As water insecurity rises, companies must accelerate their water stewardship

With most of the global population already living in water insecure countries, water scarcity is a pressing and current issue. The private sector, as the largest user of freshwater resources globally, has an important role to play in ensuring water access for all. Water is especially relevant for industries relying on agriculture, which is responsible for 72% of all water withdrawals worldwide. The performance of companies in the food and agriculture sector, therefore, has important ramifications for ensuring sustainable water supplies globally. 

Concerning lack of long-term planning and focus on water quality

WBA’s recently released Nature Benchmark, assessing 350 Food and Agriculture companies and 30 Paper and Forest companies, found that approximately 30% of companies are reporting water use reductions (111) or water usage from water-stressed areas (118). However, only 17 (4.5%) companies have set time-bound targets for reducing absolute water withdrawal. In the supply chain, only 39 (10.2%) companies show evidence of actively engaging with suppliers to reduce water withdrawal, such as through auditing or training programmes, while only 2 (0.5%) companies disclose setting water targets within water-stressed areas in their supply chains.  

In addition to reducing water use, the private sector also has a responsibility to avoid negatively impacting water quality. If improperly managed, water discharges can impact human health or harm biodiversity. Our findings reveal an overall lack of disclosure among assessed companies, with only 13.9% (53) disclosing water pollutant parameters and 2.9% (11) having set time-bound targets to reduce pollutants in their discharges. These findings corroborate the water quality findings of the Ceres Valuing Water Finance Initiative Benchmark, which also finds that water quality is largely overlooked in setting corporate water stewardship targets. Together, these findings indicate a lack of consistent, long-term action when it comes to reducing water withdrawals and water pollution – demonstrating the urgent need for the private sector to focus on these issues within their water stewardship strategies. 

Bridging the gap for water rights  

Companies’ actions on water use and pollution not only impact the environment and biodiversity surrounding their operations and supply chains but also significantly affect the health, livelihoods, and well-being of populations, especially vulnerable communities. Unfortunately, the WBA benchmark reveals that merely 12.3% (47) of companies commit to respecting local communities’ water, sanitation, and hygiene (WASH) rights, with only 4% disclosing preventive and corrective action plans, including addressing water misuse and collaborating with communities for monitoring company impacts. These findings align with Ceres’ Valuing Water Finance Initiative Benchmark, where only 30% of food and beverage companies explicitly state the human right to water and sanitation in their corporate policies, and a mere 14% setting time-bound targets to enhance WASH access for employees, suppliers, or communities. This represents a missed opportunity to benefit both local communities and the environment, posing risks for all stakeholders, especially in the Global South. Companies must prioritize recognizing water and sanitation as a fundamental human right, integrate positive practices within their value chain, and collaborate with governments, communities, and stakeholders to ensure sustainable and equitable water management. 

A few leading practices, but not enough industry action

The Food and Agriculture industry has a significant impact on the world’s water resources, and as such has often been the focus of public scrutiny following conflicts with local communities or damage to local ecosystems. Some companies, however, do show leading efforts: Firmenich, for example, is one of few companies to set concrete targets to reduce Chemical Oxygen Demand production, and also discloses achieving its previous targets. Nestlé demonstrates efforts to provide greater transparency around its water reporting, and discloses its internal system of water analysis, which is applied to all of its factory locations. Showcasing significant effort and an understanding of the importance of water management as a holistic subject, Fonterra’s Living Waters project is a partnership between the company and the New Zealand Department of Conservation to improve water quality and biodiversity in five catchments across the country. 

Despite some examples of positive leadership, overall performance on water in the Nature Benchmark remains insufficient, especially considering the vital role Food and Agriculture companies play in water use, quality, and access. Resources including the SBTN Freshwater Assessment, the CEO Water Mandate, CDP Water Questionnaires, and the Ceres Corporate Expectations for Valuing Water can help companies improve their water stewardship by establishing ambitious targets for water use, quality and access. 

Insights co-authored by Michael Lee and Hernando Echeverri in collaboration with the Nature Benchmark Team.