Water Footprinting Makes a Splash

[Editor's Note: This is part of a series of articles excerpted from our annual State of Green Business Report. The report takes a close look at the data behind the green business movement to track whether we're moving the needle on corporate sustainability. Download the free report here.]

Water has been rising as a sustainability issue. In past reports, we've referred to it as "the new carbon" due to its parallels to companies' efforts with their greenhouse gas footprint: understanding and measuring it, reducing it, even offsetting it to the point of being "neutral." Companies in water-intensive industries, such as beverages, semiconductors, electric power, and chemicals, have been increasingly addressing their impacts over the past several years. But now attention has trickled down to a broader array of companies, as the tide of attention reaches a new high-water mark.

State of Green Business

Business headlines about water these days almost always contain the word "risk." "Why Water Is A Risk And Opportunity Your Company Can't Ignore," "Growing Water Scarcity And Its 'Hidden' Risks To Investors," and "The Consequences of Ignoring Water Risks in the U.S." are just three of several such headlines GreenBiz.com ran during 2010. These stories stem from the growing understanding of how global water issues will likely affect company operations in the coming years, as droughts, floods, climate shifts, growing populations, increasing consumption, and other factors cause manufacturing perturbations, disrupt markets, displace customers, lead to energy shortages, and otherwise wreak havoc on productivity and profits. All of which places water security squarely in the boardroom, where it is becoming a strategic issue.

For boards, the first order of business is inevitably getting one's arms around the nature of the risks. That means conducting a water footprint analysis, a means of understanding how much and what kinds of water are used in the making of products and running a business, including the water used by suppliers as well as customers -- upstream and downstream, as it were.