Scoping Water Challenges and Action Areas

 
 

Your company’s water-related concerns will typically derive from one or more of three risks—physical risk, regulatory risk, or reputational risk—or a commitment to pursue water stewardship opportunities in response to company sustainability imperatives. The process of characterizing your water-related challenges and identifying your collective action interventions builds from exploring the following questions:

  • Question 1: What are your priority water-related challenges in the catchment of concern, and what socioeconomic drivers and underlying deficiencies in the water system led to the challenges?
  • Question 2: Which type of interventions (action areas) will best address the problems you have identified?

Elements of Collective Action Preparation

 

Characterizing Your Water-Related Challenges and Underlying Causes

Your company’s water-related risks and opportunities stem from the nature of the catchment’s water challenges and your company’s vulnerability to them. These challenges will tend to be associated with:

  • An overallocation of, or a competition for, available surface water or groundwater;
  • A lack of access to, or an inadequate reliability or quality of, a water supply;
  • Deterioration in the quality of water resources and the impacts on you or other users;
  • Damage to infrastructure or activities arising from extreme flood events; or
  • The degradation of ecosystems (and the services they provide) through changing flow or quality regimes

While your vulnerability relates to these challenges, your internal company strategies and processes around production, supply chains, and water stewardship support your ability to adapt to or mitigate these challenges. For example:

  • Operations with “junior” legal allocations of water are more vulnerable to supply restrictions during droughts;
  • Just-in-time production is vulnerable to supply disruptions associated with failures in the water system;
  • Company pretreatment facilities can mitigate a deteriorating quality of water supplies;
  • Diverse supplier locations are less vulnerable to localized water shortages.

Collective action is typically warranted only when your internal strategies cannot effectively manage the suite of physical, regulatory, or reputational risks associated with external water-related challenges, or effectively support the capture of desired water stewardship opportunities. A collective action imperative for your company will typically emerge in response to an existing or potential failure in the water system, within an environment of increasing awareness and competition over water. The figure below depicts how your water-related interests in collective action may emerge from company- and community-level water challenges. These in turn have their origin in how water resource conditions are affected by drivers, such as economic development, that place demands on the water system. Water-related concerns and challenges that require an intervention based on collective action (related to the recognition of shared risk) arise primarily because the water management system and its constituent governance, management, and infrastructure are not adequate to address negatively trending water quantity, quality, or ecosystem conditions, or to ensure sufficient access to clean water and sanitation services.

 

Characterizing Water-Related Challenges, Causes, and Risks

The first, critical step in preparing for collective action is to diagnose the nature of your water-related risks and opportunities within the context of the water management system. This diagnosis will provide clarity as to the topics you must address via a collective action initiative, and the type of interventions (action areas) that your collective action will pursue. This diagnosis will also support your ability to identify the types of individuals and organizations that your collective action will need to engage (as addressed in Identifying and Characterizing Prospective Participants). Characterizing Water-Related Challenges and Identifying Collective Action Areas offers detailed descriptions and analysis of the elements depicted in the figure above.

 

Selecting Your Intervention (Action Area) Options

Having characterized the water challenges and associated causes, you are now in a position to consider the collective action interventions best suited to address them. The box at right introduces a list of 12 potential collective action interventions. This list is not designed to be exhaustive, but it can provide you with a sense of the options. These areas reflect the most common water-related collective actions presently pursued by companies, and align with the action areas used in the CEO Water Mandate’s Water Action Hub to profile the interests and activities of potential collective action partners on a water basin basis. The action areas cover a wide range of specific interventions, from working with farmers on improved land-use practices (sustainable agriculture) to sharing watershed monitoring data with local government water managers (monitoring and knowledge sharing).

Typically, a range of specific activities, measures, or interventions is associated with each of these areas. Keep in mind that the action areas you focus on relate both to the nature of the water problem (and its causes) and to the strategic priorities (reflecting water risks) of your company. It is also important to recognize that the selection of an action area will influence which interested parties should be considered in implementing the collective action. Defining the nature of your intervention is addressed in Designing Collective Action Engagement, but at this stage it is adequate to identify and broadly characterize one or more relevant collective action areas. Case 5 speaks to the specifics of how one company as its water challenges and formulated its action areas.

 

Potential Collective Action Areas

  • Efficient water use
  • Effluent management/wastewater reclamation/reuse
  • Community-level access to safe water, sanitation, and hygiene (WASH)
  • Storm water management and flood control
  • Infrastructure finance, development, operation, or maintenance
  • Sustainable agriculture
  • Climate change adaptation and resilience
  • Ecosystem or source-water protection/restoration
  • Monitoring and knowledge sharing
  • Engaging in participatory platforms
  • Public awareness and education
  • Improved water governance, and policy development and implementation

Scoping Water Resource Management Challenges and Action Areas

Sasol, a global integrated energy and chemicals company with its main production facilities in South Africa, has recognized water security as a material challenge to its operations, which are highly reliant on the inland Vaal River system. South Africa is a water-stressed country, and extensive studies by its Department of Water Affairs (DWA) show that water shortages in this area could arise in the future unless action is taken. Sasol has responded by undertaking various water stewardship initiatives as part of its broader water management strategy.

Sasol is a signatory to the UN Global Compact CEO Water Mandate, which is the cornerstone of the company’s water management strategy. This provides the framework in which Sasol addresses the physical and regulatory risks associated with its water footprint. Two such collective action initiatives guided by this framework are:

  • Local-level, water-saving projects that Sasol co-funds and manages “beyond the fenceline” in municipalities; and
  • Participation with national government agencies on the Vaal River System Strategy Steering Committee and in the Strategic Water Partners Network.

Collective recognition that water demand exceeds the yield of the Vaal River system was the key driver of Sasol’s engagement with the Emfuleni Municipality. The objective was to free up water and ease supply to all users in the catchment area, while supporting the government in reaching its water-savings targets. Sasol uses about 4 percent of the catchment yield; municipalities use approximately 30 percent, of which water losses can be as high as 45 percent due to the aging infrastructure. The company recognized that by working beyond the factory fence, bigger advances could be achieved in enhancing water security in the catchment area.

Sasol approached municipalities to implement water conservation initiatives that would make a substantially greater contribution to improving water security than what would have been realized had the company focused only on enhancing water management at its operations. An example of this local-level engagement is the collaboration between Sasol, Gesellschaft für Internationale Zusammenarbeit (on behalf of the German, British, and Australian governments), and the Emfuleni local municipality, which has attracted funding from other private sector partners for infrastructure improvements. Additional funding will come from the water savings realized from the project. This approach was designed to consider the long-term sustainability of the project.

The Vaal River System Strategy Steering Committee, on which Sasol participates, is another example of the company’s collaborative approach. Sasol actively engages on this platform, informing decisions regarding infrastructure, planning, and resource management. As a large strategic user of water in the catchment area, Sasol has taken a leading role in working with external partners in promoting responsible water management and improving water security. The Strategic Water Partners Network (SWPN) is a collaborative initiative between the Department of Water Affairs, the Water Resources Group, the World Economic Forum, and a number of key private sector partners in South Africa. The objective of the SWPN is to jointly address the water risks facing South Africa, with the aim of reducing the gap between water supply and demand. Priority focus areas of the SWPN are water conservation, effluent treatment and reuse, and the reduction of the water footprint in supply chains. The collaborative approach of the SWPN will leverage available government and private sector resources in order to engage risk-reduction opportunities on a larger scale than what would have been possible by any of the participants on their own.

Sharing of knowledge and experience is a primary driver on platforms such as the SWPN and the Vaal River System Strategy Steering Committee. It is here that collective action takes root and can be elevated to a level where all stakeholders share in the responsibility of managing the water supply in an area where security is a material challenge. These forums drive collective action and promote the long-term planning and action required to ensure this precious resource is protected and used wisely.

 

Bringing It Together

The figure below provides an example of a process map your analyses could produce. The map tells the story of a water-related challenge you face and possible action areas you could pursue to address it. In this case, the challenge is water quality deterioration from sediment runoff. The water system deficiency is a lack of land-use standards that prevent sediment from reaching surface water, and the water resource system driver is an expansion of agricultural activity that has increased the sediment load beyond the assimilative capacity of the water body. In this case, a variety of actions are worth considering:

  • A direct intervention with local farmers to improve land management practices (Action Area A); or
  • Three interventions—collective action areas that blend into a single integrated approach—directed at altering water governance and regulation of the water management system as it applies to agricultural land use practices (Action Areas B, C, and D).

From Challenge to Action

Your specific analysis will produce results unique to the prevailing conditions in the catchment(s) where you operate. The process map is designed to provide you with both a framework to help you ask the right questions and a structure for your analytical results. As with the example portrayed in Figure 5, you will need to fill in specific details at each level of your review (e.g., identifying sedimentation as the specific water quality problem, and the lack of agricultural land use controls as the water resource management system deficiency).

Having completed such a review, you are now prepared to explore the landscape of external parties for possible participation in the collective action. Also note that, at this point, you will have sufficiently characterized your sense of water-related challenges and potential action areas to use the CEO Water Mandate’s Water Action Hub, where you can connect withother parties facing the same challenges, and that areinterested in the same collective actions in your catchment of concern.

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