Managing wastewater as a way to manage other people and planet impacts (WBCSD)

Our key takeaway: Managing wastewater may seem old hat. After all, haven’t we been looking at ways to reduce pollution and contamination of our natural environment for decades? Aren’t there countless regulations and standards in place across the globe requiring companies to manage these risks? All true. But what we’re seeing now is a new lens to the conversation we’re used to: companies’ role in using due diligence to address issues at the nexus of people and planet, including environment-related human rights impacts. WBCSD has put forward new guidance for companies on managing their wastewater, with consideration for the many ways in which water intersects with other aspects of social and environmental challenges, including climate change, biodiversity loss, impacts on human health and livelihoods, and beyond. The framework is designed to address gaps in companies’ current approach to wastewater and to prepare them for emerging imperatives to disclose not only their impacts, but also their due diligence processes. There are five steps to the framework: (1) Identify the impact of companies’ wastewater on climate change, biodiversity and human health and livelihoods; (2) Measure how company activities are creating change in the state of natural capital, including by engaging closely with local stakeholders; (3) Quantify impacts; (4) Set robust, science-based targets to address impacts; and (5) Manage impacts through a mitigation hierarchy that prioritises avoidance of impact after which come, in order of priority, reduction, regeneration and remediation, and leveraging collaborative transformative action.

The Business Council for Sustainable Development (WBCSD) has released new Business Guidance on the Assessment of Wastewater-Related Impacts (April 2023):

• The issue and the role of business: Wastewater that is untreated or partially treated poses a threat to the quality and the quantity of the world’s increasingly scarce freshwater resources.  This can also cause negative impacts on ecosystems and biodiversity, economic activity, global development and human health–all underlying drivers for respecting human rights, especially as climate change accelerates change. Likewise water pollution can increase risks for economic actors including businesses; for example, wastewater discharge can indirectly increase or accelerate GHG emissions or lead to the discharge of nutrients or toxic compounds into freshwater bodies, damaging sensitive ecosystems or even rendering them unusable. According to the report, this can have a disproportionate impact on the most vulnerable people: “These impacts create externalities for other actors that generate hidden environmental, health and socio-economic costs. The natural, social and human capital connections of wastewater mean that everyone, everywhere bears the burden of these externalities but more so society’s most disadvantaged populations.” At the same time there are also benefits of responsible management of wastewater which has “huge untapped potential in serving as a reliable alternative source of water while generating energy, nutrients and other useful by-products,” e.g. through irrigation. The positive potential of wastewater “goes beyond addressing human and environmental health, with implications for food and energy security and climate change mitigation and adaptation. A circular approach is therefore the best strategy for wastewater management.”
  

• The wastewater management gap and the need for standardised guidance: The report cites data suggesting that companies are not yet effectively managing the issue of wastewater pollution: “The world’s freshwater systems face critical threats from industrial activity, including metal contamination, plastic pollution and eutrophication, most of which relate to the discharge of untreated or insufficiently treated wastewater discharged by industries.” What’s more, based on data from CDP’s 2020 water survey of 2,934 companies, “businesses still underappreciate and underestimate the issue of water quality. Not all companies monitor the quality of their wastewater discharges, while less than 5% are setting and reporting progress against water pollution reduction targets.” The role of the WBCSD guidance is to create a “standardized pathway” enabling companies to more effectively channel resources and knowledge into managing wastewater impacts. This can support enterprise risk management as well as management of risks to people and planet, while helping to de-risk operations and create new business opportunities. This is also a way for companies to prepare themselves for the future of disclosure and due diligence. For example, under the Taskforce on Nature-related Financial Disclosures (TNFD) framework, “it may soon be mandatory for companies to report on the impacts from their activities in clearer economic terms.”
  

• Five key steps for companies: Step 1 is to measure the impact driver–that is, “a measurable quantity of a natural resource used as an input in production or a measurable non-product output of the business activity.” In the case of wastewater, there are two main impact drivers. The first is the company’s use of surface water and groundwater that can either result in water scarcity or pollution (or both). Some of the key impacts from consumptive water use include harms to human health from lack of access to water, prevalence of waterborne diseases, malnutrition, etc.; loss of water for drinking, sanitation and domestic uses; loss of biodiversity and other ecosystem services; loss of water for activities like fishing and farming, which may undermine livelihoods and standard of living; conflict over scarce resources; and reduced economic growth. The second impact driver is the “[d]ischarge of effluent (treated/ untreated) by the site, leading to GHG emissions and the release of pollutants into the water body.” For example, this can happen through GHG emissions generated by wastewater treatment processes, or conversely by non-treated water that “generates residuals that … can release GHG emissions and cause land degradation,” leading to a host of other climate- and biodiversity loss-related impacts on people and nature. Step 2 of the guidance is to measure how business activities cause changes to the “state of natural capital,” referring to understanding the baseline features and dynamics of the ecosystem in which they operate. As an example, “some watersheds may support rich and unique biodiversity, making them vulnerable to stresses and highly important for preservation. It is therefore critical for companies to understand the local context of the watershed in which they operate.” The report advises engaging with local stakeholders as a top way to gain understanding on indicators of ecosystem health and damage. Step 3 is to quantify the impacts, which can include measuring impacts on agri-forest yield, disruption of ecosystem services, biodiversity loss, human health and impacts on local water-reliant economic activity. Companies can add a monetary value to strengthen the business case, as an optional sub-step. Step 4 is to set targets in line with science-guided standards like the Science Based Targets initiative (SBTi). Step 5 is to manage the impacts identified and measured throughout the previous steps. The report advises that companies should use conservation mitigation hierarchies that privilege prevention of negative impacts. The Science-Based Targets Network (SBTN) sets out the AR³T framework: Avoid, Reduce, Regenerate and Restore, and Transform (for example through collaboration and partnership with other stakeholders).