How to Measure Your Company’s Water Management and Its Impacts

Put simply, corporate water accounting is the mechanism by which companies’ measure and account for their water use and wastewater discharges throughout the value chain. Effective water accounting allows companies to determine the impacts of their direct and indirect water use and discharges on communities and ecosystems, evaluate material water-related risks, track the effects of changes in their water management practices, and credibly report their trends and impacts to key stakeholders. Water accounting also allows consumers, civil society groups, and the investment community to compare different companies’ water risks and impacts in order to inform their actions and decision making. In sum, the ability to effectively account for corporate water use and impacts is essential in helping companies drive improvement and become aligned with external stakeholders’ expectations, as well as their efforts to advance sustainable water management.

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Corporate water accounting today can be seen as serving four general, inter-related applications:

• Operational efficiency, product eco-design, sustainable manufacturing
• Water risk assessment/identification
• Managing water-related social and environmental impacts and water stewardship response
• Communicating water risk/performance with stakeholders

These areas of interest to companies represent the broad types of methods and tools available and are motivated by a number of factors, including pursuit of reduced costs, strategic planning, brand management/ corporate reputation, and corporate ethics/ philanthropy. However, at their root, they are all driven by the desire to identify and reduce water-related business risk (and seize opportunities), whether through building competitive advantage, ensuring long-term operational viability, or maintaining and/or improving social license to operate.decisions.

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Comprehensive corporate water accounting requires a number of different types of data and assessments in order to derive meaningful information. However, in order to contribute to improved corporate management practices and ultimately the sustainable management of water resources, corporate water accounting must also work in unity with a number of other components. While companies have direct control over some of these aspects, they have limited ability to influence others. That said, understanding this broader context—and how water accounting fits into it—is essential for companies seeking to reduce and mitigate water-related risks. Key components of this broader framework are:

• External Water Resource Context and Data
• Corporate Water Accounting
• Public Disclosure and Stakeholder Feedback
• Corporate Water Management and Stewardship
• Stakeholder Water Practices and Strategies
• Sustainable Water Management

The role of water accounting in advancing sustainable water management

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Our analysis focuses primarily on four main methods/tools:

• The Water Footprint Network’s “water footprint”: A method for measuring the volume of water used by any group of consumers (including a business or its products) that is intended to help those consumers better understand their relationship with watersheds, make informed management decisions, and spread awareness of water challenges.
• Life Cycle Assessment: A systems analysis tool designed specifically to measure the environmental sustainability of products (including water use/discharge and many other resource uses/emissions) through all components of the value chain.
• WBCSD Global Water Tool: A free online platform that couples corporate water use, discharge, and facility information input with watershed- and country-level data as a means of assessing water-related risk.
• GEMI Water Sustainability Planner/ Tool: Two free online tools meant to help companies better understand their waterrelated needs and circumstances. The Water Sustainability Tool assesses a company’s relationship to water, identifies associated risks, and describes the business case for action. The Water Sustainability Planner helps elucidate a facility’s dependence on water and the status of the local watershed.

Since the release of this report in 2010, these approaches have continued to evolve and many others have emerged. You can access many of these new and updated approaches in the CEO Water Mandate’s Water Stewardship Toolbox.
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