With corporate awareness of water-related risk growing exponentially, so the demand for a standard means of measuring and reporting water usage increases. Katharine Earley explores current practice in benchmarking usage at a global level, and examines the tools and guidelines available to companies as they unravel the complex web of their water footprint.
Businesses are becoming more acutely aware of the potential impact that water-related issues could have on their operations, as highlighted by the CDP’s Global Water Report. However, there has been minimal change in terms of visibility of water strategies at board level, according to the report.
As the march towards a global standard in benchmarking water usage continues, the critical question of water stewardship may inevitably rise further up the agenda.
Common benchmarking challenges
Companies are starting to adopt a more holistic approach to measuring their water usage, taking account of the environment and communities in which they’re operating.
Typical measurements centre on annual water withdrawals within a company’s direct operations. The real challenges lie in measuring water usage across its supply chain (where the largest impacts occur) and distribution operations, and throughout its customer base. In particular, the absence of transparency within the supply chain and lack of direct control over suppliers make accurate measurement difficult.
The complexity of the measurement process means the collection and analysis of meaningful data is challenging, while the plethora of tools and guides available can be confusing.
Companies are also grappling with how to calculate their water impact in direct relation to the location from which it is sourced, taking into account other water users, whether the location is water-scarce or water-rich, and bearing in mind that the impact can only be mitigated in the same location.
Progress on water reporting
Nearly 75% of respondents to the CDP’s Water Disclosure Project are taking collective action to develop solutions to water-related challenges. Different sectors are responding at different rates, with some companies using a combination of their own standards (Nike, for example) along with internationally adopted guidelines.
The food and drink industries are among the most active in calculating water usage. Coca-Cola released its Water Stewardship Progressreport on World Water Day 2012 and aims to have water protection plans at its facilities by 2013 globally.
SAB Miller recently published its Water Futures Report, which outlines its water stewardship strategy and partnership approach to addressing local water management issues.
Top international guidelines
Water risk assessment is a hotbed of innovation, with many tools and guidelines being pioneered throughout the world. They all aim to create a rigorous framework through which companies can report their water impacts, via a series of strategic and operational questions. The sheer multitude of tools available could be perceived as an attempt at developing a globally accepted standard in itself.
An ISO Water Footprint environmental management standard is under development. This will quantify a company’s water footprint based on location-related weighting factors.
Meanwhile, the European Water Partnership has also developed a water stewardship standard for Europe, which aims to achieve and maintain sustainable water abstraction levels, ensure good water quality, protect high value conservation areas and promote equitable water governance.
The Water Footprint Assessment Manual, developed by the Netherlands-based Water Footprint Network (WFN), is a widely respected methodology for quantifying water usage. It deals with how to calculate green (rainwater that does not become run-off), blue (surface and groundwater) and grey water (waste water) footprints.
The CEO Water Mandate, developed by the UN Global Compact and the Pacific Institute, is rapidly gaining traction as a respected set of corporate guidelines, with 100 global companies endorsing it. The CEO Water Mandate published the Corporate Water Disclosure Guidelines in August 2012 to help harmonise approaches to disclosure.
“The CEO Water Mandate is not a specific scheme to be followed,” explains Peter Schulte, a research associate at the Pacific Institute. “Rather, it provides a qualitative framework for corporate water stewardship and plays an important role in developing research and guidance.”
Trade associations have also been active in establishing water-related benchmarks for their respective industry sectors, with those developed by BIER, the Federation House Commitment and the IGD among the most prominent.
Cutting edge water measurement techniques
- The Alliance for Water Stewardship is developing a voluntary standard to assess the sustainability of water management activities among industry and agriculture;
- The WBCSD Global Water Tool helps companies identify which of their global sites are in water-stressed areas and report to schemes such as CDP Water Disclosure, GRI, Bloomberg and the DJSI;
- The Aqueduct project, developed by the World Resources Institute, aims to create a Water Risk Atlas, an online database of water risk at sub-river basin level;
- The GEMI Local Water Tool aims to provide a framework for corporate organisations to assess their site water risks and define management measures;
- The Aqua Gauge, developed by CERES, helps companies to develop a water management strategy and benchmark against peers. It also helps investors assess the quality of corporate water management;
- Further tools include the WWF and DEG’s Water Risk Filter and a new ‘water footprint database’ to be designed by UK-based consultancy Sustain.
Driving action on water issues
“Companies are drawing on the different methodologies and tools available to develop targets for their organisations, including working with farmers to reduce water use, cutting water usage in manufacturing, evolving product design and changing consumer behaviour,” says Chris White, a water security consultant with Best Foot Forward.
Many corporate organisations are examining the relationship between food, water and energy, and analysing how to remain competitive in water scarce markets. Factoring in water risk when selecting suppliers, completing international transactions or responding to legislation is also becoming increasingly important.
Some companies are even developing their own tools to cut water usage. PepsiCo, for instance, is trialling a smartphone app that helps its potato farmers reduce their water usage through more accurate harvest predictions.
The UK’s Department for the Environment, Food and Rural Affairs (Defra) funds the Product Sustainability Forum (PSF), which informs decision-makers on the impacts of water use across the whole supply chain, and works with large grocery retailers and their suppliers to reduce these impacts.
It also funds the Rippleffect (water efficiency advice for SMEs created by the Environment Agency and WRAP) and the Federation House Commitment, and has published a report on water tools available to businesses.
Within its role as a regulator of heavy water usage sectors (such as energy, metals, minerals, and food and drink), the Environment Agency regularly analyses the potential for benchmarking as companies disclose their water usage. The organisation also actively promotes the use of resource efficiency tools and shares the latest techniques in effective water management.
“We share best practice examples as a positive alternative to benchmarking,” explains Lucia Susani, the Environment Agency's water management manager. "We do this via the Water Efficiency Awards and via our quarterly water demand management bulletins. We also communicate specific techniques within different sectors.”
While the water initiatives landscape is crowded, there is an increasing amount of collaboration taking place. Water measurement techniques are continually evolving, with respected international guidelines already in place, a European water stewardship standard available and an ISO standard in the pipeline.
Going forward, measuring both the water footprint as well as the severity of the impact on the location will be increasingly important.
Finally, experts concur that any insights gained from a water footprint analysis should be combined with environmental, social and economic factors in order to create a balanced and effective water stewardship strategy.
Katharine Earley is a freelance writer.