Companies increasingly are adding water strategy to their overall sustainability strategies. As result, targets are being established to reduce operational water use and increase water reuse, to name a few. Typically, the overall goal is to reduce the water footprint of an operation. While increased water efficiency and reuse in operations contributes to reducing water risk, it is not the full answer.
The reasons are straightforward. For many companies, the bulk of a company's water risk resides outside of their direct operations and this portion of a water footprint can be the most challenging to "manage." The upstream supply chain and downstream water use by consumers/customers requires innovation in partnerships and in some cases technology. Innovation in partnerships through "collective action" is central to water stewardship.
Beyond mere water management
"Water stewardship" is becoming a common term to denote the adoption of practices that aim to safeguard long-term availability of water for stakeholders in a watershed. Water stewardship can be contrasted with the narrower concept of water management, which deals specifically with addressing water scarcity's immediate direct business costs through more efficient water use.
Water stewardship also emphasizes effective resource sharing alongside efficient resource use.
While water stewardship is gaining traction through frameworks established by organizations such as WWF, Alliance for Water Stewardship and others, it appears that many companies remain focused on water management.
The 2013 CDP Water Program reports (Global 500 and S&P 500) illustrate the point. (The 2014 report, which will be released later this year, may show an increase in the adoption of water stewardship.
Based upon the results of the 2013 water disclosure survey, the report indicates that "over 90 percent of these companies now have water management plans in place, and responding companies report more than 1,300 actions, targets, and goals to reduce their impact on water resources, and thus their exposure to water risks." According to CDP, despite the vast majority of companies reporting that water represents a substantive business risk, most companies are primarily focused on managing water within their own operations. They are not engaging with their entire value chain and other key stakeholders.
What needs to change? When thinking about a water stewardship strategy to manage value chain water risk and to potentially drive business growth, consider the following three key components: engagement, innovation and preservation.
Understanding and managing water related risks across a value chain are more complex than traditional "water management thinking," but companies potentially have the opportunity to reap rewards in potentially improved water related risk mitigation and business growth.
Water is a shared risk which also should be a shared opportunity. Improving stakeholders' access to water fuels economic growth and well-being.
Water drop image by Umberto Salvagnin via Flickr.