What makes a good corporate water strategy?

The foundation of any water strategy is an understanding of business impacts, risks and opportunities at the local, watershed level. This is a more nuanced exercise than just mapping operations and supply chain activities against maps of water scarce areas – although this is an excellent starting point. As water risks can also encompass quality, infrastructure limitations, regulatory and financial barriers, and competition, the analysis for each watershed may be complex. Forward-looking companies should find out what the local issues and priorities are and look for ways to partner on solutions.

Just as companies should assess the breadth of their geographic impact, they should also tackle water issues with a broad array of tools and approaches. CDP stresses that, “Companies should include actions, targets and goals for community engagement, supply chain management, watershed management, transparency and public policy.” Respondents have a long way to go as very few companies reported goals in these areas:

• Community engagement – 6%
• Watershed management – 3%
• Transparency – 1%
• Public policy – 0%

As disappointing as the CDP findings are, there are some companies that are engaging unusual partners and pioneering water strategies that are comprehensive and effective.

• Beer manufacturer MillerCoors’s five-pronged water program includes conducting watershed risk studies in watersheds serving key breweries. As water footprinting revealed that 95 percent of the water behind each bottle of beer comes from the farm, MillerCoors has gotten creative in encouraging change at its suppliers’ farms. An innovative program in Idaho connected barley farmers with experts from The Nature Conservancy to improve water efficiency.

• Acknowledging the significant impact beverage production has on local water supplies, one of Coca-Cola’s far-reaching goals aims to “safely return to communities and nature an amount of water equal to what we use in our finished beverages and their production” by 2020.

• One of four pillars of the water strategy of retail clothing company Hennes & Mauritz AB’s (H&M) includes partnering with local and regional governments, NGOs and other companies to improve water management in river basins in China and Bangladesh.

How should companies proceed?

To check whether water strategies are hitting all the marks, there are at least two excellent paths available. One is reporting to CDP itself. The process of answering questions about risks and goals can reveal gaps and help to reset corporate agendas. The Ceres Aqua Gauge is another framework companies can use to assess their own efforts at measurement, management, stakeholder engagement and disclosure on water. But no framework is a substitute for a good understanding of the unique issues in each watershed your supply chain touches.