PLANETARY BOUNDARY #6 FRESHWATER USAGE: The impact of corporate water use

For the past seven years, Article 13 have reviewed how the world’s largest 240 companies [1] assess their performance and impact against our planetary boundaries and social thresholds

[2]. This year, we extended this research to calculate the combined impact of these companies on certain boundaries and thresholds – carbon, water and voice. Here’s our second summary on water.

The impact of water scarcity is huge, but water usage reduction targets are small

Of the 240 companies reviewed, 82% disclosed the amount of water they used in their most recent sustainability report [3]. Collectively, each year these companies use over 16.5 billion cubic metres [4]. This is an equivalent amount of water to two Loch Ness’s or 6.6 million Olympic size swimming pools [4].

44% of the 240 companies have set publicly available targets to reduce their water usage, with 31% setting absolute targets [5]. Even with the achievement of these targets, it can be estimated that the total volume of water used by the 240 companies in 2025 would be 15 billion cubic metres by 2025 – just a 9% reduction from the 2018 values.

With the world’s population expected to grow by 12.5% by 2025 these targets are falling short.

Furthermore, only 27 of the companies report if their target refers to regions of scarcity

With the UN predicting that 33 countries will be facing extreme water stress by 2040 [6] – there is a critical danger that the lack of context in corporate targets fails to address the local areas which are most vulnerable.

The corporate sector needs to address its real impact on the planet’s resources and base targets on what the world needs them to do.

• Measure water use and set reduction targets – we are running out of water

• Set both absolute and intensity targets for context of overall amount used

• Set context-based (geographic) targets to focus on water scarce regions as a priority

There will be increasing attention paid to organisations operating in water scarce regions and how they are ensuring fair access to clean water for all.

Water is fundamentally a shared resource, so solutions need to involve all water users (now and in the future) – from agriculture to nature, and from local populations to other business users. Solutions include:

  • Working with a range of partners to protect water resources at a watershed level and improve access to clean water and sanitation

  • Working across supply chains to set targets and engage all water users in programmes.

Water ‘quality’ also needs to be considered. It is not just about how much water companies use, it’s also about how they return the water back to the watershed as they ‘took it’ (e.g. quality, temperature, pH etc.).

Alongside corporate water usage we need to consider the role of water as a basic right for humanity.

Social Threshold #1 Water & Sanitation is measured by the % of the population without access to improved drinking water. UNICEF & the World Health Organisation report that 1 in 3 people on the planet don’t have access to clean drinking water [7]. Our research showed just 3% of companies setting targets to help address this.

Beyond the ethical and moral case of ensuring everyone has access to clean water as their human right, there are commercial risks.

Industries that rely on water for agriculture, operations and/or manufacturing are most vulnerable to water stress. It is a finite resource, and competitively sourced. While desalination is touted as a solution in places, it is costly and not without its own environmental complications, such as raising salt levels in local waters beyond the capacity for local biodiversity to cope. Without a regular continuous supply, such industries (and others) may have to raise prices or shut down. Risks related to water, by companies include:

- Laws and regulations, compliance costs

- Cost, availability and quality of water

- Availability and impact on production, including cost of restoring operations

- Impact on reputation and brand impact

- Navigable water interrupted and impact on supply chain

For all the corporate sector to play its part in the achievement of global - and local -water targets, it must address its real impact on the planet’s resources and base reduction targets on what the world needs them to do.

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1. How were companies selected

Companies were selected according to four factors to ensure a representative sample size. Ability to impact planetary limits (e.g. largest companies globally by revenue); Public commitment to sustainability (e.g. constituents of sustainability leadership rankings such as Corporate Knights); Representatives of largest companies by regional stock exchange and by super-sector listing. Representatives by geography (largest companies for different regions: Europe, Middle East and Africa, North America, South America, Asia and Australia)

2. Planetary boundaries and social thresholds

Planetary boundaries: In 2009, Johan Rockström and 28 scientists identified the nine processes that regulate the stability and resilience of the Earth system. They proposed quantitative planetary boundaries. Crossing these boundaries increases the risk of generating large-scale abrupt or irreversible environmental changes. Social thresholds: In 2016, Kate Raworth (Oxfam) combined the nine planetary boundaries with twelve social thresholds, which set out quantifiable basic needs for all people. The planetary boundaries and social thresholds were key scientific inputs to the UN Sustainable Development Goals

3. Withdrawal vs. consumption

- Consumption refers to the amount of water the company actually used which was not returned to the source, whereas withdrawal refers to the total amount of water the company withdrew in total, including the consumed value, but did not necessarily use. Usually if a company would return the water not consumed to the original source.

- Consumption values were used over withdrawal values as this was the actual amount each company used.

- For certain companies only the withdrawal value was available and was used as a replacement for the consumption value.

4. Data sources

- Latest company CSR/Sustainability Report

- The most recent published values were used, for the majority of firms this was the 2018 values, where 2018 data was unavailable the most recent available data was used

- All values obtained were converted into cubic metres. When a company used gallons, it was assumed that this metric was US liquid gallons rather than imperial gallons.

Loch Ness has a volume of 7.4km3. Thus, double this volume equals 14.2km3 which is below 16.5km3.

- The annual water consumption refers to how much a company uses in a yearly period.

5. Absolute vs. Intensity values

Absolute targets refer to a total quantity. Intensity targets refer to the reduction in relation to a secondary unit of measure (e.g. per tonne of product/ per unit of economic output).

Only absolute values were obtained for freshwater consumption rather than intensity as the majority of companies examined did not state their intensity values. For companies without targets – for the purpose of this calculation, it was assumed their water use would stay the same.



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