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Water stewardship: Tell me, show me, prove it

Companies such as Coca-Cola, DIAGEO and BASF are stepping ahead of the crowd when it comes to proving their water stewardship strategy.

My last column generated an online discussion about the overall role of "collective" action in water stewardship strategies and the role of the Alliance for Water Stewardship (AWS) standard and certification.

Before we dive into the conversation, an overview of AWS’s mission and standard: "To lead a global network that promotes responsible use of freshwater that is socially and economically beneficial and environmentally sustainable." The organization achieves its mission through the International Water Stewardship Standard (aka the AWS Standard), which "drives, recognizes and rewards good water stewardship performance." Since my last GreenBiz column, I also have had several discussions with colleagues about this topic and about the recent AWS Water Stewardship Forum.

The online dialogue and subsequent conversations reminded me of a comment from a colleague about sustainability reporting and an article by Peter Bakker, president of the World Business Council for Sustainable Development.

Let’s start with my former colleague. Several years ago, this person commented that sustainability reporting was moving from "tell me and show me," to "prove it." His point was that sustainability stories by companies are no longer compelling enough signs of progress, and that stakeholders want proof that programs are having an impact.

My colleague, along with many others, was correct — storytelling is moving to the "prove it" phase. In large part, that shift is being fueled by deepening stakeholder engagement and the adoption of social media. Stakeholders easily can comment on how well (or not) a company is performing with regards to sustainability performance in water, climate change, waste, etc. Essentially, we are at the point where anyone with a social media account is a stakeholder.

Now, onto the article by Peter Bakker. In 2013, he published an article in the Harvard Business Review titled "Accountants Will Save the World." The essay was a recap of his previous speech at the United Nations Conference on Sustainable Development in Rio (aka Rio+20). His position was that "to get all businesses involved in solving the world’s toughest problems, we must change the accounting rules."

I believe Bakker is correct. I also believe that this sentiment aligns with the shift in stakeholder expectations that companies "prove it" when it comes to reporting on sustainability initiatives of any type. With its standard and certification effort, AWS is responding to this. My support of Bakker’s statement that "accountants will save the world" is also shaped by my experience working at a global consulting, tax and audit firm: the "prove it" argument is now moving to auditing activities. 

A few data points support the notion that companies are willing to move to a "prove it" approach. The Global Reporting Initiative (GRI) has refined and expanded its water reporting guidelines with GRI G4 Water, and AWS has gained more corporate support. For example, Nestlé Waters recently announced plans to certify 20 of its factories according to the AWS standard by 2020. What's more, AWS’s member base is growing significantly as companies seek a standard to guide their water stewardship program and to transparently communicate commitments to stakeholders. Members include companies such as Coca-Cola, DIAGEO, BASF and many others. 

So where does the need to "prove it" leave us? My view is that first and foremost, companies need a water strategy that aligns with their business strategy. This includes addressing environmental and social dimensions of water.

An essential part of water strategy is the ability to quantify performance and be transparent with stakeholders. Transparency could include a commitment to a standard and certification such as AWS. However, some companies may not opt for standards and commitments. They might choose, instead, to have a clearly defined strategy and to be transparent about their performance.

The bottom line for me is that with respect to water strategy, companies need to be transparent (or radically transparent) with stakeholders to build and retain the trust.

Everyone has an opinion about water: It is deeply personal. Consequently, proactive engagement and transparent performance disclosure and communication are expected. While storytelling has value, it is no longer adequate in a water-constrained world where everyone has an opinion about their water.