To ensure the continuity of their operations, as well as contribute to the resilience of the watersheds that sustain them and the local communities they interact with, companies need to identify, quantify and ultimately act upon water risks in their supply chains.
Water stewardship allows companies to manage risks
It is important to note that these risks are not constrained to a business’ direct operations — they arise all along the value chain. Indeed, when Unilever conducted its own water footprint, it identified two main hotspots beyond the scope of its own operations: Consumer product use accounts for 85 percent of Unilever’s water footprint, while agriculture weighs in at 15 percent. Acting upon these metrics, Unilever revisited its products to help consumers cut their water consumption¹ and worked with farmers to introduce water-conscious solutions.²
Quantis uses the ISO 14046 and ISO 14073 norms to walk companies through the practicalities of evaluating their water footprint across their products’ entire lifecycle. Quantis’ foundational expertise in life cycle assessment allows teams to model a business’ entire value chain, providing insight into key water-related hotspots, stressors and pollutants. This information is essential for creating and prioritizing action plans.
Quantis suggests a 3-point approach to drive water stewardship across the value chain:
1+ Assess and quantify potential water risk factors both diverse and tied to a local context
2+ Set ambitious goals through context-based water targets
3+ Work collectively on water stewardship challenges
1+ Assess and quantify potential water risk factors.
These risks are tied to a local context and are present in various forms:
- Physical risks: diminishing resource availability, pollution and acute sensitivity of receiving waters, climate change-related impacts;
- Regulatory risks: lacking water catchments governance, regulatory evolutions;
- Reputational risks: brand image, local activism…
Once identified, businesses need to assign a financial value to risks and get a clear picture of their corresponding impacts (environmental, social…) and opportunities (reduced expenditure, compliance with regulations, stakeholder dialogue…). To facilitate this process for major energy operator Total, Quantis developed the Wat-R-use Assessment Tool. The multi-criteria tool permitted Total to shift from an empirical and perception-based decision-making approach for investment around water reuse to one that is systematic and context-based.
Efforts such as these are expected to gain traction as global databases reach the appropriate level of detail and accuracy. In the interim, a good starting point for businesses looking to assess and quantify water risk is to tap their site managers, EHS teams and stakeholders for the data they collect. Accessing tools such as Aqueduct, the Water Risk Filter, GEMI Local Water Tool and Water Risk Monetizer can also be useful.
2+ Set ambitious goals through context-based water targets.
Water challenges, by nature, are highly localized. As such, water stewardship targets and plans should be focused on addressing issues at the local level. There is no one-size-fits-all solution for managing water issues. Context-based water targets³, however, offer a way for companies to structure corporate water stewardship plans and develop solutions that take into consideration concerns at the local level. For instance, in areas where water pollution is present, local industry must work together to set targets and reach ambient water quality standards. Where water access presents a challenge, companies would be well advised to work with local communities through water sanitation and hygiene programs.
In a nutshell, businesses need to align with UN Sustainable Development Goal 6, which addresses water stress, pollution, ecosystem protection, access to water and sanitary infrastructures, as well as resource governance. Mars, Incorporated is one company that has begun taking action to protect and improve water availability as well as eliminate unsustainable water use throughout its extended value chain. The US-based global confectionery, food products and pet food manufacturer worked with the World Resources Institute (WRI) to set and advance standards for context-based water targets and now aims to ensure water consumption across its value chain remains below the limit of what is annually renewable.
3+ Work collectively on water stewardship challenges
Equipped with an acute understanding of their water risks, businesses can create effective action plans. However, given the shared nature of water challenges, interventions need to address internal company actions as well as external catchment-wide conditions to maximize impact. Companies must responsibly share the resources they use, co-develop solutions with local stakeholders and support the development of sound public water policy.
Looking ahead, businesses will need to work with local farmers and other key value chain actors to implement water-conscious approaches and ensure water resources are sustainably used. As early as 1992, bottled water producer Evian initiated a collaborative resource management plan with watershed users, including local communities and farmers. As a result, farmers were supported in maintaining the local cheese production, applying the latest techniques to increase their milk production and meet European standards. Reducing the impact of agriculture ultimately led to an increase in smallholder income, all the while safeguarding the long-term purity of the Evian mineral water.
Diageo, The Coca-Cola Company and PepsiCo5 have also been working extensively with the communities in which they operate, most notably through replenishment programs, raising the bar for more and more companies to commit to water balance.
Now is the time to activate water stewardship
Moving beyond impact assessments, context-based water targets guide companies toward water balance. To support businesses in these efforts and allow for a framework to assess the benefits of water stewardship in a comparable way, partners WRI, Valuing Nature, Quantis and Limnotech developed the Volumetric Water Benefit Accounting (VWBA) Methodology. The VWBA enables companies to measure the impacts of investments in water stewardship and associated contributions to shared outcomes across a catchment using science-based metrics. Using the methodology stakeholders are able to quantify to what extent their water stewardship actions contribute towards the achievement of SDG 6.
The methodology aims to support organizations in four key areas:
- Investment decision-making: by quantifying the benefits of water stewardship initiatives based on the desired outcomes and impacts
- Monitoring and reporting: by providing comparable metrics to measure the benefits of water stewardship activities across impact areas, sectors and geographies
- Water risk mitigation: by responding to shared water challenges and delivering shared benefits where and when it matters
- Advancing public policy objectives: by aligning water stewardship investments and outcomes with global public policy priorities and the Sustainable Development Goals
In 2021, the methodology has been complemented by a Practical Guide to Implement Water Replenishment Targets providing a practical resource to facilitate the application of the VWBA method.