What is corporate water disclosure?
Corporate water disclosure is the act of reporting to stakeholders information related to the current state of a company’s water management, the implications of that state for the business and its stakeholders, and how the company develops and implements strategic responses.
Disclosure helps companies:
- Improve their internal understanding of water-related risks, opportunities, and impacts
- Demonstrate good practice to stakeholders
- Establish dialogue with stakeholders and strengthen trust and accountability
The Corporate Water Disclosure Framework
Click on the boxes below to learn more about the types of water-related information companies report.
The Guidelines were developed in collaboration with:
Global Reporting Initiative (GRI) served as a strategic partner throughout the development of the Guidelines.
The CEO Water Mandate Secretariat and project team would like to thank the Mandate-endorsing companies Merck, GlaxoSmithKline, Veolia, Coca-Cola, and Sasol, whose funding support enabled the development of these Guidelines.
What is the CEO Water Mandate?
The CEO Water Mandate seeks to mobilize a critical mass of business leaders to advance corporate water stewardship – in partnerships with the United Nations, civil society organizations, governments, and other stakeholders.
Launched in 2007 by the UN Secretary-General, the CEO Water Mandate is overseen by the UN Global Compact, and implemented in partnership with the Pacific Institute.
Company Water ProfileAn overview of the company’s relationship with water resources, offering a snapshot of water performance, risks, impacts, and response strategies that nontechnical audiences can easily understand. Profiles include the following information:
- The company’s interactions with water
- The company’s water challenges and opportunities
- The company’s commitment and response
- Profile metrics that provide a summary of companywide water performance and risk
- Total and percentage of withdrawals located in water-stressed or water-scarce areas
- Percent of facilities with a water-related compliance violation
- Percent of facilities adhering to relevant water-quality standards
- Average water intensity in water-stressed areas (as appropriate)
- List of hot spot basins where risks and negative impacts are most likely
- Example of a Company Water Profile
Defining What to ReportA description of the process by which a company determines which water-related topics are material (and thus should be reported). The company assesses 1) the significance of water-related topics and associated business risks, opportunities, and impacts, and 2) the influence that those topics may have on stakeholders’ assessments and decisions.
- Guidance on defining what to report
- Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (G4)
Detailed DisclosureDetailed metrics and qualitative information related to a company’s water management, as well as to the specific water management programs and projects it implements. Detailed Disclosure is divided into sections and subsections that illustrate the types of water-related information that companies report. The three major sections of Detailed Disclosure are:
- Current State
Current StateThe status of a company’s operations and the basins in which it operates with respect to water. Reporting the Current State includes three broad categories of information:
- Context. What water-related conditions and trends—at the global, regional, and local levels—are relevant to the company and its stakeholders?
- Performance. How does the company use and affect water resources? In what ways has performance changed over time?
- Compliance. Do company operations comply with applicable regulations, benchmarks, and standards?
ImplicationsInterpreting a company’s current-state information to better understand the consequences to the business and its stakeholders. Reporting on Implications includes three broad categories of information:
- Business risks. How do company and supplier water performance and basin conditions affect the business with respect to profitability, productivity, regulatory pressure, and reputation?
- Business opportunities. How do water-related trends and challenges create opportunities for the company to expand and improve its business?
- External impacts. Do company operations or products create negative impacts on water-related conditions, such as availability, quality, and accessibility?
ResponseThe strategies and actions that a company may take to address the risks, opportunities, and impacts identified in the previous section. Response reporting discusses how the company strategies and actions address those challenges or generate positive impacts. It includes three broad categories of information:
- Policies, governance, and targets. Has the company created systems and developed plans designed to improve its water performance and reduce water-related risks and impacts?
- Internal action. Does the company effectively respond to and manage specific risks and impacts by making changes to its production processes, procurement practices, and product design?
- External engagement. Does the company attempt to respond to specific risks and impacts by advancing the sustainable management of the basins in which it operates?
ContextWater is a uniquely complicated resource for companies to manage and report because its value, availability, and quality vary significantly depending on location. Context reporting describes the assessment and reporting of the basin conditions in which a company operates (e.g., water scarcity and water stress).
- High-level assessment of basins across a portfolio
- Detailed, location-specific assessment of basins where water challenges are pronounced
- High-level assessment of basins in which key value chain actors are located
- Assessments of water scarcity and water stress are included within some Performance metrics
- Understanding basin conditions is an essential aspect of assessing business risks, opportunities, and external impacts
- Datasets and assessment tools for understanding basin conditions
- CEO Water Mandate Online Capacity Platform: Assessment tools
- Defining and understanding water-related terminology (including "water scarcity" and "water stress")
PerformanceUnderstanding water performance (how much water companies use, how efficiently they use it, the quality of wastewater discharge, and so on) helps companies adopt more sustainable water management practices that minimize negative impacts (or create positive impacts), mitigate water-related business risks, and capture opportunities.
- Water withdrawals in water-stressed or water-scarce areas
- Percent of facilities adhering to relevant water quality standards
- Average water intensity in water-stressed or water-scarce areas (as appropriate)
- Percent of facilities with fully functioning WASH services for all workers
- Location-specific performance data
- Water performance in the value chain
- Assessments of water scarcity and water stress (as described under Context) are included within some Performance metrics
- Understanding company and value chain water-related performance informs a company’s understanding of its business risks and external impacts
ComplianceCompliance with water-related regulations as well as with voluntary standards or industry benchmarks may be used as a proxy for understanding a company’s approach to managing water resources. For instance, companies that experience relatively few incidents of noncompliance over time are less likely to have negative impacts on communities and ecosystems and thus less exposure to reputational risk.
- Percent of facilities with a water-related regulatory compliance violation
- Adoption of internal and/or voluntary sustainability standards
- Water-related regulatory compliance violations in the value chain
- Understanding company and value chain compliance informs a company’s understanding of its business risks and external impacts
Business risksWater risk refers to the possibility of an entity experiencing a water-related challenge (e.g., water scarcity, water stress, flooding, infrastructure decay, drought). Many companies are exposed to water risks that can negatively affect business viability over the short or long term. Disclosure on water risks enables audiences to better understand what the performance and conditions described in Current State reporting actually mean for the company and its stakeholders.
- High-level assessment of risks at a portfolio level
- Detailed assessment of risks based on extensive, location-specific analysis at the facility level
- Value chain risks
- An assessment of business risks is based on the performance, context, and compliance data discussed under Current State
- Response strategies should react and respond to the specific risks a company faces, among other things
- Defining and understanding water-related terminology (including "water risk")
- Resources for assessing risks
- CEO Water Mandate Online Capacity Platform: Water-related business risks
Business OpportunitiesFor many companies, water may present opportunities to drive positive business value. For example, customers in water-stressed areas may have more loyalty to companies that are known to have very water-efficient operations, to sell water-efficient products, or to invest in improving local water resources. A description of a company’s water-related business opportunities, especially those related to operations, brand value, and new markets, is an important component of comprehensive water disclosure.
- High-level assessment of opportunities
- Detailed assessment of opportunities
- Value chain opportunities
- An assessment of business opportunities is based on the performance and context data discussed under Current State
- Response strategies ideally react and respond to specific opportunities presented to a company, among other things
External ImpactsA company's water practices may harm people and ecosystems, causing risk to the company, undermining sustainable water management, and potentially impinging on human rights. Key environmental and socioeconomic conditions that can be impaired by industrial and agricultural water practices are manifested in the three components of water stress: 1) water availability, 2) water quality, and 3) access to water and WASH services.
- N/A (compliance used as proxy)
- Impacts on water availability, water quality, and access to water resources and WASH services (including human-rights-related impacts)
- Prioritizing impacts
- External impacts typically result in business risks related to a company’s reputation
- An assessment of external impacts is based on the performance, context, and compliance data discussed under Current State
- Response strategies should react and respond to specific external impacts caused by, contributed to, or linked to the company
Policies, Governance, and TargetsOne key element of Response reporting is a discussion of the company’s policies, governance, and goals related to water management. This enables disclosure audiences to better understand and evaluate whether companies are adequately addressing water-related challenges.
- Commitment to water stewardship and human rights to water and sanitation
- Goals and targets
- Policies, strategies, and governance
- Respecting the human rights to water and sanitation
- A company’s overarching water strategy, and the policies and targets that underpin it, should address and manage the company’s water-related risks, opportunities, and impacts where possible
Internal actionsCorporate water management programs, strategies, and goals are effective only insofar as they drive meaningful change at the facility and basin levels. One aspect of such change is action that improves the company’s operational performance and mitigates the negative impacts associated with the company’s operations and those of its suppliers.
- Improvements in direct operations
- Product innovation
- Value chain prioritization, engagement, and improvements
- Internal actions should advance a company’s water strategies and seek to make progress toward established targets (which themselves should address the company’s risks, opportunities, and impacts)
External EngagementMany water-related business risks stem from the water-related conditions outside a company’s fenceline. Because of this, companies are increasingly pursuing (and reporting) external engagement strategies geared toward improving water resource management at the local, regional, and national levels, thereby potentially mitigating water risk.
- Participation in global initiatives
- Consumer/public engagement and awareness building
- Policy advocacy
- Place-based collective action (e.g., community engagement, basin restoration, data sharing)
- External engagements should advance a company’s water strategies.
- External engagement should seek to manage the company’s risks and impacts which cannot be adequately addressed by means of internal actions