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Connect the Drops

Report: How the Biggest Companies Score on Water Sustainability

Even though all companies depend on water resources, just over half are actively managing their use, and many of those are in California, Kirsten James of Ceres writes.

Written by Kirsten James Published on Read time Approx. 4 minutes
Farm workers graft grape vines during the California drought of 2015. Agriculture is just one business sector impacted by water insecurity.MARK RALSTON/AFP/Getty Images

Cape Town is expected to run out of water in a few months. Just plain out.

California endured five years of drought with the help of urban areas cutting back water consumption and farmers fallowing fields. During 2015 alone, the state’s agriculture sector lost nearly $2 billion and 10,000 farmworker jobs.

The 2012 drought in the Midwest dented the corn harvest by 15 percent and caused a global spike in corn prices.

The risks from water insecurity span the globe and have deep economic impacts, as many in the business sector have come to understand. Without water to grow alfalfa for cow forage, you can’t produce milk and beef. Without water to cool data centers, the servers that power our smartphones and computers won’t run.

Some companies are catching on. More than half of the largest U.S. corporations now actively manage their water use and water resources, according to a recent Ceres analysis of more than 600 publicly traded U.S. companies that represent 80 percent of the country’s market capitalization.

The report, “TURNING POINT: Corporate Progress on the Ceres Roadmap for Sustainability,” scores companies on 20 key expectations laid out in “The Ceres Roadmap for Sustainability” to assess how seriously and effectively they are responding to sustainability challenges – including climate change, human rights abuses and, of course, the global water crisis.

When it comes to water, the report found that 55 percent of the companies have at least general commitments to manage water resources through efforts such as water use efficiency.

On the flip side, 45 percent of the assessed companies do not disclose any evidence that they manage water-related impacts in any formal way. And only 20 percent of the 600 have set time-bound, quantitative targets to manage impacts to water resources.

Every business depends on water in some way, so it’s short-sighted that all companies don’t work to manage water resources. In the aftermath of California’s drought, though, we’re seeing positive change, with water-efficiency efforts multiplying and new watershed restoration and recharge projects popping up.

Many of the water stewardship leaders are based in California or have significant operations there.

One is Clorox, the century-old Oakland, California-based company that has expanded its products from cleaning supplies to consumer household and healthcare products. Clorox was noted for making water stewardship a top executive responsibility. Its sustainability steering committee includes five C-suite executives and two vice presidents. Water resource management is seen – and experienced – by Clorox as a business issue and, accordingly, the Clorox Global Strategic Sourcing Group is responsible for water efficiency and protection in the supply chain.

Yet Clorox also recognizes the social need for clean water and that its main product – bleach – can be instrumental in providing it. Clorox donates bleach to communities in the developing world for use in purifying and disinfecting water collected from rivers and wells. The company figures it has helped purify water for 25,000 people who live in areas with untreated water.

San Francisco-based Gap is one of three footwear and apparel companies that are held up as prioritizing water management within their supply chains. Apparel and footwear companies use a lot of water for the manufacturing and processing of fabric and leather. Gap, along with Nike and L Brands, set targets to mitigate the impact on local water sources of the chemicals used in their dye houses and laundries. Recognizing the social impact its water use has on communities and workers’ lives, Gap also launched a Women + Water initiative two years ago across its supply chain operations, helping to provide safe, treated water and sanitation access to people living in the communities where Gap products are made.

The Coca-Cola Company, which operates several facilities in California and in numerous locations the world over, also had global social impacts on water in mind when it launched a massive watershed-restoration program, promising to replenish the equivalent amount of water it uses in its products back into watersheds or community water systems. It achieved that goal in 2016 ahead of schedule. The watersheds it replenished and helped restore include those that are home to bottling operations in Los Angeles County and the city of San Leandro.

Another company operating in California that “Turning Point” highlights for its water-management efforts is Xylem, which develops and sells water-saving technologies used by many California water districts.

Xylem set a goal four years ago to reduce water use intensity (or improve water efficiency) in its operations by 25 percent by 2019. To do so it created an eco-efficiency tool to use with other water-measurement tools to gauge water availability and demand factors nearby, taking in population, biodiversity, sanitation and watershed health. All this helped it develop a water-management strategy tailored to regional needs.

In addition to their individual actions, Gap, the Coca-Cola Company, Xylem and 24 other major corporations operating in California became advocates of water conservation and protection policies, joining Ceres’ Connect the Drops network. Connect the Drops companies both commit to their own water stewardship and engage with California lawmakers on key legislative initiatives around sustainable water management and helping all Californians get access to safe drinkable water.

The good news in the 2018 findings of “Turning Point” is that more and more companies understand the business imperative of addressing sustainability risks generally. Then again, the need is greater than ever before as more than 40 percent of the world’s population faces water scarcity and the United Nations estimates that 5 billion people will face water shortages by 2050 because of climate change. Companies not only need to understand their water impacts but to develop and prioritize water stewardship plans to help solve local needs throughout their value chain.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Water Deeply.

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