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    Corporate Water Targets: A New Approach

    By Tien Shiao

    Screen Shot 2017-05-20 at 8.32.06 PM

     

    Water risks once again rank as one of the top 10 global risks in the 2016 World Economic Forum’s annual report.

    Screen Shot 2017-05-20 at 8.22.58 PMBecause of this, more and more companies view water as a business risk and water stewardship as a solution. As such, they are looking to find ways to measure their performance and progress. However, current methods for creating water stewardship metrics that evaluate on-the-ground projects are inadequate.

    Corporate water targets are often developed with various objectives in mind. Sometimes they are used to demonstrate the company’s leadership to external audience. Sometimes they are used to inform and inspire employees internally. Sometimes they are used to align water efforts across the company’s operations in various regions. And sometimes they are used to mark the company’s contributions to addressing global challenges.

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    Finding ways to align corporate water targets to public policy and international global policy, such as the Sustainable Development Goals, ensures corporate water targets address global water challenges. At the same time, each river basin is unique and requires a unique type and degree of action. This complexity of understanding and responding to local needs, while also contributing to global development goals brings a great deal of complexity to corporate water target setting.

    That’s why CDP, UN Global Compact CEO Water Mandate, Nature Conservancy, World Resources Institute and WWF published a new discussion paper calling for a new approach to set context-based corporate water targets. We believe through creating guidance on the topic, we can assist companies in navigating this complex, yet vital, water stewardship challenge.

    What are Context-Based Water Targets?

    Context-Based Water Targets were inspired by Science Based Targets for climate change, where companies set corporate targets consistent with the right level of carbonization based on science.  This approach allows companies to make an appropriate contribution to the overarching goal of limiting warming to less than 2°C.

    Screen Shot 2017-05-20 at 8.25.11 PMContext-Based Water Targets, therefore, recognise the physical and social thresholds of the relevant river basin and track water use relative to the basin’s thresholds/availability and its alignment with public policy and other water goals.

    One example might be a facility’s water use goal developed as a fair share of the basin’s water resources.  One of the challenges is determining fair share allocation, which is typically set by the public sector considering multiple variables including environmental flows. By using each basin’s unique conditions to inform targets, companies can establish performance targets that contribute not only to public policy objectives, but also to a basin’s water risk reduction. This approach helps companies effectively mitigate water risk and secure sustainable clean water supplies.

    Value of Setting Context-Based Water Targets

    Developing a common approach to context-based water targets  will offer value to both companies and their stakeholders by addressing:

    • Existing integrated basin management priorities and goals – Water stewardship targets are most effective when established in a social, economic, environmental, and political context in which food, energy, water, and ecosystem security for all is in balance.
    • The local basin context – Meaningful targets are more sustainable when founded in scientific understanding as well as in the socioeconomic, political, and hydrological context to ensure sustainability. It is also more sustainable when possible targets align with ongoing public policy dialogues and company initiatives.
    • The multi-issue nature of water – Water stewardship outcomes tend to be more lasting when they align with the six areas outlined in Sustainable Development Goal(SDG) 6, consider linkages to the water-food-energy-ecosystem nexus, and drive social and economic development within local contextual constraints.
    • Equitable allocation methods rooted in good water governance – The attainment of corporate-based water targets (CBWTs) tends to be more successful when (1) informed by the sustainability of the basin and the company’s share of responsibility, and (2) tied to notions of good water governance and other shared basin goals. Arriving at shared goals and responsibilities may be formal or informal, but it is central to basin sustainability.
    • Data constraints and needs – Data remain a critical element in any context-based target approach. Any proposed approach tends to be more effective when based on a realistic assessment of what data is available for all stakeholders in the near-term, as well as, when possible, ongoing links to data monitoring systems and sharing water data.
    • The need to be company-relevant – CBWTs tend to be more effective when they are applicable for company decision-making and corporate strategy, including scenario analysis and horizon planning, and when they tie back to actual water risk and investor concerns. Target setting must be supported by measurable, meaningful, and pragmatic methodologies for companies across a full value chain, from raw material sourcing all the way to consumer product use.

    How can Companies Develop Context-Based Corporate Water Targets?

    Companies can develop more impactful corporate water targets by considering the basin’s local context, including a scientific foundation, aligning with public and private sector initiatives, and involving stakeholders.

    Screen Shot 2017-05-20 at 8.25.20 PMThis is shown through WRI’s work with Mars who identified science-based corporate targets to track the company’s progress. WRI recommended using a scientific foundation of total water withdrawals within the watershed that should be at or below 40 percent of the annual average renewable available supplies as identified by the UN water stress scale.

    Local engagement with government and river basin stakeholders was required to understand the specific targets for each watershed and the percentage of reduction of water users based on sector (e.g., domestic, industrial and agricultural). Thereafter, Mars established watershed targets to reduce the fraction of water withdrawals that are in excess of 40% of renewable supplies. Other useful company examples are laid out in the blog, “Thirsty for Change: 4 Way to Improve Corporate Water Targets.”

    Screen Shot 2017-05-20 at 8.25.31 PMWe recognise that a shift to context-based water targets will not occur overnight. Furthermore, we recognise that these changes are not starting from scratch; companies have a long history of working on water issues in context and, indeed, acknowledging context in their water targets.

    We believe that a continuum of approaches (see image below) will likely be required as companies shift from contextual to stronger forms of context-based water targets that include more robust, consensus-driven processes.

     

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    Currently, we are looking for companies that are interested in pilot testing the Context-Based Water Targets approach or to participate in the Advisory Committee or the Stakeholder Consultation Group.

    Don’t you think it is time to join this important and timely endeavour?

    Further Reading

    • The Future Of Sustainability Reporting – With GRI replacing G4 guidelines with the first global sustainability reporting standard, we sat down with Global Reporting Initiative’s Ásthildur Hjaltadóttir to learn what this means & future trends in disclosure
    • Pearl River Delta: 5 Water Must-Knows – China’s Pearl River Delta generates 9% of GDP but water challenges lurk behind the dazzling economic success. Don’t know what these are? China Water Risk’s Feng Hu shares 5 water must-knows for the region
    • Why Should PRD Business Lead In Water Stewardship? – With the Pearl River Delta set to lead China’s economic growth, China Water Risk’s Feng Hu & the Alliance for Water Stewardship’s Zhenzhen Xu explain why business should adopt water stewardship to ensure continued prosperity
    • Water Stewardship In Industrial Parks: TEDA Pilot – Industrial parks generate 22.5% of China’s GDP but can this last given water security and pollution concerns? An Chen, from the TEDA Eco Center & Zhenzhen Xu from the Alliance for Water Stewardship show how the Tianjin Economic-Technological Development Area leads in mitigating these risks
    • Developing A Global Water Stewardship System – Alliance for Water Stewardship’s Zhenzhen Xu, Ma Xi & Michael Spencer introduce the first ever global water stewardship standard and share lessons learnt from Ecolab’s pilot at their Taicang China chemical plant
    • Water Stewardship: The Impact To Date – A new report finds there has been little evolution from business -as-usual in regards to water management. What behaviours need to change? How can this be achieved? We sat down with report authors James Dalton from the International Union for Conservation of Nature (IUCN) & Peter Newborne from the Overseas Development Institute (ODI)
    • Innovating Water Stewardship Through Business Ecosystems – William Sarni, water stewardship expert, on the need for innovation in water strategies in order to better position for 21st Century water risks. Sarni points to “business ecosystems” as the driver for this innovation and value creation
    • Managing the World’s Liquid Asset – Water – Savvy investors now recognise water as a business risk yet there is still no agreed global standard & framework for sustainability reporting. Biswas, Tortajada & Chandler on why corporates & governments must do more to change the culture & mindset over the use of water
    • Water-nomics: Trade-offs Along The Yangtze – With significant economic, water use and pollution disparities along the Yangtze River, China Water Risk & the Foreign Economic Cooperation Office of the Ministry of Environmental Protection, publish a joint brief to explore strategies to find the right development mix. Check out some of the key findings in this review
    • China Water-nomics – Will China’s economic development be hampered by limited water resources?  The very existence of the Three Red Lines signals that China can’t keep developing the way it has. Read on for why GDP will be capped at 5.7% given China’s water-nomics

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  • National Geographic ScienceBlogs: National Water Infrastructure Efforts Must Expand Access to Public Drinking Fountains

    By Peter Gleick and Rapichan Phurisamban 

    March 8, 2017

     

    Modern drinking fountains chill and filter water, and let users fill water bottles (Photo: Peter Gleick 2011)

    Modern drinking fountains chill and filter water, and let users fill water bottles (Photo: Peter Gleick 2011)

    There is strong bipartisan support for expanding investment in the nation’s water infrastructure as part of a broader infrastructure effort. But there is, as yet, little agreement about what specific investments should be made. Here is one idea: expand access to high-quality and safe municipal water by improving access to drinking fountains in schools, parks, public buildings, and around public transit areas.

    Drinking fountains are an important public resource, serving as an alternative to bottled water or sugary drinks and accommodating a wide array of users, including children, commuters, runners, the homeless, and tourists. Some fountains are even designed to provide water for pets. A newly released study from the Pacific Institute, entitled “Drinking Fountains and Public Health: Improving National Water Infrastructure to Rebuild Trust and Ensure Access,” discusses the state of the nation’s drinking fountains and addresses concerns about their quality and links to illnesses. The report concludes that the risk of fountain water contamination can be reduced or eliminated altogether through improved maintenance and cleaning or updating and replacing old water infrastructure and pipes. …»

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  • 21st Century Water Demand Forecasting

    By Matthew Heberger, Senior Research Associate and Heather Cooley, Water Program Director

    August 31, 2016

    Yogi Berra once said, “It’s hard to make predictions, especially about the future.” And nowhere is this more true than in the water business. Forecasts are extremely important for water utilities, which must make plans today to meet their communities’ current and future water needs. Since water supply projects can take years to plan and build, utilities’ long-term view often reaches twenty years or more into the future. But the industry has a poor track record when it comes to long-range forecasting.

    The results of this are not purely academic. The end result is that water utilities may build unneeded or oversized water supply and treatment infrastructure – things like reservoirs, pumping stations, treatment plants, and desalination facilities – passing on the costs to customers and creating unnecessary environmental impacts. …»

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  • ERW Opinion: On Methods for Assessing Water-Resource Risks and Vulnerabilities

    By Peter Gleick, President Emeritus and Chief Scientist

    July 29, 2016

    Much more can and should be done with new data and methods to improve our understanding of water challenges, says Peter Gleick.

    As populations and economies continue to expand and as anthropogenic climate change accelerates, pressures on regional freshwater resources are also growing. A wide range of assessments of water pressures has been produced in recent years, including the regular updates from the United Nations World Water Development Reports (WWAP 2003, 2006, 2009, 2012, 2014, 2015), the biennial assessment The World’s Water (Gleick et al 1998–2015), the Aqueduct water stress datasets produced by the World Resources Institute (WRI 2015), and numerous other efforts to develop quantitative water measures and indices. The development of such methods has become increasingly common in recent years in order to help measure progress and evaluate the impacts or effectiveness of water policies and practices. The new letter in this volume of Environmental Research Letters by Padowski et al (2015) offers another opportunity to evaluate freshwater threats and vulnerabilities.

    …»

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    National Geographic ScienceBlogs: Global Droughts: A Bad Year

    By Peter Gleick, President

    April 27, 2016

    Populations around the world face many severe water challenges, from scarcity to contamination, from political or violent conflict to economic disruption. As populations and economies grow, peak water pressures on existing renewable water resources also tend to grow up to the point that natural scarcity begins to constrain the options of water planners and managers. At this point, the effects of natural fluctuations in water availability in the form of extreme weather events become even more potentially disruptive than normal. In particular, droughts begin to bite deeply into human well-being.

    …»

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    Moving from Theory to Practice: A Synthesis of Lessons about Incentive-Based Instruments for Freshwater Management

    by Heather Cooley, Michael Cohen, and Matthew Heberger

    February 8, 2016

    There has been growing interest in applying incentive-based instruments, such as pollution charges and tradeable permits, to address the twin challenges of accessing enough freshwater to meet our needs while also preserving the well-being of freshwater ecosystems. These instruments use direct or indirect financial incentives as motivation to reallocate water or to reduce the health and environmental risks posed by an activity. But what do we know about how they have actually performed?

    …»

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    Sanition and Water for All Partner Perspectives: One Year On: Companies and Respect for the Human Rights to Water and Sanitation

    By Mai-Lan Ha

    January 29, 2016

    2015 was a historic year for sustainable development. The world came together and adopted the Sustainable Development Goals (SDGs), a new framework that will guide development for the next 15 years. The 17 SDGs cover a range of topics from health to education to equality and environmental protection. Underpinning the achievement of these goals is the importance of water. As such, water has its own dedicated goal (Goal 6) and is also integrated into a number of other related goals, such as those on health, wellbeing, and biodiversity. Critical to achievement of SDG6 will be the important role that businesses must play and the need to ensure that the rights to water and sanitation are met. As such, a year ago, the CEO Water Mandate and Shift released Guidance for Companies on Respecting the Rights to Water and Sanitation. The Guidance is the first comprehensive document that lays out how businesses can meet their responsibilities to respect the rights by incorporating them into existing water management practices, policies, and company cultures. 

    …»

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    Knowing and Showing that Companies are Respecting the Human Rights to Water and Sanitation

    By Mai-Lan Ha, Senior Research Associate

    February 18, 2015

    The intersection of business, water, and human rights has a contentious past. From protests, to legal battles, to the suspension of business operations, addressing local community conflicts over water and sanitation issues is a business imperative. Last month, the Pacific Institute in its role as part of the Secretariat of the CEO Water Mandate launched the first comprehensive guide to help businesses meet their responsibility to respect the human rights to water and sanitation. The document Guidance for Companies on Respecting the Human Rights to Water and Sanitation: Bringing a Human Rights Lens to Corporate Water Stewardship provides companies with step-by-step guidance to know and to show that they are respecting the rights.

    …»

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    The Corporate Water Disclosure Guidelines – A common and meaningful way for companies to track and communicate their water performance, risks, and impacts

    by Peter Schulte, Research Associate

    October 7, 2014

    The Corporate Water Disclosure Guidelines are available as a PDF report and web-based tool.

    disclosure-guidelines-cover-2014This week, the CEO Water Mandate launched its finalized Corporate Water Disclosure Guidelines – a common approach for companies to effectively and intelligibly disclose the many elements of their corporate water management practice to key stakeholders. The Guidelines present an important step in corporate water stewardship that can help companies communicate with their stakeholders, and better understand themselves in the process. Here are a few (of many!) ways in which the Guidelines can benefit a company.

    Demonstrating good practice

    By providing meaningful quantitative metrics and qualitative approaches that describe corporate water practice, the Guidelines help companies demonstrate good performance and reduced risks and impacts to investors, consumers, communities, suppliers, their own employees, and others. This is particularly important as, in the past, many companies have used water-related metrics that are at best of only limited use, and at worse quite misleading! For example, traditional globally-aggregated water use metrics inherently hide and undervalue the local nature of water resource challenges. Perhaps a company’s global water use has decreased, but has it decreased in the places that are facing the most urgent water shortages?

    …»

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    GreenBiz Blog: The Three Questions You Need To Ask about Assessing Water Risk

    by Jason Morrison, director of the Pacific Institute Corporate Sustainability Program, and Sissel Waage, Director of Biodiversity and Ecosystem Services at BSR (Business for Social Responsibility)

    July 28, 2014

    Q-markDo your company’s risk assessment processes consider water risk for every major capital decision, as well as operational management and supply chain partner screening? If not, it is time to call a meeting to revise business risk assessment and management procedures.

    The business case is now clear. For example, as quoted in the Ceres report “Murky Waters? Corporate Reporting on Water Risk” (PDF), the U.S. Securities and Exchange Commission homes in on material risks as: “Changes in the availability or quality of water … can have material effects on companies.” JPMorgan’s “Watching Water” report (PDF) states: “In many situations, the risk of business interruption due to water scarcity appears to be on the rise, making contingency planning more important.”

    A UN Global Compact CEO Water Mandate report explains that “inside the fence-line” approaches are inadequate: “The simple measurement of corporate water use and discharge does not provide a complete picture of a company’s water risks or impacts. … As such, understanding and managing water risks requires companies to assess watershed conditions” (emphasis added)…

    Read the full blog at GreenBiz.

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