Our key takeaway: Companies are contributing to five critical threats to freshwater systems worldwide: groundwater depletion, metals contamination, plastic pollution, diversion and transfer of water, and eutrophication. And some companies more than others (think: food production, apparel manufacturing, mining, and high-tech – amongst others). We don’t have the global governance framework that we need (laws, water pricing etc.), even though the threats to water pose significant risk to the planet, people, as well as industry itself. We need individual company action to step up, coupled with public policy engagement and strong multi-stakeholder collaboration.
Ceres, in partnership with the Valuing Water Finance Initiative, commissioned the Global Institute of Water Security at the University of Saskatchewan to compile ‘Global Assessment of Private Sector Impacts on Water’ (April 2022) which “analyzes the global role and impacts that industries are having on water systems, including their impact on water use, pollution, water flow alterations, and broader hydrologic system disruption. It also examines the long-term exposure that different industry sectors are facing from escalating water risks and the actions that companies can take to mitigate those risks.”
Three key highlights:
· The disproportionate role of industry: “Industry – from food production to mining, apparel manufacturing to high-tech – is collectively the single largest user and influencer of freshwater resources globally. Therefore, it has much to lose from critical water risks as population pressures and climate risks grow. How industry responds to intensifying water scarcity and water quality risks globally will be critical to its long-term future and society at large.” The report makes clear that the biggest contributor is “the Consumer Staples sector, including food, beverage, and livestock production”, which is the largest driver of groundwater depletion and water pollution globally, much of it from nutrient-laden fertilizers and manure that overflow into streams, rivers, and coastal estuaries, causing low-oxygen, eutrophic ‘dead zones’ that are spreading worldwide. Agricultural supply chains with-in this sector account for 70% of global water withdrawals.” Other sectors that contribute to water scarcity threats and/or pollution are the textile, apparel, and luxury goods industry; the metals and mining industry; and the oil and gas industry.
· Major shortcoming of global water governance: The report highlights four “shortcomings in how water is being managed and governed globally.” First, lax regulations (“[w]eak or nonexistent policies and regulations governing water use and water quality impacts are an all-too-common problem globally”.) Second, water is an undervalued resource (“global economic systems continue to treat water as an infinite resource that has little monetary value, resulting in poorly managed and inefficient water use by industries in most parts of the world”). Third, water management practices “vary widely in scale and effectiveness across many industries”. Fourth, social responsibility gaps (“Activities such as water diversions are displacing communities, the disproportionate use of water resources and overdraft of ground- water are leading to conflicts between frontline communities and industries, and the discharge of polluted water and inadequate wastewater management is impairing drinking water quality and jeopardizing human health”).
· Seven core actions for companies: The report offers seven core actions for industry actions. First, water quantity: “Companies should ensure their practices are not negatively impacting water availability, with particular attention to water scarce basins across their value chains.”. Second, water quality: “Companies should ensure that their activities are not polluting local and regional water bodies.” Third, ecosystem protection. “Companies should ensure that natural eco-systems are not degraded from their business activities and help restore ecosystems that their businesses depend on.” Fourth, access to water and sanitation: “Companies should collaborate on efforts to support access to clean water and sanitation in the communities they interact with and impact.” Fifth, business integration: “Companies should ensure that water related risks and opportunities are systematically integrated into corporate governance and decision-making from the board room to senior management to employees at all levels of the workforce. Companies should transparently disclose comprehensive water use across their supply chains.” Sixth, public policy engagement and water governance: “Companies should proactively support public policies and water governance structures that further sustainable water resource management”. Seventh, multi-stakeholder collaboration: “companies should be boosting multi-stakeholder collaborations to ensure sustainable water resources. They should be building, engaging and investing in industry and cross-industry efforts that challenge traditional business practices, that encourage research, and enable system-level changes that are needed.”
“Given that climate change is accelerating these risks, time is running out to protect the Earth’s most precious natural resource. The report concludes that it will be impossible to advance global water security without far stronger private sector leadership – both from companies and the investors owning them. Concerted and focused efforts of investors, companies, and governments to drive change in these unsustainable practices would make a significant positive impact to protect global water security, economic development, and the lives of millions.”
