How can you use ESG reporting to reduce your water risk?

I remember one of my clients signing up for a water footprint certification from an agency in Germany. The industry was very water intensive and the organization used to forego reporting on its water management practices up until then. However, to beef up its credentials for the certification audit, the organization in water meters to measure and monitor its daily water consumption. This is not only helped them save water but they also realized the importance of water re-use and recycling in their quest for becoming recognized as a responsible corporate citizen.

You cannot control what you don′t measure. So in order to reduce your water risk you need to first know if there is a risk, and where. This step is particularly important for companies with multi sites. For example, if you have operations in Chile, probably your water risk is higher than in Norway. Use a tool to assess your water consumption and risk (like WWF Water Risk Filter) and move from there. Create a set of goals, enroll your leaders and your team and finally implement the actions !!! No plan is good if remains only a plan. Execute it. It harder than you think but much more important than you realize. Water is the next carbon. Enjoy the ride!!

here are 3 main challenges while assessing water footprint : 1-> Data and its quality such as water consumption and discharge especially across geographically diverse operations. 2-> Integrating water risk management and sustainability into the core business strategy 3-> Effectively engaging stakeholders (like local communities, regulators, and investors) and balancing their diverse expectations is difficult.

The first step in reducing your company's water consumption is to establish a baseline for how much water is being used. This can be achieved by collecting and analyzing your company’s water bills and usage records. With this data, you can determine the exact amount of water your company consumes over a specified period. This analysis is crucial for identifying areas where water is being wasted. Once these areas are pinpointed, you can explore alternative water-saving solutions or find more efficient ways to optimize your water use. This proactive approach not only helps in cutting down water consumption but also supports your company in becoming more environmentally responsible and sustainable.

Not sure I would agree with this framing. There is not even an approved Science-Based methodology yet! The short answer here is that targets must be informed by your strategy. Too often companies flip this and targets are informing strategy. A good (must) read is WWF’s Putting Water Strategy into Context.

For companies with high water usage, like beverage producers, establishing water-related goals is crucial. These targets should aim not only to reduce water withdrawal and enhance water discharge efficiency but also to decrease water intensity overall. By upgrading systems and adopting advanced technologies, these companies can minimize water leakage throughout their processes. Additionally, exploring alternative water sources is essential. This can include harvesting rainwater, desalinating seawater, and even extracting moisture from the air to supplement their water supply. Such initiatives not only contribute to more sustainable water use but also demonstrate a commitment to environmental responsibility.

To effectively implement water conservation measures, companies with high water usage must develop comprehensive water-related policies. These policies should extend beyond their own operations to encompass their suppliers and customers, fostering a holistic approach to water sustainability. Additionally, when planning new facilities, these companies should consider the environmental impact of their locations. Avoiding water-stressed areas and densely populated communities is crucial. By doing so, they not only mitigate their environmental footprint but also demonstrate a commitment to responsible water management and community welfare. This strategic approach to water usage reflects a deeper understanding of environmental stewardship.

Water reporting is valuable but it should also add value to the company. Too often we see companies reporting for reporting sake - spending hours of time and resources collecting data that ultimately does not add value for the company. So any voluntary reporting should be assessed to see how the metrics and data align with what needs to be collected to monitor progress towards the company’s strategic goals. Another common issue we see is reporting influencing strategy - so reporting metrics being co-opted as strategic metrics for the company because they are rewarded by the reporting framework. An example is the fact that so many companies have water reduction goals when it is often not their strategic water challenge!

Water risk assessment is essential component for sustainability reporting of the organisation (or firms). During planning phase, it is required to access multiple regional government databases to conduct risk assessments. Such databases help to identify higher-risk environmental features such as municipal water intake locations and recharge areas for municipal drinking water supplies. Provides insights into subsurface conditions, the depth of groundwater in various locations and the proximity of regulated areas (such as floodplains and fill line areas) to mitigate water risks. Challenge is such databases do not exists for every firm/country and impacting water progress report due to non availability of right data.

This should be way, way earlier. Also agree with WWF Rylan on Strategy and then Targets. As this is sequenced it is 'Company X does a water footprint, has no strategy, decides what its targets should be, tries to meet them, measures progress and tells communities and regulators what its done'. Water is a SHARED resource. Its also something that primarily sits outside a company, which can be contested. Assess company footprint, assess specifics of high risk locations, gather data and understand internal and external context, actively speak to stakeholders, global and local, set a strategy (that includes targets), implement, evaluate, improve. Much of this, the site/catchment stuff is exactly what the AWS Standard was designed to guide.

Set ambitious & measurable water reduction targets for your operations. This demonstrates your commitment to responsible water management & motivates action across the organization Implement water-saving technologies & processes throughout your operations. This can include rainwater harvesting, greywater reuse, & advanced water treatment systems Cultivate a culture of water stewardship within your organization. Encourage water conservation efforts, raise awareness among employees, & recognize individuals & teams who contribute to water saving initiatives Engage with stakeholders such as suppliers, customers, and communities to understand their water concerns & collaborate on joint solutions. This cultivates transparency & builds trust

According to the 2020 State of Green Business GreenBiz Report, there has been an average annual increase of 9% in water usage since 2015, observed both in U.S. companies and on a global scale. Furthermore, the costs associated with water pollution have almost doubled since 2014. Hopefully, with new indicators and metrics provided by GRI/SASB, will offer more goal-oriented metrics. These tools are expected to be instrumental in monitoring water quality, consumption, and leakage, thereby playing a pivotal role in water conservation efforts.

Too often companies only consider the basin risk (e.g. the external water challenges) and forget the operational risk (e.g. the internal context of water). Without both you can’t accurately determine risk. For example - you could operate in a place facing high levels of wage scarcity but if you don’t need large volumes of water for your processes then water scarcity may not be your biggest risk. Too often we see companies saying they are taking action in all sites located in scarce locations but often many of these site actually face low risks due to the fact they are not heavily reliant on water.