CEO Water Mandate: Footprint to Public Policy

Discussion Paper
From Footprint to Public Policy –
The business future for addressing water issues
March 2009

1. Introduction

In response to growing concerns of water scarcity and unchecked water consumption, the concept of “water footprint” has been drawing attention among businesses, policy makers, and the public over the last few years. Originally developed as an analogy to the more widely recognized “ecological footprint” and “carbon footprint”, water footprint has emerged from an advocacy tool to a measurement for assessing the total freshwater requirements to produce goods and services.

As interest and research in water footprint increases, and methodologies to assess water footprint become more robust, a number of corporations have started to conduct these assessments as a part of their water management strategies. While this is a useful and important step for businesses to identify water requirements, dependencies, and wastewater discharges embedded in their direct operations and value chain, the exercise of water footprinting alone (or even reduction of a company’s water footprint) can only go so far in eliminating water-related business risks. Among other reasons, this is because water is fundamentally different from carbon or other natural resources in various ways:

-ƒ Its availability, management, and impacts are local at a watershed or basin level, thus business risk around water is fundamentally related to location and exposure to water stress at a catchment or local level.

ƒ – It is typically variable in space and time, with a high degree of uncertainty about future changes.

ƒ-  The availability for use is constrained, and often with complex rights and undeveloped pricing-market systems.

-ƒ It is both an economic and public good, with significant socio-political implications.

ƒ- Freshwater ecosystems are vulnerable to and are highly interconnected with human activities.

These multi-dimensional characteristics of water necessitate that companies pursue a spectrum of management measures from water footprint assessments to public policy engagement, in order to solidify meaningful and lasting outcomes.

This paper illustrates an emerging “roadmap” of water risk identification and management approaches that many companies are beginning to pursue, framed as a journey from water footprint to public policy. It describes how water footprinting can serve as the foundation for various “responses” that address water risks. We conclude by discussing how and why certain types of water risks can only be effectively managed through public policy engagement that goes beyond addressing just a water footprint. […]

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