What constitutes a corporate context-based water target?

Establishing meaningful, legitimate, CBWTs requires a process that accounts for (1) a scientific understanding of the basin’s conditions, (2) local and global policy objectives, and (3) the needs and perspectives of various stakeholders. This section gives shape to the critical components that we believe are needed for a CBWT.

Science as foundation for water targets

Credible context-based efforts are underpinned by a scientific understanding that enables a level of objectivity to water planning, allocation, and accounting decisions. As companies begin to explore CBWT, using a science-based approach offers a strong basis for providing a common understanding of sustainable water use and basin limits.

Setting targets that are based on science has been most notably done in relation to greenhouse gas (GHG) emission reduction targets with the Intergovernmental Panel on Climate Change (IPCC),¹ where the connection is made between specific carbon emission levels and the various impacts on temperature, ocean acidification, precipitation, and other effects that together comprise what is commonly referred to as climate change. This knowledge has helped inform a global goal through the Paris Agreement² – a specific, global parts-per-million level of greenhouse gases that keeps global average temperatures below a 2° Celsius change from pre-industrial levels. Through the United Nations Framework Convention on Climate Change (UNFCCC), this goal is distributed to national carbon emission reduction targets and divided amongst sectors and companies to achieve the desired outcome. This work led to the establishment of the Science Based Targets Initiative,³ providing the private and public sectors with a common goal and a set of meaningful, aligned targets that help all actors contribute to the larger, shared goal of reducing GHG emissions.

The local nature of water challenges and solutions

Although reducing GHG emissions in one area of the world can reap benefits for the rest of the globe, water withdrawal, consumption, and pollution typically have an impact only in the basin in which they occur. Therefore, although Sustainable Development Goals (such as SDG6 on water) can serve as a reference point against which companies can set targets, it is important that they are informed by metrics that account for the scientific understanding in a specific local basin. By using each basin’s unique conditions to inform targets, companies can establish performance targets that contribute not only to public policy objectives, but also to meaningful basin water risk reduction and help to establish a common goal amongst users.

Aligning company targets with public policy

Context-based water targets, to the extent possible, need to be informed by existing, effective public water policy goals, which will, in theory, align water targets with the needs of local communities and ecosystems. Water is a human right that is largely managed and protected by the public sector. Government agencies are often charged with water resource management, provision of water data, water monitoring, and the development and enforcement of local water regulations. This includes financing water-related infrastructure and socio-economic development. In carrying out this role, the public sector also plays a critical role in defining the contextual factors of a basin.

Public sector agencies are commonly charged with determining legal limits to water withdrawals and pollution, based on the cumulative water stress facing a given basin. Typically, these approaches are linked to Integrated Water Resources Management (IWRM) and strategic basin planning.⁴ Allocations set during strategic basin planning are typically defined through the consideration of multiple variables, including environmental flows. In doing so, any trade-offs that are made are likely to be more aligned with social and economic priorities than company priorities.

The lessons learned by the public sector in setting targets for development projects can offer companies guidance on how to begin considering context when setting their own targets.⁵ In addition, there is value in greater alignment of water initiatives being undertaken by the public and private sectors. Companies’ target setting need not be driven entirely by the public-sector agendas. Rather, the shared nature of water presents an area of common ground that can be a useful starting point for developing approaches for context-based targets.

Policy objectives can mean a variety of different things and cover many different topics. They can be set at the local, national, and global levels, and fulfill many different functions, including but not limited to:

1. Guiding how water use is prioritized and how allocation decisions are made in the face of limited supplies;
2. Helping establish water prices;
3. Setting quality standards and human health safeguards through pollution control measures; and
4. Building and maintaining the infrastructure that delivers water services.⁶

Aligning with and building on effective public water policy goals offers a way for companies to collaboratively engage with other stakeholders in implementing solutions to the root causes of water risk. The aim of pursuing CBWTs in both private and public sectors is not to replace formal basin planning and legal allocations. Rather, it is to explore how companies can contribute to broader efforts that aim to respect basin boundaries.

The SDGs offer perhaps the most overarching, universal policy framework with which companies can align their water targets. The SDGs encompass 17 goals that aim to better align government, company, and civil society efforts through a common framework. The SDGs can not only foster alignment among actors within a basin, but also help harmonize efforts across basins and even countries.

The SDG6 targets cover six water priorities that are critical to any basin:

1. Access to improved drinking water;
2. Access to adequate sanitation and hygiene;
3. Water quality and pollution;
4. Water stress, scarcity, and availability;
5. Water governance; and
6. Freshwater-related ecosystems.

By aligning their water-related efforts with the SDGs, companies inherently align with local, national, and global water priorities, and build trust and confidence amongst their stakeholders. Likewise, governments and communities that collaborate with companies to achieve commitments related to SDG6 can benefit from corporate investment, innovation, capacity building, awareness raising, and collective action.

Aligning CBWTs with policy objectives has both moral justification and practical company benefits, including:

• Clarifying the impacts of water stewardship initiatives through collaborative reporting;
• Demonstrating the positive impacts of collective action projects and the contribution of a company or an industry to water management goals; and
• Facilitating clear communication with practitioners and partners in other segments of society.

Establishing shared basic targets with multiple stakeholder groups through the notion of “sufficiency”

In recent years, various organizations have developed frameworks, tools, and data to support corporate water stewardship efforts,⁷ and many provide companies with information on basin context. One element that arises across these initiatives is the notion of sustainable basin thresholds – which has been referred to in past work as “sufficiency”⁸– within which all community and environmental needs are met without compromising the long-term viability of water resources. By understanding these basin limits, shared goals for protecting them can be developed.

In some places, it is in companies’ best interests not only to identify and understand these thresholds, but also to work with stakeholders to develop common goals to protect and maintain them. El Bajio, Mexico, for example, is a key agriculture hub with a growing manufacturing and urban population where groundwater is being pumped faster than it is replenished. Scientists have estimated that at the current rate of pumping, groundwater will only be available for another 20 years. Fortunately, the sufficiency gap for groundwater was determined by the state. With a deficit of 255 million cubic meters per year, to be “sufficient,” a suite of water stewardship activities had to be implemented by all water users for several years to return to historic groundwater levels.⁹

For companies, aligning internal targets with shared basin targets where they exist – and advocating for shared basin targets where needed – can help accelerate action toward maintaining and protecting basin thresholds. In turn, such stakeholder engagement efforts can provide companies:

• A more predictable operating environment and long-term liability;
• Reduced likelihood of stakeholder conflict;
• Reduced uncertainty in regulatory change; and
• The ability to contribute to local, national and global development priorities.

Furthermore, this approach underscores the shared nature of water challenges and need for collective action, which can help distribute the cost and responsibility of action across water users in a basin.