Water is your business, whether you know it or not. The World Economic Forums 2022 Global Risk Report lists natural resource and water crises among top 10 severe global risks in the next 10 years. Also, if current trends continue according to UNEP, the world will face a 40 percent freshwater shortfall by 2030. This will put mounting pressure on governments and companies to reduce their consumption due to water scarcity. Increasing water stress will also derail efforts to ensure availability and the sustainable management of water and sanitation for all. According to UNICEF, SDG 6 already has the greatest capacity gap of all 17 SDGs.
The many facets of water risk
An Ecolab-GreenBiz Survey found that companies need to rethink their water management strategies. The survey showed that for 74 percent of the 86 survey respondents, water is an increasing priority. And 59 percent agreed that water is a growing business risk.
The questionnaire also looked at companies that currently have plans to achieve water goals. About 44 percent responded saying they have no plan. When asked whether they hoped to take active steps to manage water use in the next three years, 88 percent responded positively. This shows a clear gap between ambition and action.
The water risk companies face has many facets. When mapping water risks it is important to consider water stress, not just water scarcity. Stress encompasses availability, quality and accessibility, while scarcity looks at mainly water availability.
Often, the first step companies take is to identify water stewardship activities material to their business operations. Understanding indirect water stress factors on water basins such as economic development and climate change is also important as a combination of the company activities and the basin situation will manifest into physical, reputational and regulatory risks for the company.
Advancing business water resilience
Water resilience is the ability to adapt water systems to deal with current and future stress. Creating water resilience at the basin scale will require coordination, transparency and alignment between the major stakeholders — public, private and civil society. The CEO Water Mandate, in partnership with the Alliance for Global Water Adaptation (AGWA), International Water Management Institute (IWMI), World Resources Institute (WRI), and Pacific Institute (PI), have embarked on a journey to develop a common framework to develop basin water resilience.
The Water Resilience Assessment Framework (WRAF): Corporate Guidance provides a standard, step-wise approach to measuring and enhancing resilience across industries. The systematic approach enhances resilience by understanding and addressing shocks and stresses within three categories of resilience strategies: persistence; adaptation; and transformation. The guide provides a set of water resilience indicators and a user-friendly excel resilience scoring tool for corporates to select key resilience indicators.
In 2021, the World Wildlife Fund (WWF) published Putting Water Strategy Into Context, a practical guide to help corporations understand the strategic nature of water within their value chains and establish more meaningful actions, goals and targets. The guide was originally developed for H&M, but it can be applied to other corporations.
Companies taking action
The corporate footprint on water is huge. It is estimated that two-thirds of all freshwater resources go into the production of ingredients for corporate supply chains, from food to chemicals. The good news is more companies are starting to set contextual and science-based water targets, while encouraging their own supply chain to follow suit. For instance, below are two examples of companies taking action in water stewardship.
With the climate crisis looming as a business, you have a choice to do nothing, and face climate and water-related risks intensifying by the day, or you can become a water steward working within your own company.
In the apparel sector, Levi Strauss & Co has committed to reducing water use in manufacturing. Vital because a single pair of jeans can use up to 3,800 liters of water. Levi’s hopes to reduce freshwater use in manufacturing by 50 percent in areas of high-water stress by 2025 (against a 2018 baseline). The company has also launched a project called Water In the tech sector, Intel formulated a global water policy in line with SDG 6, SDG 9, SDG 12 and SDG 13. Intel has committed to 100 percent water restoration by 2025. The group wants to go beyond by setting a new 2030 goal to increase their water conservation and achieve net-positive water use. This is where Intel restores and returns more freshwater than it takes in. Achieving net-positive water use will require collective action with external water restoration projects. In Sri Lanka, 12 leading corporations who are part of a water stewardship working group attended a UN Global Compact presentation on water stewardship. They shared that their top five business water stewardship activities are increasing water efficiency, reducing water pollution, supporting and support good public water governance, improving water sanitation and hygiene services for workers and encouraging suppliers to improve water performance. Presentations such as these help companies prioritize water stewardship activities based on their business strategy. There are a range of stewardship activities to consider across your business, both within the factory fence and outside — whether it’s in the basin in which you operate directly or within your value chains. As of November, 228 companies have started down the path to be a water steward by joining The CEO Water Mandate, a UN Global Compact initiative implemented in partnership with the Pacific Institute that mobilizes business leaders on water, sanitation and the Sustainable Development Goals. The CEO Water Mandate proposes six core elements of stewardship: Endorsers of the CEO Water Mandate commit to continuous progress against the six core elements of stewardship and in so doing understand and manage their own water risks. Within the endorsing companies, a niche group of 30, including DOW, Gap Inc, Starbucks and Microsoft, have formed the Water Resilience Coalition (WRC). The coalition was founded in 2020 and is an industry-driven, CEO-led coalition, which aims to elevate global water stress to the top of the corporate agenda and preserve the world’s freshwater resources through collective action in water-stressed basins and ambitious, quantifiable commitments. The coalition recognizes that corporate actions on a basin level must be tackled collectively. A single company can have efficient water operations, but it would not address the overall basin challenges such as depleting freshwater or increased levels of pollution. In line with this, the CEO Water Mandate has launched the Water Action Hub 4.0, a tool that facilitates partnerships through projects. With the climate crisis looming as a business, you have a choice to do nothing, and face climate and water-related risks intensifying by the day, or you can become a water steward working within your own company. As a water steward, you will join hands with others to accelerate collective action for water resilient future. Initiatives such as the CEO Water Mandate will help you along this journey. Are you a water steward?
