Helping Create a Blue Water Future
President & Chief Executive Officer
Royal Bank of Canada
Pollution Probe Gala Dinner
November 25, 2008
Well, if you told me five years ago that I'd be standing
here tonight, speaking to a room full of environmentalists,
I'd have said you were crazy.
But that was before Al Gore and Sir Nicholas Stern.
That was before Hurricane Katrina.
And that was before corporations realized that climate change
brought both risks and opportunities.
I'd like to say at the outset that I am extremely proud of
what RBC has done in terms of environmental policy and that
we are recognized as one of the world's leaders with respect
to sustainability practices.
I'd also like to congratulate Pollution Probe for almost
40 years of commitment to clean air and clean water and for
continuing to bridge the gap between sectors who wouldn't
normally be found in the same room together, as we are tonight.
I've been asked to speak about the connection between water,
energy and climate change. I'm going to save myself— and you—
the embarrassment of watching a bank CEO pretend to be a scientist.
Instead, I'll take an economic tack.
But first, I'll go on record and say that I believe the three
are related. There is no question about it.
This isn't news. But all too often, energy and water are
treated as separate and unrelated commodities.
Last month, the cover story of Scientific American asked
why there seems to be two camps: those who think we've got
a water crisis and those who think we've got an energy one,
as if the two problems are unrelated.
We need water to generate energy. And we need energy to deliver
Thanks to climate change, water restrictions are hampering
how we generate more energy. And energy problems are hampering
our efforts to find and supply more clean water.
It's a Catch-22.
The bad news is that Canada is not in a privileged position,
in spite of the widespread misconception that our water resources
I'll be the first to say that I used to think of Canada as
a water-and energy-rich nation.
But our population is growing and so are the demands on our
water and energy resources. The truth is: we're not dealing
with limitless resources.
Climate change is simply making a bad situation worse. I'd
be tempted to call the connection between water, energy and
climate change a 'perfect storm', but that term is almost
too easy. We're not in a bad movie. We're in a fight for our
Environment Canada predicts that climate change and a growing
population will strain Canada's water resources, with very
The link between water and energy also poses a serious operational
and financial risk to Canadian agriculture and many Canadian
A few months ago, Report on Business magazine asked whether
Canada's largest economic project— the oil sands—
could come undone because "no one thought about water."
But to mix a metaphor, the water risks to the oil and gas
industry are like a canary in the coal mine. That sector may
be the most high-profile example of water quantity and quality
issues, but it's certainly not the only sector that will suffer
from water scarcity.
Many industries will need to better manage and reduce their
water consumption as well as reduce their negative impact
on the quality of water in our watersheds. This is especially
true for industries that depend on water— like food and food
services, utilities, power-generation, mining and semi-conductor
When we call water a 'liquid asset', it's not just a clever
pun. Any industry that relies on water— and there aren't
many that don't— should be thinking hard about whether or
not it has secure access to water.
Water is an essential raw ingredient for agriculture and
industry, and is significantly undervalued in the market.
And here's where water and energy have a lot in common. When
they are too cheap, there's little incentive for conservation
or for developing more efficient technologies. But when they
become very expensive, the social and economic impacts can
be painful. This presents a daunting challenge for public
It's time to put a price on carbon.
If we want businesses and individuals to change their behaviour— and
we do— we must consider market-based mechanisms such as emissions
trading or environmental taxation.
I should mention that the Canadian Council of Chief Executives,
of which I'm currently Chair, has done some good, objective
work in this area.
Even at the best of times, it's not easy to reach consensus
about the best path forward on an issue as complex as climate
change. Our Task Force on Environmental Leadership, comprising
33 CEOs from all industries across Canada, was no exception.
While we have not come out with a preference for emissions
trading or taxation, we do agree that whatever policy instruments
the government comes up with must be transparent, stable and
Ottawa and the provinces must agree on a coherent policy
framework and a common set of principles so that business
and consumers across Canada are treated equally.
We'll also need a similar, coordinated approach to water
in Canada, where a patchwork of overlapping responsibilities
is complicated by the lack of a strong, overarching national
water strategy and a history of undervaluing the worth of
Now, it would be all too easy to carry on talking about connected
crises of water, energy and climate change. They're well documented,
and most of you in this room undoubtedly know them better
than I do.
But you'll be happy to hear that Pollution Probe's organizing
committee warned me that you're really more interested in
cocktails and catching up than in listening to a speech.
Their exact words were "don't talk about the environment
as if it's the Titanic."
I have to tell you, after attending hundreds of gala events,
I know exactly what they mean. Even at the best of times,
this is excellent advice for any dinner speaker, which I have
taken to heart.
So I'd like to turn my attention to something more positive,
and focus specifically on water.
Just over a year ago, RBC launched our Blue Water Project.
This is a 10 year, $50 million commitment to help protect
watersheds and ensure access to clean drinking water.
Now we're not naive. We know that philanthropy isn't going
to solve the world's water issues.
We know that asking people to turn off their taps when they're
brushing their teeth is a simplistic solution.
We know— and I speak from personal experience here— that changes
to public policy can be a long time coming.
A very long time.
But we also know that water is the problem of the
It touches every single person on earth.
So we launched the RBC Blue Water Project because we believed— I
believe— that Canada can be a global leader in water stewardship,
and we wanted RBC to be a part of it.
I have to tell you that, one year in, water has become a
beacon for our 80,000 employees worldwide, uniting us across
45 countries like nothing I've ever seen before.
But how can Canada be a leader?
I keep going back to that Report on Business article, and
the question about whether the engine of Canada's economy
could come undone because "no one thought about water."
Well, RBC is thinking about water.
Bay Street and Wall Street are thinking about water. And
like it or not, so are investors like T Boone Pickens, who's
buying up water rights throughout Texas to "mine"
water and export it to neighbouring states.
As pressure mounts on the world's limited water resources,
individuals, industries and governments will all have to start
managing our shared water resources better.
And that means there is a role for business in offering innovative
solutions to the challenge. That's where Canada comes in.
Before I get a sternly worded letter from Maude Barlow, I
should clarify that I'm not talking about privatizing water
here, or exporting Canadian water to the United States.
I'm not going to wade into the debate about whether water
is a commodity or a human right, or offer an opinion about
water policy, or the role of government.
But in the last few years, I've gone on record advocating
for Canada to focus on niche areas in which we can compete
globally. Some call this picking winners and losers.
In this global economy, Canada must find its winners—
and quickly, because the rest of the world isn't sitting still.
Competitiveness and productivity will determine where investments
Water could well be one of those winners for Canada.
I'm not sure if you saw the Conference Board's report on
its "Leaders Panel on Innovation Based Commerce",
released last month. They called for a new generation of Canadian
companies, headquartered in Canada, and creating good Canadian
jobs, focused on three "pathways'. One of those pathways
was water management.
I agree. Canada is well positioned to develop and commercialize
technologies to conserve, reclaim, rehabilitate and purify
The opportunities are limitless. The global water industry
is estimated at $400 billion a year and is expected to increase
to $1.6 trillion US in the next ten years.
The Great Lakes region is already considered one of the most
successful and vibrant water technology clusters in the world
with leading research institutions.
We've got a mature water tech R&D sector, as well as
world-class companies that are developing and selling technologies.
But we don't have the capacity to commercialize them so they
can compete globally.
The Conference Board recommends a national approach to water
infrastructure management, which would create capacity for
Canadian companies to offer fully developed solutions and
prepare those companies to compete globally with made-and-tested
in Canada technology.
Who will be the next Zenon? Right now, there could well be
a researcher or engineer, maybe at a university in Toronto,
or Waterloo or Hamilton, who's developing remarkable new ideas
related to water management. It's our job to make sure that
his or her knowledge can be commercialized in Canada, so that
the resulting jobs and wealth will flow to Canadians.
I can't imagine a more important legacy for our country and
our children than to incubate made-and-built in Canada solutions
to the water and energy issues that are plaguing the world.
To accomplish this, we must collectively create the right
framework to attract research, and create an environment where
new and innovative companies can succeed. We must collaborate
between sectors and across party lines, because every step
Every drop matters.
Every one of us has a role and a responsibility.
At RBC, this is what we call creating a 'blue water future."
Before I close, I want to read a quote from an RBC publication
that I ran across when preparing for tonight's event.
"Water is benevolent, when properly managed. It can
be productive and will support prosperous communities if
its flow is wisely used. Our water problems are the outcome
of our efforts to adapt our physical environment to our
economic and social needs, without reckoning sufficiently
on nature's unchanging ways. So, in spite of the fact that
Canada is richly endowed with water resources, we have no
room for complacency."
This quote is that it comes from a Royal Bank Letter called
"Life Depends on Water."
We published it back in 1950.
Some lessons take a while to sink in.
"Life Depends on Water." It's high time we remembered