Introduction

This discussion paper documents the initial thinking of CDP, UN Global Compact CEO Water Mandate, The Nature Conservancy (TNC), World Resources Institute (WRI), and WWF regarding:

• What constitutes a credible and meaningful context-based water target (CBWT);
• The value for companies of setting CBWTs, informed by the best available science, social equity principles, and legitimate local and global public policy objectives, e.g., UN Sustainable Development Goal 6 (SDG6);
• Current practices in corporate water target setting;
• The potential challenges of and opportunities for companies in setting these targets; and
• Next steps in establishing a common approach to guide companies in identifying context-based metrics and setting CBWTs.

The content within reflects input collected during the CEO Water Mandate’s 16th MultiStakeholder Working Conference¹ at Stockholm World Water Week in September 2016, and other engagements with companies and non-governmental organizations (NGOs) interested in this topic. Although the topic has relevance to all sectors, this discussion paper is primarily intended for companies. This paper makes the case for the need to develop guidance that assists companies in employing context-based water metrics and setting meaningful water targets that:

• Support companies’ water risk mitigation efforts;
• Are informed by and aligned with basin conditions; and
• Advance water sustainability to the benefit of all users in the basin.

The resulting approach could potentially employ the targets underpinning SDG6 as a foundational framework because of its widespread adoption across countries and prioritization of the most critical threats to water security.

 

Background

Water is becoming increasingly more important to any company’s bottom line.² In response, a growing number have been expanding their efforts to understand and mitigate water risks, and to realize opportunities via improved water management and corporate stewardship.³

However, the risks faced by individual water users are for the most part created by shared water challenges in the basins in which they operate. Furthermore, various studies are recognizing that earth’s planetary boundaries need to be reflected in company and policy aims.⁴ Because of this, companies are increasingly engaging with governments and other local stakeholders within their respective basins to address these shared challenges. Despite these efforts, evidence suggests that water-related impacts on communities, ecosystems, and the economy are on the rise.^5,6

With a few exceptions among leading companies, corporate water stewardship activities to date have been largely focused on operational water use efficiency and pollution reduction. In many cases, there is limited accounting for the surrounding basin context (e.g., how much water is available or the basin’s capacity to absorb pollution). As a result, water stewardship activities typically do not fully account for basins’ specific needs or address the root causes of water challenges.

Further, when companies do consider basin context, they often do not account for how their water relates to the collective needs of other companies, communities, and nature. The engagements informing this paper indicated that alignment of targets amongst different stakeholders is critical for positive outcomes. As such, there is a growing need for a more consistent approach to selecting performance metrics and targets that allows companies to (1) more fully consider critical contextual factors, and (2) better align their efforts with others, including the public sector and other basin stakeholders when feasible and appropriate.