Every year water scarcity affects more and more countries, leading to more companies recognizing the importance of responsible water use.
Future-focused organizations know that to take the lead as responsible water stewards they must address the water crisis by managing their water footprints and the impact on the communities around them.
In this article we talk about what water stewardship is, why it’s important, and how your business can report on water consumption and use in a way that doesn’t take unnecessary resources away from your company’s operations.
Water stewardship defined
Water stewardship is the responsible and socially equitable use of water that is environmentally sustainable and economically beneficial. It is accomplished through a stakeholder-inclusive process that considers both site and watershed-based actions. A watershed includes any area of land that drains to a defined location along a stream or river, which for businesses includes the locations of their facilities or their suppliers’ facilities.
For companies, this means considering:
- How water is used within direct (operational) and indirect (supply chain) operations
- How its water consumption and use impact the watershed
- How the conditions of the watershed impact its operations
Organizations that want to be responsible water stewards understand their own corporate water footprint, the watershed they are located in, and the shared risk involved with water governance, water balance, water quality, and other important water-related topics.
Why is water stewardship important?
Water stewardship enables companies, organizations, individuals, and governments to work together to identify and achieve common goals for sustainable water management as well as shared water security.
Most companies know that water will likely affect business growth and profitability in the near future, which is why water is now recognized as a material risk, and water stewardship is considered critical to long-term business growth.
3 reasons why your ESG strategy should include water:
- The water crisis is critical and getting worse
- There are real business risks and opportunities related to water security
- Investors are demanding more transparency and action
Companies and organizations that engage in comprehensive water stewardship programs:
- Manage their water consumption and footprints better
- Mitigate water-related risks of their operations and along supply chains more effectively
- Build trust with local governments and communities through shared watershed governance
There are also many benefits to businesses for being good water stewards including:
- Enhancing communications with suppliers
- Building trust with governments and local communities
- Establishing environmental and sustainability leadership
- Encouraging corporate responsibility among employees
- Showcasing sustainability progress to stakeholders
- Uncovering cost savings and business opportunities
Water is a shared resource that all businesses need, which is why water stewardship is good for businesses by standardizing data reporting, enabling risk mitigation, driving economic growth and more.
Are there water-related ESG reporting standards?
Water stewardship frameworks outline standardized approaches companies can take when including water metrics in their ESG reporting.
There are multiple water reporting frameworks used across the private and public sector to support water sustainability planning. Some of the most common water stewardship frameworks include:
- Water Footprint Network
- United Nation’s CEO Water Mandate
- The Global Reporting Initiative (GRI)
- Climate Disclosure Project (CDP)
- Climate Disclosure Standards Board (CDSB)
- International Integrated Reporting Council (IIRC)
Environmental, Social and Governance or ESG reporting is becoming more important, and with it the need for understanding different ESG frameworks and metrics. Luckily, there are groups who are working to make this easier.
In 2020, the WEF International Business Council released a white paper that set guidelines for cross-industry reporting on ESG and tracked sustainability progress.
The paper, “Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of Sustainable Value Creation,” includes 21 core and 34 expanded reporting metrics.
One of the key aspects of the paper is Freshwater Availability and includes the following core reporting metrics for organizations:
- Volume of water withdrawn (and percentage of total) in regions with high or extremely high baseline water stress.
- Volume of water consumed (and percentage of total) in regions with high or extremely high baseline water stress.
- Estimate and report the same information for the full value chain, where appropriate.
At the 2021 World Economic Forum annual meeting, over 60 companies committed to reporting on these core metrics.
Begin your water stewardship journey
Companies looking to add water stewardship to their ESG strategy have to select which ESG reporting framework and standards work best for their business. Ultimately, the final format is up to the company, but content needs to meet standard requirements.
This process involves compiling water use data, utility information, environmental reports, as well as documentation from multiple locations and from up and down the supply chain, in order to mitigate risk and plan sustainably for a water-constrained future.
Starting a water stewardship journey is no small undertaking, however it is much easier with the right solution and partner.
An ESG software or ESG platform make it easy for your business to begin its sustainability journey by helping monitor and manage ESG related risks and data. Ensure the technology you select includes a water stewardship solution that enables your business to:
- Map your water sustainability strategy
- Align your water data from across your organization
- Simplify your water reporting with automated mapping to leading water frameworks
- Share your water stewardship progress with stakeholders
Need help managing your water impact? We can help. The FigBytes Water Stewardship Solution tracks, measures, and manages water risks and impacts across your organization. Speak to a FigBytes expert today.