Reporting on a global water crisis

A global water crisis is apparent. At just over the halfway point to the 2015 deadline to the United Nations Millennium Development Goals (MDGs) the goal to half the proportion of people without sustainable access to safe drinking water is far from being met. Some 1.1 billion people in developing countries still have inadequate access to water, according to the UNDP. At the same time as this lack of access, there is a growing scarcity of this essential resource in part as a consequence of increased demand. Water stress and ground water depletion as a result of over use is a particular problem for China and South Asia. Moreover Climate change is transforming and disrupting the patterns and predictability of water availability and industrial development and waste water from manufacturing has led to contamination of vital supplies. 

It is great challenge for governments to manage effectively and equitably this elixir for life. Companies also have to grapple with the crisis as most have to rely on this productive resource for their operations. Well managed businesses have begun to acknowledge they have a role in mitigating this crisis through better managing their water usage.  Reporting on water usage and conservation can help companies identify and manage the risks and opportunities associated with water usage and conservation.

The GRI G3 Guidelines, the world’s most widely used sustainability reporting framework, has a number of water related metrics that companies can, and do use, to manage their water related impacts. 

Many reporting companies use or draw on the Global Reporting Initiative (GRI) reporting guidelines as a framework for their sustainability reporting. This framework sets out the principles, standard disclosures and indicators that organizations can use to measure and report their economic, environmental, and social performance. Within the environmental indicators, there are four water related metrics. These are: EN8 Total water withdrawn by source; EN9 Water sources significantly affected by the withdrawal of water; EN10 Percentage and total volume of water recycled and reused; and EN21 Total water discharge by quality and destination.

The GRI metrics on water provide companies with an effective management tool that can be used to respond to the global water crisis and assist with companies’ own internal management of this essential resource. By disclosing information on these metrics as well as other indicators in the GRI framework, companies can benchmark their organizational performance with respect to laws, norms, codes, performance standards and voluntary initiatives; demonstrate organizational commitment to sustainable development; and compare their organizational performance over time.

The starting point for companies navigating the risks related to water is to first understand what impact their operations, products and services are having on water resources. By knowing the water resources a company actually uses, companies can start to take action to reduce their impacts. The GRI indicators that can help with this include: Total water withdrawn by source; Water sources significantly affected by the withdrawal of water; and Total water discharge by quality and destination

The benefits of measuring and reporting water usage include realizing cost savings due to increased efficiency through reduced water consumption, to remain one step ahead of regulation, and to protect brand value by showing accountability and responsibility for environmental responsibilities with respect to water.

Companies cannot afford to not actively look at their own impacts and helping to shape a more sustainable global future. Reporting on forward looking indicators lets a company tell its story about how it is going to adapt and innovate to mitigate risk that water shortages and more broadly climate change could cause. GRI ‘leading’ indicators relating to water and more broadly climate change include: Percentage and total volume of water recycled and reused; Financial Implications and other risks and opportunities for the organization’s activities due to climate change; and Public policy positions and participation in public policy development and lobbying initiatives.

The GRI Guidelines recommends that companies include a statement from the most senior decision maker of the organization about the relevance of sustainability to the organization and its strategy. In this statement companies should present their overall vision and strategy for the short-term, medium term and long term, particularly with regard to managing the key challenges associated with economic, environmental and social performance. Given the emerging water crisis companies can use this disclosure to explain how they intend to manage their future water impacts.

The benefits of reporting on these water and other environmental indicators include earning and maintaining a license to operate in the public domain for the future, demonstrating a leadership position on one of the most pertinent issues of our time, and earning customers and clients by differentiating the company in the marketplace as responsible on this issue. 

These forward looking indicators and organizational statement also help the company show how it will capitalize on new market opportunities afforded by water shortages – such as introducing new products and services that require less water consumption or improve water access to the world’s poorest citizens. For example, one of the worlds leading providers of lighting solutions, Philips has used the GRI Guidelines to report and manage its sustainability impacts for over five years. Reporting has helped them to look forward and strategically position the company for success in a rapidly globalizing economy with many sustainability risks and unknowns. Philips has created an affordable ultraviolet light that doubles as a water purifier because UV light kills bacteria. This has afforded them a new market segment at the ‘base of the pyramid’ while improving access to clean water for countless people. 

GRI reporting water indicators have been integrated into leading water management tools, such as the World Business Council on Sustainable Development (WBCSD) Global Water Tool, which indicates that these metrics are accepted as a de facto standard with regards to reporting on the issue. Consisting of an input sheet and an online map, the Global Water Tool allows companies to quickly and accurately gather data on key GRI water indicators and make management decisions to reduce their risks and maximize opportunities. Oversight and pilot testing of this new tool was provided by GRI and WBCSD Member Companies such as Alcan, Alcoa, Shell, Dow, Dupont, Rio Tinto, Lafarge, Holcim, Pepsico and Suez.

Lafarge, an international building materials company and piloter of this water tool, has worked to improve its water conservation and has introduced water recycling and closed loop cooling systems in its operations. Lafarge reports that they have achieved a 29% reduction in the amount of water consumed through cement manufacturing between 2000 and 2006. This goes to show water management and reporting around these indicators can benefit companies.

So reporting around water indicators holds water. It not only directly benefits the companies who choose to do so by resulting in improved water management and providing opportunities for all companies that reply on this valuable and scarce resource, but it also goes some way to mitigating the wider water crisis.

Katherine Miles Hill
Communications Coordinator, GRI