There’s little doubt water is a crucial piece of the Environmental, Social and Governance equation. Clear, plentiful freshwater is simply as essential to enterprise — and life — as clear air. But many corporations undergo from carbon “tunnel imaginative and prescient,” with a lot of the motion to date on the “E” a part of ESG targeted on carbon discount. This isn’t notably stunning, as water dangers are extra difficult and more durable to outline and measure than carbon emissions.
However corporations ignore water at their peril. Issues with water amount and high quality disrupt operations and provide chains, cripple revenue margins and damage model worth. CDP reviews the price of enterprise inaction within the face of water danger is 5 occasions better than the price of performing to handle these dangers. Firms that hesitate to take their first steps in water stewardship miss alternatives to handle shared challenges and improve model worth. Don’t anticipate the following water disaster to start out addressing water-related dangers, challenges and alternatives in your corporation operations or as an investor in water-intensive companies.
Regardless of their shared significance, water can’t be addressed in the identical method as carbon. A ton of carbon mitigated in Miami has the identical profit long run as a ton of carbon mitigated in Mumbai. That’s not the case with water; a gallon of water saved in water-abundant Milwaukee doesn’t assist water-scarce Phoenix. But Milwaukee faces its personal water high quality and stormwater administration issues. In actual fact, each watershed comes with its personal distinctive brew of water high quality and amount points. For corporations with a number of services unfold throughout areas or international locations, the native but various nature of water points complicates nascent forays into water stewardship.
That’s why it’s vital to demystify ideas reminiscent of “contextual targets” and speed up honest company efforts at addressing water-related dangers. Whereas water administration and conservation are the inspiration for constructing a extra refined water technique, corporations want to maneuver past easy water administration and arbitrary effectivity metrics to true water stewardship that acknowledges the varied and native nature of water points.
But many corporations undergo from carbon ‘tunnel imaginative and prescient,’ with a lot of the motion to date on the ‘E’ a part of ESG targeted on carbon discount.
Water stewardship begins with understanding how water is utilized in operations and the circumstances of the watersheds the place corporations function and/or supply. Meals and beverage corporations reminiscent of Normal Mills pioneered this method years in the past as they moved away from across-the-board effectivity targets to a extra strategic and nuanced method. Normal Mills’ pragmatic but contextual method began with 4 primary steps, in response to its printed water coverage:
- International evaluation of water stress to establish precedence watersheds.
- Deep-dive evaluation of precedence watersheds to grasp challenges and alternatives, together with optimistic and unfavourable influence of Normal Mills operations.
- Institution of a multi-stakeholder science-based water stewardship motion plan, together with session with native stakeholders from related sectors (business, agriculture, authorities, NGO and communities).
- Implementation of water stewardship plan and monitoring for outcomes.
As companies be taught extra concerning the watersheds through which they function and supply, they’ll improve model worth by seizing the chance to collaborate with neighboring companies and different native water customers to handle shared challenges, serving to enhance long-term water safety for all. Partaking stakeholders on shared water-related points is central to good water stewardship efficiency, whereas speaking with key stakeholders reminiscent of ESG buyers and prospects is vital to boosting model worth.
For corporations reminiscent of Nutrien, the world’s largest supplier of crop inputs, companies and options, the idea of participating key stakeholders throughout a big, various worth chain may very well be intimidating sufficient to halt water stewardship efforts earlier than they even begin. However via its work with The Water Council, a nonprofit devoted to freshwater innovation and stewardship, Nutrien is main a brand new wave of corporations serving to to outline good company water stewardship.
Water is vital to producing Nutrien’s merchandise of potash, nitrogen and phosphate. The corporate works carefully with farmers, who want entry to enough clear water to sustainably develop crops. Thus, water is a fabric ESG matter for Nutrien. The corporate already was actively managing water for effectivity and allow compliance, but it surely wasn’t holistically evaluating water dangers and alternatives and didn’t have a cohesive company water stewardship technique.
A watershed danger evaluation helped Nutrien take into consideration water differently.
“We began trying on the watersheds that we function in, not simply our websites and the water that they want,” mentioned Mike Nemeth, senior advisor for agricultural and environmental sustainability.
Firm leaders discovered that water should be addressed regionally as all watersheds face totally different challenges.
Enterprise that proactively make sure the sustainability of native water sources construct stability in their very own enterprise operations and model. Now greater than ever, shoppers wish to purchase services from corporations that do good, and nothing is extra private and emotional to shoppers than water. Buyers are additionally more and more noting the significance of water stewardship.
To cite an outdated track, “You don’t miss your water ‘til your effectively runs dry.” Business has an essential function to play in defending water sources for its personal profit and the good thing about the neighborhood. With the identical vitality devoted to lowering carbon, companies should urgently steward water sources by widening their “tunnel imaginative and prescient” of sustainability points.
Stacy Vogel Davis contributed to this report.