Climate change, droughts, floods and pollution — and how they affect people, economies, ecosystems and societies — are finally capturing mainstream news headlines and attention.
From the aridification of the Southwestern United States to the proliferation of floods across Europe and Asia to the staggering 84 percent decline in freshwater biodiversity globally, water — as the front line of growing climate instability — is capturing the attention of the media, the public and policymakers.
Against this backdrop, the past decade has seen more companies begin to consider how water as a critical resource impacts business continuity and brand value. They’ve also considered how it limits growth. They join a large number of companies and financial institutions that have long understood the impacts of water issues on their value chains, manufacturing operations and reputations. This has led to the question: What water targets should be set?
The problem with net zero for water
The growing interest in water as a critical resource, combined with substantial efforts toward reducing greenhouse gas reductions, has led many companies to approach water in the same ways they have sought to tackle the climate crisis. The problem is that net-zero strategies (and targets), which work in the context of the Paris agreement, do not successfully translate to water. There are several reasons for this:
- Water is not fungible. You cannot, with scientific rigor, replace the water in one location with water from another location or replace water at one time with water from another time and not drive ecological and social impacts. The spatially and temporally dynamic nature of water means that, unlike a common, global carbon pool, water is not the same from one location to another.
- “Net” volumetric targets limit our collective ambition, which is critical to tackling water as a shared resource. Companies that pursue “net-zero water” tend to initially deliver these targets via their owned (direct) operations (when we know that most water use lies further upstream in the supply chain). Achieving net zero within direct operations, given its relatively low water use, is invariably a low bar to clear since it typically represents only a fractional percent of a company’s water footprint. Even if a company achieves "net zero" from a water standpoint, a watershed’s health and the basin-related risk facing supply chains will not be addressed. A "net" lens on the issue constrains our ambition to fundamentally address complex basin water challenges and, in turn, deliver business, ecosystem and societal value.
- Net zero is a concept rooted in target-setting and reporting, not in business strategy. The origin of a net-zero target is driven by public relations and reporting ESG goals. It is not built on what companies need to ensure sustainable, resilient, thriving value chains that are generating long-term value. Water strategies need to be borne out of business value creation, in a way that also generates value for society and nature, not out of reporting, rating or ranking requirements.
As a critical environmental, social and economic resource, water is fundamentally different from carbon. We need to get away from target-led approaches such as "net-zero water" and reorient towards approaches rooted in strategy and impact.
Water strategy: Why so slow?
Despite water ranking consistently as one of the world's great economic risks, and a corresponding rise in target-setting on water, on-ground progress and meaningful action have been slow. This lack of urgency is due to several factors such as the low cost of water ("noise on a profit and loss statement"), a lack of understanding of the true business value of water, a lack of transparency and common metric for measuring water scarcity, and ultimately, the decision by many to frame water as a CSR and ESG reporting issue rather than an issue of corporate strategy.
We believe it is time to constructively challenge the increasing adoption of net-zero as a way to frame water strategy, now and with urgency.
Given the immediacy of the impacts of climate change, the growing issues of social inequity when it comes to access to safe drinking water, sanitation and hygiene and the freshwater ecosystem collapses we’re witnessing, scaling ambition in the right direction is critical at this time.
Continuing to frame "net zero" as a water strategy distracts businesses, NGOs and governments from working toward deeper and more fundamental systemic shifts in governance, which are essential to shift our collective water use trajectory. If we do not change paths and drive deeper impacts at the basin level — typically measured through the ecological integrity of freshwater systems — businesses will continue to undermine the infrastructure they require to survive, let alone thrive, in the future.
Instead of net-zero water strategies, we advocate that corporations embrace water strategies rooted in value creation for business, economies, society and ecosystems. Such strategies need to be supported with transparent monitoring to quantify not only corporate performance and specific outcomes, but they must also track basin status including environmental, ecosystem and societal impacts.
If we are serious about saving our freshwater ecosystems, we need to rethink the roadmap ahead and move beyond net-zero commitments. While well-intentioned, the focus on net-zero water is not the right route to water resilience and ultimately, water security. The very survival of our planet’s freshwater systems may depend on getting this right, so let’s flow past net-zero water and onto something more meaningful and impactful.