We all know that water is an essential part of healthy communities, thriving ecosystems, and robust economies. But why are businesses increasingly focused on water, looking for new ways to optimize water use, minimize pollution, and advance sustainable water management in the watersheds in which they operate?
First off, there is a lot of money to be saved. As water prices increasingly reflect the true cost of water, companies will spend more on the resource as water scarcity becomes more pronounced; highly-efficient practices minimize cost. Further, wastewater treatment systems can prevent costs and fines associated with regulatory violations and curb stakeholder criticism due to companies contributing to water pollution problems.
However, perhaps even more importantly, for many industries, long-term business viability is highly-dependent on sustainably managed watersheds. In other words, unlike many other corporate sustainability issues, water-related business risks are highly local in nature. Poorly managed watersheds lead to a variety of business risks. For example:
- As water scarcity worsens, companies will have an increasingly difficult time accessing water and may face reduced and/or unreliable water allocations.
- As pollution worsens, industrial facilities may need to pay more to treat water to ensure it is suitable for production and that discharges meet more stringent water quality regulations.
- Companies may not be able to reliably access water in regions where water sector institutional capacity and resources are limited or where infrastructure is inadequate.
- Companies operating in areas where communities or ecosystems do not have sufficient access to water may be seen as complicit to the water problem and face reputational damage.
- Investors may be hesitant to support water-intensive companies whose long-term access to water is in question.
The list goes on and on.
It is out of this recognition that the UN Global Compact launched the CEO Water Mandate in 2007. The Mandate aims to bring together companies, government agencies, civil society, and others to better understand and advance water stewardship in the private sector. It does so by conducting research that identifies core challenges, developing guidance that advances good practices, and hosting multi-stakeholder convenings that explore critical issues, among other things.
During World Water Week in August 2012, the Mandate released several reports and tools that help companies reach their corporate water stewardship goals and collaborate with others to advance sustainable water management:
- The Beta Version of Guide to Water-Related Collective Action offers insights geared toward helping companies establish enduring relationships with a broad spectrum of stakeholders, leaders, and individuals to address shared water risks and advance sustainable water management.
- The Water Action Hub, an online matchmaking tool, is an enabling platform designed to address this need for improved collaboration among business and other stakeholders. It helps companies efficiently identify potential collaborators and engage with them in water-related collective action to improve water management in regions of mutual strategic interest.
- The Public Exposure Draft of the Corporate Water Disclosure Guidelines aims to build on the experiences of water disclosure-related initiatives so as to advance a common approach to corporate water disclosure. In doing so, the guidelines offer common corporate water disclosure metrics that can begin to harmonize practice and provide tips for determining report content relevance and aligning water disclosure to stakeholder expectations. The Guidelines’ Public Exposure Draft will be refined and finalized in 2013 based on company and stakeholder experience and feedback.
- Bringing a Human Rights Lens to Corporate Water Stewardship: Results of Initial Research is a new report that summarizes initial research on policy trends relating to the human right to water and sanitation, illustrates some of the current challenges businesses face in respecting this right as well as the perspectives of potentially-affected communities, and identifies areas of potential synergy with companies’ existing water stewardship efforts.
We hope that these new resources help companies transform their nascent recognition of water as a critical business issue into tangible and meaningful action that reinforces the integral connection between sustainable water resource management and a thriving economy. Indeed, the Mandate’s efforts in 2013 will focus largely on ensuring that these concepts and practices are realized on the ground.
This post is co-authored by Jason Morrison (Director, Globalization Program) and Peter Schulte (Research Associate). Both work at the Pacific Institute – a non-profit sustainability policy research and advocacy center based in Oakland, California. The Pacific Institute serves as the operational arm of the CEO Water Mandate and as part of the Mandate Secretariat.