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Two Steps Forward

BSR 2010: Water Reporting's Rising Tide

As water rises to the top of some companies' agendas, there's a flurry of activity taking place: companies taking stock of their water impacts, and the various places it flows through their operations or supply chains. Many of them are taking efficiency measures or making reduction commitments, or even pledging not to negatively impact water tables in areas where they operate.

But how do you measure all this -- and report it?

Therein lies a thicket of questions and challenges, the focus of a session at this week's BSR conference in New York. Two water-intensive companies -- SABMiller and Intel -- along with a leading nonprofit promoting corporate disclosure on carbon and, more recently, water -- the Carbon Disclosure Project (CDP) -- brought some of the challenges and opportunities to light.

There's growing interest among investors in data on companies' water use and impacts, at least in some sectors, such as beverages and semiconductors, the two industries represented here. But how to report is the question. "We still have a lot of work to do on metrics," said Chrystina Gastelum, who manages and develops the U.S. CDP Supply Chain program. CDP is looking increasingly at water because "there's this intimate connection between water and carbon." Moving and treating water represents a significant energy cost for companies and communities alike.

Gastelum quoted her boss, Paul Dickinson, CDP's CEO: "If climate change is the shark, then water is the teeth."

Last year, CDP launched CDP Water Disclosure, an initiative which seeks to increase reporting on water-related risks and opportunities, especially by companies operating in water-intensive sectors. It received responses from 302 of the companies it queried, though metrics used by the companies were inconsistent and, in some cases, nonexistent.

The problem is that, unlike carbon, doing a water footprint analysis is early stage. And water intensity varies widely among companies. "Everyone says, "'It's the supply chain,' but that was a tiny part of it for us," said Gary Niekerk, director of global citizenship at Intel. Intel found that two-thirds of its water use occurs in manufacturing, 26 percent is energy use, and only 6 percent is found in the materials that go into Intel's products.

The company has worked hard to reduce the amount of water used in the production of microprocessors, but it also found other, even bigger opportunities just outside its operations.

For example, Niekerk said, Intel calculated that every dollar it spent on water-saving community grant projects yielded $10 in water savings. That begged the question: Would it be better to spend, say, $10 million on internal water-efficiency measures or in community grants? Said Niekerk: "The question is if you spend it externally, what does that get you? Are you greenwashing? Are you trying to avoid addressing your own water use? It's challenging."

Challenging, indeed.

One challenge, Wales said, is the lack of good data. "One of the things we discovered when we started developing local action plans is that the water data either isn't very good or isn't there. In India, for example, there's no awareness of water. At many sites around the world, we've had to do hydrological studies to understand the local water issues."

So, how do you report these things in a way that's meaningful to stakeholders? Maybe you don't. "For me, reporting is not so important," said Andy Wales, head of sustainable development at SABMiller. "Transparency about what we're doing is important. It's important to report what we're beginning to see, but trying to condense it to a reporting framework is less important."

Image CC licensed by Flickr user Photography_Gal.

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