rules and how to do the reporting and their costs involved. So I do want to take that moment to note that. But I think everything is kind of leading toward this space where, whether it's regulatory or it's networks of businesses coming together that we are moving toward a place where it's not just reporting, it's also improving our processes and becoming better stewards of the environment as companies. That's coming. It's already coming. It's already happening. So those who haven't yet started, it will be coming. Thanks, Megan. And on that note, we'd love to shift to talk a little bit about how to measure regulatory risk. Right? So in this case, we'd love for you to start with with the answer, but my question is, like, basically, how can sustainability managers, and we focus there, measure regulatory risk. Right? Meaghan, we'd love to have your your your your your thoughts, and then and then Joan as well. Yeah. Yeah. So this this slide that you all are seeing, pulls from some of the indicators that we that we have thought of, at Water Plan and that we've collected from some of the best practices. But there are so many that you can look at as kind of measures or or proxies of regulatory risk. So really thinking about it from the global perspective when you are a global sustainability or environmental manager, and you're like, how do I measure I I need some way of reporting to my executives that there's regulatory risk at a site, but I I'm not in that country or in that state or province. How do I how do I measure for it? So there are a number of ways to at least kind of get a proxy for it from a country level, and that where you can pull from databases that are managed by a couple different, organizations. So we take proxies from, from essentially government effectiveness or ineffectiveness, corruption, you know, political instability, how much are regulations changing, are there are there, funding mechanisms in place, are they being allocated appropriately. All of these things can kind of be proxies, whether they're related to water or not, that can give you a kind of first high level sense of how is a country operating and are they managing for water appropriately. Then, you know, you can really start getting into kind of the research weeds and and part of why, you know, this can get complex really fast for pulling the data, because you can start looking at specific freshwater and groundwater status laws, and then as well as the monitoring mechanisms or implement or, or kind of different instrumentation in effect. So you can kind of start looking at indicators of how much monitoring is happening with regard to service water or with groundwater in a region. If you can't find any monitoring of it, then that's kind of an indicator for you on, on risk. To me, that kind of indicates, there might be a little bit of a concern here if nobody's monitoring it or at least from the government side. You're also I mean, you're you can start looking at reports from the local government or from kind of larger government organizations, agencies at the federal level as well, whether there are changes to permitting or to water rights. Those can kind of have key ramifications for the ways that businesses operate. And and, you know, of course, it can be different across the country too. So sometimes looking at just the federal level doesn't really get you all the way there. I think everybody all of us speaking on the webinar today, we just so happen to all be in the US, which is kind of amazing. And, you know, if you look at kind of the typical eastern in the US network of of water rights and then you look at western water rights, they're very different frameworks, that kind of started the whole thing, you know, couple 100 years ago. And then over time, they've really kind of evolved in very different ways and and are continuing to evolve. And, and you can see different litigation come up and different management plans come up that that can all kind of impact how how companies operate within those. And then, you know, we can always, get into more details on data sources for those indicators. But, there, you know, there are a couple of of, databases out there that folks can can look to. But, you know, I think what's, for me, often most important is actually really doing the local data research. And that's kind of using the phrase patchwork. That's when it becomes complex, because you wanna start looking at, the local you know, the maybe it's a city council. Maybe it's a regional watershed management board or commission. Maybe it's state or province level. But being able to pull in policy documents, you know, reports from the latest council meetings, looking at, legal filings, and then, of course, news sources can be helpful with kind of following the trends as well, at least with, like, the harder kind of regulations that are coming for your your company. So that's fairly high level. I can always get into more detail. Yep. I'd love to unpack also there, man. Thank you for sharing. I totally agree on the importance of of local data and having, like, really, really that granular data, you know, it can be, I would say. John, we'd love to have also your perspective, and maybe then we can shift also about talking a little bit about, like, the common challenges that, you know, like, sustainability managers and people face when trying to measure the risk and comply with water regulations. Sure. I wanna make, 3 quick points. The the first one is the most important data is data that we'll never have. That's data from the future about what the future is actually gonna look like. And, and this is actually where insight is really important and how we we think about, about the data that we do have access to. My prediction is that, is that, you know, we think about data is, like, happening, like, like, drawing lines on a on a chart, and those lines are gonna get really weird looking. And, we need to be prepared. We need to think about it, not not the future looking like like the next three points that we can imagine on a straight line, but, like like, very curvy lines. Second point is, is we we should be thinking, as well about the mismatch between, regulatory frameworks and how how we, we we measure, our our water, directly or indirectly in this, regulatory frameworks and and the world that we either live in now or that we move in. I I loved Megan's example about, about, the difference in in the US between eastern, water and western, water. A few years ago, I was working in Lahore in Pakistan, with some, government decision makers. And, and I I I had been working there quite intensively with this team. They were really smart. They were really professional at one point. One of the senior decision makers turned to me and he said, you know, I I I just have to say, like, the English really screwed us, with, by applying English water law to Pakistan. And and I said, you know, they screwed us too. So it it it it it it like, there there is something that actually is is a mismatch often, between, like, the way the like, the the regulatory frameworks, they're designed to frame problems. Right? Like, they're they they have a they have a different they have a they have a clear, set of problems that they're, trying to address. But what if those problems are different now? What if they what if we actually have framed, them incorrectly? And and it actually is becoming a hindrance. And that that, you know, if you're an ESG manager, then that might actually mean that you need to be involved in a conversation with the c suite really talking about, look, what is the risk of actually complying at this stage? What what what do we need to actually think about a divergence? Or in trying to work with with our peers in a way to actually shift and evolve, these frameworks. And and that should be a conversation that is happening in many businesses, not least because, water itself is, is not just, like the water we see, but it's in, in, almost every aspect of the business whether you would like to see it or not. It's that scope 2, scope 3, set of impacts that you often need to be worried about. And the last point I wanna make, go back to something I said earlier, is we need to start measuring resilience. And, and that's not reliability. It's not efficiency. It's it actually is about in many cases, it's about flexibility. It's about agility. And and it's about being able to see multiple futures, not just one future. And and and these should be things that we can look into our own system. So I would say, like, you know, you you are I'm guessing the people that are on this call that that are listening, you're the people that measure stuff. And you probably have access to the right data, internally or or that you're adjacent. You're in the office next to the people that have the right data, and, and you you you actually can exercise, like, a like, a very important critical leadership skill right now in being able to say what is it that we should be measuring that we're not measuring right now. And if we're not reporting it to a regulatory to to a regulator, maybe we need to be reporting it to our employees, to the leadership, to our our our shareholders. And and, and and and improving to them that actually we see these risks that are coming. We see that this the shifting landscape. And and and we acknowledge that sustainability is now a moving target. It's not a fixed set of targets anymore. I love that. And remembering why we're here in the first place. I love that kind of call to action for ESG or sustainability managers. You know? It's like remembering, yes, if new regulations come up or new frameworks come up and they make it more complex for us, that is difficult. But it is it is why we're here is to help our companies do better by the environment and be more resilient long term. And on that note, we'd love to look to ask you, Meaghan, and this is similar to the question that we just got that we also like, maybe you can answer that in, like, in a few in a few minutes. Right? But how challenging do you think is challenging do you think is for sustainability managers to gather and report high quality water data specifically about that regulation across their operations? Right? And, maybe Yeah. What what the question is saying also is how to downscale also that, information that is relevant for a specific location. Right? It is. I mean, yes. It is really challenging. And, you know, again, bringing up the word patchwork is usually what what we kind of refer to as having many different types of regulations that could affect your company across all of the different regions that you operate in and all of the different local municipalities that you operate within. Sometimes, yes, it's accessing data and information on what, regulations or policies are out there, but it's also a lot of the time for me in my experience, the hard work is figuring out, does this apply to my business? I I'm not even really sure. And so, you know, you end up working with the legal teams or the risk teams or whoever, compliance team to try to figure that out in the first place. And then it's figuring out how do we be in compliance with this. So, yes, it is really difficult kind of pulling in that that local data kind of to the to the question in the chat, and and why it's so important, I think, to to kind of innovate our companies forward in the way that we use different systems, whether it's in our, environmental management system in your EMS or in, you know, other types of third party platforms or your own internal platforms. But there's gotta be a way to pulling in to pull in at least annually kind of updates on the regulatory trends and and publish laws that could affect our business, or that are even proposed that could affect our business in the future. So I think the slide that we just pulled up is showing our ways that we think about using kind of a mix of AI and then water experts to kind of validate, you know, is AI pulling in the right risks and the right trends? We really see that the role of technology is helpful in kind of pulling all of that together so that you can look at it from the global scale and then downscale into looking at, hey. If I click into the site, what are the risks here at all of these different sites? That's spot on, Megan. And I'm wanting to basically, we are running out of time. So this is, like, the slides that that we have, then we can maybe we can do, like, a minute questions. But, yeah, like, I believe it's interesting for you to maybe to comment a little bit more about how can technology and AI have sustainability managers manage these complex regulatory environments and collect the data. Can tell you there's a lot of opportunities on getting that data gathering, like, automatically and and really, really get more accurate in the specific locations in which we operate. But we'd love to have your your perspective. Maybe, you know, Megan, you shared a little bit. We'd love to have your perspective also, John. Should I should I go first or or or Meg? Yeah. Go. Yeah. Yeah. I mean, I I I think, we're in a really powerful space right now with with AI. I think we're still trying to figure out exactly, what what all those tools are. And, actually, some of the innovation that I I I've been seeing that's, been happening. For instance, we've been we have a tool that's called the water resilience tracker that we engage at national and subnational scales, with, so far around 13 countries, middle income, lower income, Nigeria, Malawi, e Egypt, Nepal, Brazil, on and trying to think, like, what does resilience mean across ministries, and and how do we we, make sure that there's a, like, coherence across governance levels and across different types of actors in this space. And, actually, AI has been one of the important tools that we've been using recently in Brazil, a very large, very complex country. It's a federal system, and we've been using AI not just on the analytics side, on the data side, but also in being able to, actually unpack and untangle 100 of thousands of words of policy documents actually. To actually see where the water and climate connections are across policy frameworks. And and and where we actually need to, make sure that we, we draw these connections or that we make adjustments. And I think, like, this this application of AI, not just to data, but actually to to to think of policy framework itself as a kind of data is is a is a an interesting and new insight for us. Yeah. And I'll just add one thing too. I think that's a really interesting use there, is feeding in kind of the policies so that you can pull out, like, what are the key things I need to know about it? But it's also, we've we've been looking at ways that organizations are using, and and we're doing it too, using AI and technology for helping you to, to create your responses to these, regulatory frameworks as well, particularly when you think about ESG frameworks. You know, can you use AI to kind of pull your data together and then and then at least start your your report for you? What an amazing topic to to finish. I believe that we're gonna do, like, a specific webinar also talking about that. This is something that is, like, really, really I'm really super passionate about. It's really interesting, like, to see all the advancements which are coming and how important this is specifically for for working on those issues and getting better data and better responses. So thank you so so much, John and, Megan, for being part of this webinar. It's it was an amazing conversation, and thank you for all the audience to to be here. Now we run out of time, but we'd love before we we finish to share with you some useful resources. Right? So these are a couple of webinars that we believe that we did in the past that might be useful from, you know, CDP, CSRD, and also talking about, SCC specific posts. And, yeah, we'd love to have your feedback. So after this presentation, we're gonna share some feedback, link so we can have, like, your feedback. And, yeah, if you have, like, any other question, just feel free to reach out to us. Have an amazing, day, and thank you so much everyone for joining. Bye bye. Thank you.