Business claims to take drought seriously, but many have no idea how much water they use and where. This is why they should act

Under the new Sustainable Development Goals, 193 countries have pledged to deliver water for all by 2030. With the UN recently publishing a list of indicators to evaluate progress, now is the time for the business sector to step up and contribute.

Why should companies care about water?

Data from the US space agency Nasa reveals that 13 of the world’s 37 most important groundwater basins are being depleted far faster than they can be recharged.

This has a major impact on business, say water experts. Agriculture accounts for 69% of global water use, with industry claiming a further 19%. At an operational level, water scarcity pushes up water rates, as is happening in drought-hit California. Water is a potentially toxic brand issue too. Take Coca-Cola, whose image has come in for criticism for its alleged over-use of groundwater in various Indian bottling plants.

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Are companies setting water targets?

Despite a string of widely reported droughts in recent years, the private sector still generally treats water as though it were an abundant resource. Don’t underestimate companies’ sheer ignorance about their own water use either. “A lot of businesses have no idea how much water they consume nor where that water comes from, where it goes or what their exposure to water-related risks are,” says Morgan Jones, an associate director at the Carbon Trust, which has developed its own water certification system.

The ones that do know are setting a variety of targets. SAB Miller aims to use three litres of water per litre of beer (it currently uses 3.3 litres). Swiss food giant Nestlé says it will reduce the water consumption in all its European production sites by 40% by 2020 (compared to 2010 levels), while Coca-Cola has pledged more opaquely to “replenish” all the water it uses.

Do corporate water targets make sense?

Unlike carbon dioxide, where a tonne of emissions has more or less the same impact on the atmosphere wherever it occurs, the effects of water consumption are highly localised. When and where water is used matters. How a maize-farmer consumes groundwater in drought-hit Mozambique has different implications to, say, how a water utility company draws from an aquifer during the dry season.

When companies think of their water “footprint”, most have in mind the gallons they use in their factories, stores or offices. But that accounts for only a small part of the picture. What about the water that went into growing the cotton for the T-shirts a manufacturer stitches and sells? Or the vast quantities of water that go into washing those same T-shirts?

“However efficient you are within the four-walls of your operation, if the water basin you depend on is mismanaged then your business will still be at risk,” says Jason Morrison, head of the CEO Water Mandate.

What would meaningful water targets look like?

Targets must respond to where a company’s main impact lies. Cate Lamb, head of the water programme at CDP, an investor-led data transparency organisation, cites the example of a chemical company that sets tough reduction targets for its water use but says nothing about water quality or contamination.

The targets need to be genuinely ambitious. US retailer Target, car-maker Ford and beverage giant Coca-Cola are among those to have announced the early achievement of their water goals. According to Lamb, 98% of the large companies submitting data to CDP last year claim to be on track with their internal water targets. It’s difficult to shake off the sense that the bar is being set way too low.

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They also need to be locally specific. So argues Paul Reig, a water specialist at the World Resources Institute (WRI), a US non-profit: “They [corporate commitments] must account for the unique watershed and aquifer conditions at each location across a value chain, from raw material sourcing to manufacturing and consumer product use.”

Any global industry using raw resources, for instance, is potentially affecting hundreds of individual watersheds. One way of simplifying the challenge is to identify water “hot spots” and prioritise actions there, an approach adopted by Anheuser-Busch InBev, for instance. The Belgium-based brewer requires all its operations in water-stressed regions to set up or join watershed management initiatives.



Is there any sign of change?

Some initial industry standards are beginning to emerge around water efficiency, with ISO 14046 perhaps the best known. Experts are also debating measurement methodologies on forums such as the Water Footprinting Network. Talk of “science-based targets”, already widespread in the carbon debate, is beginning to gain momentum, too. Groups such as WRI are currently pushing hard to force the topic up the water policy agenda.

Accurate information about individual watersheds is imperative to local water management efforts. In much of the world, such hydrological data simply doesn’t yet exist. The Murray-Darling Basin in south-eastern Australia provides a stellar example of how government action can correct this. Companies can contribute too. In California, for instance, US food giant General Mills is working with various environmental charities to map hydrological conditions in the Los Angeles River and San Joaquin River watersheds.