Current practice in water target setting

Current practice in corporate water target setting

The 2016 Annual Report of Corporate Water Disclosure,¹ published by CDP, indicates that 17 percent of over 600 responding companies are beginning to factor a broader range of contextual issues into their water risk assessments. Considering these issues – such as regulatory changes or stakeholder conflicts concerning water resources – allows companies to develop a more complete picture of the local water context. Recognition of a broader range of stakeholders can also support the identification of a wider variety of shared water challenges. However, the same report also indicates that only 13 percent of responding companies achieved best practice for broad stakeholder engagement while completing their water risk assessments.

Just as companies set water targets for many reasons, they may disclosure of those targets hoping to serve a variety of purposes. The data within CDP’s 2016 Annual Report indicate that reported company targets broadly remain (internally) operationally focused. However, the evidence also suggests that companies are starting to set more externally focused targets as they become more aware of the importance of the shared nature of water challenges. This trend is reinforced by an emerging number of context-based approaches, including BIER’s pioneering Performance in Context Tool (see Box 2), Center for Sustainable Organizations’ Context-Based Sustainability (see Box 1),² and World Resource Institute’s recent work with Mars.³

An argument can be made that in order to effectively demonstrate materiality in terms of water risk mitigation, organizations will need to have a balance of both internally focused operational targets and externally oriented targets that consider:

• The status of the context within which they operate or the suppliers from whom they buy;
• The evolving scientific data and understanding of local water issues; and
• Wider public sector water planning objectives and policy initiatives, such as the SDGs.

 

The continuum from context-informed to context-based water targets

Collectively, we recognize that a shift to CBWTs will not occur overnight. Furthermore, we recognize that these changes are not starting from scratch; companies have a long history of working on water issues in context and, indeed, acknowledging context in their water targets (e.g., very strict – or even zero – water use for sites located in areas of extreme scarcity).

However, many of these approaches are developed unilaterally by companies without participation from relevant stakeholders in the basin. As such, they are quite likely to not fully address the wide range of perspectives and needs (e.g., “sufficiency”) implied by a “contextbased” approach.

We believe that a continuum of approaches (see Figure 1) will likely be required as companies shift from contextual to stronger forms of CBWTs that include more robust, consensus-driven processes.