By ESG Analyst Taran Franck
Water is arguably one of the most important natural resources for all living things. For us, a functioning water systems are one of the technological pillars of civilisation, which makes a water crisis often a matter of life or death. Today, approximately 2 billion people do not have access to safe drinking water and roughly half the world’s population experience severe water scarcity for a portion of the year. Our limited freshwater resources are already overburdened by growing populations and the water-intensive agricultural industry, which consumes 70% of the world’s freshwater supply every year (~2 quadrillion gallons!) Concurrently, climate change is exacerbating these challenges – rising temperatures increase water scarcity, diminish water quantity and quality and increase the strain on our water infrastructure. Therefore, in order to achieve SDG 6 “Clean water and sanitation for all”, corporations are under increasing pressure to reduce their water usage, especially in high water-stress regions. There are three domains in which companies can influence a positive change to help mitigate water stress: direct operations, supply chain and overall water basin health.
- DIRECT OPERATIONS:
Companies can have a direct influence on reducing water stress by proactively implementing water measurement practices. The very act of water reporting allows companies to identify and mitigate water inefficiencies within their operations, manifested in water-intensive processes, water leaks and poorly managed infrastructure. Water efficiency can further be improved by implementing new technologies which optimise water use.
Real-World Example: “In 2010, Ford set a goal of using 30 percent less water per car by 2014. It reached that goal through a combination of new KPIs and operational improvements. The introduction of internal water metering alone drove conservation behaviours to the department level and helped save around $5 million worldwide. A dry-paint-spray system eliminated water from the car-painting process, and a new lubricant that replaced water in the manufacturing process saved about 280,000 gallons per production line.” – McKinsey and Company
- SUPPLY CHAIN:
Companies can indirectly reduce water stress by using their position and influence in the supply chain to ensure that their suppliers and other players within the supply chain are equally rigorous about their own water usage. The three leverage points are: reducing fossil fuel use and transitioning to renewables, setting supplier standards and expert assistance in implementing efficient water solutions. Water is required in the extraction of many energy sources and in the generation of energy through steam-powered turbines. Fossil fuels production therefore requires up to four times more water than renewables.
Real-World Examples: “In 2014, Levi Strauss launched a Recycle & Reuse compliance program, which requires that each supplier meet certain limits; use a blend of at least 20 percent recycled water in its facility processing, landscaping, cooling, and plumbing; and provide flow-meter data that tracks the amount of recycled water used on Levi Strauss products.” – McKinsey and Company
- WATER BASIN HEALTH:
Corporations can go even further by using their influence in partnerships that promote water resilience. For example, joining the Water Resilience Coalition (WRC) is a way for companies to have a binding commitment to a set of water goals. Launched in March 2020, this initiative of the CEO Water Mandate has an explicit mission to rapidly enhance efforts to address the global water crisis in regions with significant water stress. This initiative engages senior leadership of leading corporations directly in its activities. Examples of signatory companies: 3M, ABinBev, Cargill, Microsoft, Starbucks, Kurita, Ecolab, GSK, Meta, PepsiCo, Levi Strauss & Co etc.
WRC 2030 Ambition:
1) Achieve positive water impact in over 100 water-stressed basins that support over 3 billion people
2) Enable equitable and resilient water, sanitation, and hygiene (WASH) for over 300 million people
WRC 2050 Pledge:
1) Achieve Net Positive Water Impact (graphic below) in 150 water-stressed basins
2) Develop, implement, and enable new strategies for water-resilient value chains
3) Raise the global ambition on water action
Source: https://ceowatermandate.org/resilience/net-positive-water-impact/
TOOLS FOR IDENTIFYING WATER IMPACT:
1. Water Footprint (WF)
Definition: “The water footprint measures the volume of water used to produce each of the goods and services . It can be measured for a single process, such as growing rice, for a product, such as a pair of jeans, for the fuel we put in our car, or for an entire multi-national company. The water footprint can also tell us how much water is being consumed by a particular country – or globally – in a specific river basin or from an aquifer” – Water Footprint Network
WF is seen as a useful framework for understanding a company’s water use, and in turn, identifying related water risk “hotspots” in the products, facilities, and/or supply chain of said company. WF is quite effective for “big picture” strategic planning purposes and for helping companies prioritise actions and set long-term water objectives and targets. Water Footprint is measured in 3 scopes:
- The Green Water footprint measures water from precipitation that is stored in the root zone of the soil and evaporated, transpired or incorporated by plants. It is particularly relevant for agricultural, horticultural and forestry products.
- The Blue Water footprint measures the volume of water that has been sourced from surface or groundwater resources and is either evaporated, incorporated into a product or taken from one body of water and returned to another, or returned at a different time.
- The Grey Water footprint measures the amount of fresh water required to dilute pollutants to meet specific water quality standards. The grey water footprint considers point-source pollution discharged to a freshwater resource directly through a pipe or indirectly through runoff or leaching from the soil, impervious surfaces, or other diffuse sources.
Source: https://www.watercalculator.org/resource/teach-beyond-the-water-cycle/
2. WBCSD Global Water Tool
Similar to water footprinting, the WBCSD Global Water Tool also identifies water risk “hotspots.” However, while WF delves into the nature of company water use (blue, green or grey) to help identify and characterise risks, the WBCSD Tool emphasises geographic location as the primary basis for a qualitative assessment of relative water risks. The Tool is typically used by companies seeking to identify “hotspots” across global operations by comparing sites’ relative water stress. This allows companies to prioritise their mitigation activities on facilities in water-stressed areas which are presumably more likely to pose water-related risks. It does not provide an in-depth system analysis for companies to account for water use or impacts. Instead, it provides companies with a series of data and maps that reflect country-level and watershed-level data and help identify risk. Some metrics used to quantify magnitude of risk based on the local water context include:
- Mean annual relative water stress index
- Access to improved water
- Access to improved sanitation
- Annual renewable water supply per person (1995 and projections for 2025)
- Ratio of industrial to total water use
The Global Water Tool allows companies to evaluate each of their facilities based on these metrics. For instance, a company can use the Tool to determine what percent of its operations or suppliers are in regions considered to be under water stress or the percent of its employees who live in countries where populations have low/high levels of access to improved water and sanitation. By providing these indicators for each of a company’s operations or key suppliers, the Tool helps to identify and characterise risks on a site-specific basis.
References:
- “Beyond the Water Cycle: Teaching about Water Footprints.” Water Footprint Calculator, February 8, 2023. https://www.watercalculator.org/resource/teach-beyond-the-water-cycle/.
- Company, Ford Motor. “Ford Targets 30 Percent Water Reduction per Vehicle.” PR Newswire: press release distribution, targeting, monitoring and marketing, June 30, 2018. https://www.prnewswire.com/news-releases/ford-targets-30-percent-water-reduction-per-vehicle-136423208.html.
- Experts, HTT. “Water Usage in the Agricultural Industry: High Tide Technologies.” High Tide, September 29, 2020. https://htt.io/water-usage-in-the-agricultural-industry/#:~:text=As%20previously%20mentioned%2C%2070%25%20of,in%202%20feet%20of%20water.
- Fact sheet – food and water. Accessed April 9, 2024. https://www.ipcc.ch/report/ar6/wg2/downloads/outreach/IPCC_AR6_WGII_FactSheet_FoodAndWater.pdf.
- Hundertmark, Thomas, Kun Lueck, and Brent Packer. “Water: A Human and Business Priority.” McKinsey & Company, May 5, 2020. https://www.mckinsey.com/capabilities/sustainability/our-insights/water-a-human-and-business-priority.
- Levi Strauss & Company. “Laundry-Recycle-and-Reuse-Manual-LSCO-2016.PDF.” Levi Strauss & Company Recycle & Reuse Standard and Guidelines. Accessed April 9, 2024. https://www.levistrauss.com/wp-content/uploads/2019/03/Laundry-Recycle-and-Reuse-Manual-LSCo-2016.pdf.
- “NPWI (Net Positive Water Impact).” Water Resilience Coalition. Accessed April 9, 2024. https://ceowatermandate.org/resilience/net-positive-water-impact/.
- “SDG Indicators.” United Nations. Accessed April 10, 2024. https://unstats.un.org/sdgs/report/2022/Goal-06/.
- Water Footprint Network. “What Is a Water Footprint?” Water Footprint Network. Accessed April 9, 2024. https://www.waterfootprint.org/water-footprint-2/what-is-a-water-footprint/.