Water is one of the most pressing challenges of the 21st century. It’s critical to human health and the planet, and yet so poorly managed. Based on current trends, the UN has predicted we’ll be facing a 40% shortfall in global water availability by 2030. It sounds like a water crisis is looming, but it’s actually already here. Today, one in nine people lack access to safe water and our freshwater ecosystems are being severely damaged by human activities.
Recognition and concern around the issue has been steadily growing. The water crisis was found to be the top global risk of highest concern for the next 10 years by The World Economic Forum. Businesses are starting to wake up to the importance of water, recognising its value as a crucial resource and taking notice of the growing risks. It’s reflected in the dramatic increase in the number of companies reporting water data to CDP, growing more than ten-fold since 2010.
Investors are also demanding better water disclosure, as the risks to businesses become apparent. Companies reported US$14 billion in water-related impacts in 2016, which was a five-fold increase from the year before. Furthermore, companies expect over half of the 4,416 water risks they identified to materialise within the next six years.
As water has risen up the corporate agenda, it’s been promising to see the improvement in water reporting. The World Business Council for Sustainable Development (WBCSD) recently published Reporting matters: Water deep dive analysis in partnership with Radley Yeldar. The research takes a closer look at state of water reporting across 158 leading companies in over 17 sectors and 31 countries. It found that over half of companies consider water to be a material issue, and of those companies 91% are reporting on water-related indicators. CDP also reports that water disclosure is improving, with more companies than ever before achieving A List status.
But water is a hugely complex and multi-faceted issue. Some parts of the world are grappling with water scarcity and drought, while others are trying to manage excess water in the form of intense rainfall, floods and storm surges. On top of vastly varied local contexts, different industries also have varied interactions and impacts with water. For example, in the water intensive mining industry, the focus is on water efficiency and consumption. On the other hand, the fashion industry is facing growing pressure to address water pollution from things like discharge of dye wastewater and microfibres.
Against this backdrop of complexity and increasing urgency, is water reporting reflecting the diversity of challenges that corporates face? There’s certainly room for improvement. Here are three things companies can do to provide a more complete picture of their interactions and impacts on water.
- Look beyond water use measures and choose key performance indicators that best capture your key impacts and risks.
The 2017 CDP Global Water Report found that reducing water consumption was the most commonly set target by companies, closely followed by reducing product water intensity and water withdrawals. This reflects what we’re seeing within companies’ sustainability reports too – where the default is often to simply report on water use. Water use may be the easiest number to measure, but depending on the company’s context it’s not necessarily the most meaningful.
- Ground your water disclosure in the context of your industry and the local water conditions that affect your organisation's approach to water management.
Businesses need to consider their impacts and interactions with water both within their direct operations and their supply chain. CDP found that in 2017, only 20% of companies were developing a comprehensive view of their water risk exposure. Completing a water-risk assessment can help you to identify these impacts, and inform your water strategy.
- Set ambitious targets and goals that are appropriate for your context.
CDP reports that while 56% of companies have set water targets or goals, most are short-term and do not adequately account for the sustainable thresholds of the basins on which they rely.
Radley Yeldar’s Sustainability goal setting beyond 2020 sets out some helpful principles for defining relevant and imaginative goals, which can help in setting ambition for your water strategy.
To achieve a water-secure world, corporates urgently need to improve their management of water. Providing a more complete picture of the way organisations interact with and impact on water is an important first step. Powered by WBCSD, The Reporting Exchange contains a wealth of resources to support companies in reporting and disclosing their impact on water. It’s a freely available resource, and a great place to start.
This article originally appeared in Business Green.