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Data limitations

Water accounting methodologies use data as inputs that serve as the basis of their analyses. Input data can describe corporate water use and discharge or the local water resource context (e.g., local water availability, access to water, etc.). Which types of data are used, and at what resolution, are key components in determining for what applications each methodology is most useful. Further, the data generated by the databases imbedded with these various corporate water accounting methodologies are of key importance to their overall effectiveness. However, data can be, and often are, quite lacking in many different regards. Indeed, at present, insufficient data is one of the biggest limitations to meaningful water accounting, and therefore companies’ understanding of their water-related risks and impacts. This section will explore three different types of data-limitations issues in water accounting, as well as the implications of these limitations on a company’s ability to derive meaningful results. These three types of limitations are:

  • Inadequate databases
  • Lack of access to data
  • Insufficient granularity of data

Inadequate databases
Water footprinting and LCA often use pre-existing databases in order to inform or supplement their analyses. Both methods depend on databases of average water uses when direct data are unavailable. For instance, companies often use databases that include the average amount of water needed to grow a certain type of crop (and often specified by irrigation type), and to a lesser extent the average amount used for a particular manufacturing process, if they do not have the money or time to measure such water use directly. The most common databases for evapotranspiration and crop growth are the EPIC model and the FAO’s CROPWAT model. LCA also uses databases as a way to understand the local water resource context. Perhaps most commonly, LCA uses global water stress indexes that include the approximate amount of water available in many different locations around the world.

However, as of now, these databases are in almost all cases insufficient or could use improvement. Databases used to estimate averages are typically simply not available. When they are available, they are often not specific enough (e.g., average crop water use but not specified by irrigation type or climate type). Furthermore, the use of such databases would not reveal if a company or facility was particularly efficient or wasteful in any particular area (compared to averages) and therefore would not be useful in identifying areas for improvement that could be addressed relatively easily and result in high water savings. Databases used to understand the local water resource context are more commonly available, yet are often available only at the national level and often use methodologies that can be misleading. Nationallevel data on water stress is often not useful because many nations have watersheds with drastically different water availability (e.g., the American Southwest and Pacific Northwest regions of the United States). The most common indicator for water stress is simply the volume of physically available water per capita. However, this measure obscures the potential for limited access to water due to economic problems, a governance deficit, or inadequate infrastructure.

Lack of access to data and databases
Companies often do not have access to the data necessary to conduct meaningful analyses of their water use and discharge. This can be due to inadequate internal and supplier measurement practices, insufficient data collection of external conditions by the appropriate parties, or databases of external conditions that are not publicly available due to political reasons.

Companies, particularly SMEs, do not have the infrastructure, employees, or systems in place to regularly and comprehensively collect their water use and discharge data. This can be due to financial limitations, lack of technical expertise, or the fact that until recently accounting for water use has been relatively low on companies’ list of strategic concerns and therefore companies have not implemented effective data collection systems. In order to understand their waterrelated risks, companies must invest in their capacity to conduct assessments of their water use and discharge, as well as the status of the watersheds in which they and their suppliers operate. In many cases, companies buy their goods as commodities, and are not aware of the upstream impacts of their purchasing choices. In the same way, the global market means that goods are shipped worldwide through the efforts of purchase and sales agents who know (or disclose) little about either the upstream or downstream water situations relevant to the goods they handle.

Even when databases of external conditions do exist, governments or private interests that manage them may be unwilling to share them with companies or the public. For governments, this may be due to a fear that data revealing that the country is under high water stress might deter companies (or their investors) from their jurisdiction. For private sector actors, this may be driven by profit motives. In these situations, companies often have to collect their own data regarding the local water context to the best of their ability or try to encourage governments and private practitioners to become more transparent with their water data.

Insufficient precision of data
Another way in which the data underpinning water accounting methods can be limiting is in their granularity/resolution. Using data that shows the watershed (and perhaps the location within the watershed) from which water was taken or wastewater was discharged can be incredibly valuable in helping determine how that use might impact others in the watershed. For example, a company that knows where its facilities are using water in a system compared to where other users are withdrawing that water can let them know to what extent they are affecting others’ access to water. Similarly, adequate temporal resolution of water use data can allow companies to assess water-related impacts and risks during different seasons and at different points in the hydrologic cycle. However, as of now, water use data is typically presented as an annual total.

Finally, in addition to the problems posed by insufficient data, it is also important to note the limitations of quantitative assessments of water use, discharge, and impacts in general. Though certainly effective at hotspotting certain water-related risks and identifying physical water stress, quantitative analysis is not able to show less concrete issues, such as mismanagement of water services, governance deficits, the attitude of nearby communities’ toward the company, and a number of other societal and political factors that cannot be measured. These factors can create risks for companies just as easily as wasteful water use or physical water scarcity.

For instance, a company can use water quite efficiently and operate in a relatively waterrich area, but if the government that manages water resources in that watershed does not have the capacity or desire to manage water sustainably and equitably, the company will be exposed to risk. For this reason, in addition to quantitative corporate water accounting, companies should invest time and money in better understanding the systems that manage water for their facilities and the communities and various other water users that are served by those systems.

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