“Innovate and adopt new approaches to reduce water use in our supply chain, with a 20% reduction in freshwater use in textile dyeing and finishing (l/kg) per unit of production” – Nike
“Improve water efficiency by 25%, help ensure healthy, resilient freshwater systems through conservation efforts with World Wildlife Fund and replenish 200% of the water we use” – Coca Cola
“Improve water stewardship [Reduce water risk by applying four-phase water stewardship approach in priority at-risk watersheds]” – General Mills
“100% of our Cotton for Apparel sourced from organic, US-origin or BCI certified sources.” – Timberland
These are a few of the most recent water-related sustainability commitments from some of the world’s leading companies. There is no doubt that these companies have made huge strides on water (and sustainability more broadly) in recent years and should be lauded. They are fellow environmental advocates and keenly recognise the fundamental importance of environmental issues to business and society. And in general, they are whom many competitors and industry laggards look to for setting the next generation of sustainability targets.
Simply put, context and materiality matter. Blunt efficiency may be meaningful or meaningless, helpful or harmful, depending on the context.
Efficiency isn’t always good
In a water abundant context, water efficiency is only meaningful from an energy/carbon perspective; it is not meaningful to other water users. In a context that depends on inefficient water use (e.g., flood irrigation to recharge aquifers), efficiency may actually cause problems when not well considered. Indeed, water efficiency can sometimes have perverse outcomes from using MORE water overall (to produce more at greater levels of efficiency) and can create less resilient systems (plants develop shallower root systems with drip, exposing them to drought risk). Want academic evidence? See this.
This efficiency push we see from many companies is reinforced by aspects of the new Sustainable Development Goals. SDG 6.4 reads “By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity”. The key to 6.4 is not the front end (i.e., “increase efficiency”) but rather the second part (“ensure sustainable withdrawals and supply”). The notion of water balance is likely to be critical and as such, the context (both spatially and temporally) becomes highly relevant to what your target looks like. As a person focused on water, I don’t care if you’re wasteful with water in an abundant environment (recognising that it is still an energy issue); I care if you’re wasteful in a scarce environment (or at a scarce time of the year). This nuance is lost in virtually all corporate water goal/target setting at present and really needs to be thought through.
“As a person focused on water, I don’t care if you’re wasteful with water in an abundant environment (recognising that it is still an energy issue); I care if you’re wasteful in a scarce environment (or at a scarce time of the year)”
Which is why the time has come to push the aforementioned leaders (and their peers) to thinking more deeply about sustainability target setting – notably on water.
So where to from here? I would suggest 5 things to start:
1. Consider and relate efficiency targets to their context. Efficiency CAN be helpful, but it needs to be thought through and placed into the catchment context. Better yet, consider and be clear about how efficiency will help deliver “sustainable supply of freshwater” per SDG 6.4. Efficiency “savings” need to be accounted for and are likely only relevant in select water-scarce contexts. Total water consumption, withdrawals, m3/ton, water footprint, etc. are meaningless (and largely a waste of everyone’s time) without knowing the status of the context.
2. Be transparent and link to financial materiality. Sustainability targets (including water targets), should be meaningful and “material”. This is particularly true for shareholders – water targets should address material water risks given their potential to disrupt businesses and economies as noted by WWF,WEF, and World Bank. In other words, material risks noted in Annual Reports and SEC filings should align with sustainability targets. Furthermore, companies should be clear about “why these” targets. How were the areas determined and how were the specific target levels set? Be transparent.
3. Align. Don’t re-invent the wheel and come up with your own definitions and frameworks. Align with the SDGs and link your corporate targets to their targets. Align with recognized forms of water stewardship such as those stated by the Alliance for Water Stewardship.
4. Make sure catchment-based approaches are meaningful. Increasingly leading companies are taking action beyond efficiency. However, as that happens, approaches are emerging that may not be meaningful. “Replenish” as a concept is largely meaningless in terms of mitigating catchment-based water risk since “water neutrality” often does little to mitigate shared water challenges. Actions in the catchment must align to joint progress on issues that matter to local stakeholders and environmental flow requirements. Without a common, local baseline such as those established in Basin Scorecards, catchment targets often lack meaning.
5. Ensure standards hit the issues that matter. Recent years have seen numerous “sustainable sourcing commitments” and many of these have revolved around procurement using third-party sustainability standards (Timberland’s above BCI commitment being a good case in point; Coke has one for Bonsucro; General Mills one for RSPO, etc.). However, not all standards are equal with stronger and weaker sustainability requirements. When it comes to water, this is especially true and WWF completed an assessment of water across a number of agricultural sustainability standards. Make sure the standard hits the issues that matter (per point #2 above).
In the coming months, WWF, World Resources Institute, TNC, CDP will be working with the UN Global Compact’s CEO Water Mandate to develop guidance for companies outlining our vision of how context-based corporate water targets might work. Stay tuned – we’re just getting started!