Detailed Disclosure

 

Here we provide guidance on the Detailed Disclosure pillar of the Disclosure Framework. This pillar comprises the 11 information areas that should ideally be addressed in a company’s water disclosure. The framework is not intended to indicate what elements of corporate water management and disclosure are most important or the order in which companies should address them. Rather, it offers a way to categorize and understand the many types of water-related information that companies report.


The Corporate Water Disclosure Framework

Click each component of the Framework to access relevant guidance

disclosure_framework

Basic and advanced reporting

The guidance provided in this section is divided into basic and advanced practices. While basic practice provides a good starting point for companies with limited experience in water management, advanced practice represents the full range of information that companies ideally report. However, some companies, depending on their size and the importance of water to the business and stakeholders, may not deem it necessary or valuable to implement this full range of practices. Some companies, particularly SMEs or those for which water is only marginally significant, may opt to focus on reporting the information suggested for Company Water Profiles (see Section 3), and disregard basic and advanced practices altogether.

Summary of Basic and Advanced Reporting Practices

Subsection Basic Advanced
CURRENT STATE
Context
  • High-level assessment of basins across a portfolio
  • Detailed, location-specific assessment of basins where water challenges are pronounced
  • High-level assessment of basins in which key value chain actors are located
Performance
  • Total and percentage of withdrawals in water-stressed or water-scarce areas
  • Percent of facilities adhering to relevant water quality standards
  • Average water intensity in water-stressed or water-scarce areas (as appropriate)
  • Percent of facilities with fully functioning WASH services for all workers
  • Location-specific performance data:
    • Location-specific performance data:
    • High-level assessment of basins in which key value chain actors are located
  • Water performance in the value chainHigh-level assessment of basins in which key value chain actors are located
Compliance
  • Percent of facilities with a water-related regulatory compliance violation
  • Adoption of internal and/or voluntary sustainability standards
  • Water-related regulatory compliance violations in the value chain
  • located
IMPLICATIONS
Business risks
  • High-level assessment of risks at a portfolio level
  • Detailed assessment of risks based on extensive, location-specific analysis at the facility level
  • Value chain risks
Business opportunities
  • High-level assessment of opportunities
  • Detailed assessment of opportunities
  • Value chain opportunities
  • located
External Impacts
  • N/A (legal compliance used as proxy)
  • Impacts on water availability, water quality, and access to water resources and WASH services (including human-rights-related impacts)
  • Prioritizing impacts
  • located
RESPONSE
Policies, governance, and targets
  • Commitment to water stewardship and human rights to water and sanitation
  • Goals and targets
  • Policies, strategies, and governance
  • Respecting the human rights to water and sanitation
Internal Actions
  • Improvements in direct operations
  • Product innovation
  • Value chain prioritization, engagement, and improvements
  • located
External engagement
  • Participation in global initiatives
  • Consumer/public engagement and awareness building
  • Prioritizing impacts
  • located

 

Geographic/geopolitical scale of reporting

Many aspects of Detailed Disclosure call for companies to report actions, risks, impacts, etc., for specific geographic or geopolitical regions, as opposed to their global operations. For example, a company might report that it faces water risk due to ineffective water governance in a specific country, or perhaps discuss the water use efficiency of all its facilities in a specific river basin. The most appropriate and helpful scale for a region depends on a variety of factors, including the availability of data, the intended audience, and the nature of the challenge faced or action implemented. Below is a list geographic and geopolitical scales at which water-related information can be reported and a description of when each might be most appropriate and useful.

  • River basins. Companies at times report at the river basin level when a water-related challenge or action is in response to hydrological or environmental issues that face an entire river basin. The Interactive Database of the World’s River Basins offers common nomenclature and boundary delineations for the world’s river basins.
  • Subbasins. Since water-related challenges can vary widely across entire river basis, the most insightful water-related reporting aggregates data by subbasin. Such granular reporting allows audiences to understand where specifically the most accurate water-related challenges are occurring and how responses can and should vary in different parts of one river basin.
  • Aquifers. At times, water-related challenges and responses are focused around groundwater sources rather than surface water. In these instances, companies may want to report using aquifer boundaries as opposed to river basins.
  • Geopolitical.Companies can also report water-related information around national boundaries. This is particularly salient when water-related challenges are due to governance issues or political conflict. Reporting can also be done at the state, province, or municipality levem>

Company Water Profile

An overview of the company’s relationship with water resources, offering a snapshot of water performance, risks, impacts, and response strategies that nontechnical audiences can easily understand. Profiles include the following information:

  1. The company’s interactions with water
  2. The company’s water challenges and opportunities
  3. The company’s commitment and response
  4. Profile metrics that provide a summary of companywide water performance and risk
    • Total and percentage of withdrawals located in water-stressed or water-scarce areas
    • Percent of facilities with a water-related compliance violation
    • Percent of facilities adhering to relevant water-quality standards
    • Average water intensity in water-stressed areas (as appropriate)
  5. List of hot spot basins where risks and negative impacts are most likely

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Defining What to Report

A description of the process by which a company determines which water-related topics are material (and thus should be reported). The company assesses 1) the significance of water-related topics and associated business risks, opportunities, and impacts, and 2) the influence that those topics may have on stakeholders’ assessments and decisions.

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Detailed Disclosure

Detailed metrics and qualitative information related to a company’s water management, as well as to the specific water management programs and projects it implements. Detailed Disclosure is divided into sections and subsections that illustrate the types of water-related information that companies report. The three major sections of Detailed Disclosure are:

  • Current State
  • Implications
  • Response

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Current State

The status of a company’s operations and the basins in which it operates with respect to water. Reporting the Current State includes three broad categories of information:

  • Context. What water-related conditions and trends—at the global, regional, and local levels—are relevant to the company and its stakeholders?
  • Performance. How does the company use and affect water resources? In what ways has performance changed over time?
  • Compliance. Do company operations comply with applicable regulations, benchmarks, and standards?

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Implications

Interpreting a company’s current-state information to better understand the consequences to the business and its stakeholders. Reporting on Implications includes three broad categories of information:

  • Business risks. How do company and supplier water performance and basin conditions affect the business with respect to profitability, productivity, regulatory pressure, and reputation?
  • Business opportunities. How do water-related trends and challenges create opportunities for the company to expand and improve its business?
  • External impacts. Do company operations or products create negative impacts on water-related conditions, such as availability, quality, and accessibility?

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Response

The strategies and actions that a company may take to address the risks, opportunities, and impacts identified in the previous section. Response reporting discusses how the company strategies and actions address those challenges or generate positive impacts. It includes three broad categories of information:

  • Policies, governance, and targets. Has the company created systems and developed plans designed to improve its water performance and reduce water-related risks and impacts?
  • Internal action. Does the company effectively respond to and manage specific risks and impacts by making changes to its production processes, procurement practices, and product design?
  • External engagement. Does the company attempt to respond to specific risks and impacts by advancing the sustainable management of the basins in which it operates?

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Context

Water is a uniquely complicated resource for companies to manage and report because its value, availability, and quality vary significantly depending on location. Context reporting describes the assessment and reporting of the basin conditions in which a company operates (e.g., water scarcity and water stress).

Basic reporting

  • High-level assessment of basins across a portfolio

Advanced reporting

  • Detailed, location-specific assessment of basins where water challenges are pronounced
  • High-level assessment of basins in which key value chain actors are located

Connected reporting

  • Assessments of water scarcity and water stress are included within some Performance metrics
  • Understanding basin conditions is an essential aspect of assessing business risks, opportunities, and external impacts

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Performance

Understanding water performance (how much water companies use, how efficiently they use it, the quality of wastewater discharge, and so on) helps companies adopt more sustainable water management practices that minimize negative impacts (or create positive impacts), mitigate water-related business risks, and capture opportunities.

Basic reporting

  • Water withdrawals in water-stressed or water-scarce areas
  • Percent of facilities adhering to relevant water quality standards
  • Average water intensity in water-stressed or water-scarce areas (as appropriate)
  • Percent of facilities with fully functioning WASH services for all workers

Advanced reporting

  • Location-specific performance data
  • Water performance in the value chain

Connected reporting

  • Assessments of water scarcity and water stress (as described under Context) are included within some Performance metrics
  • Understanding company and value chain water-related performance informs a company’s understanding of its business risks and external impacts

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Compliance

Compliance with water-related regulations as well as with voluntary standards or industry benchmarks may be used as a proxy for understanding a company’s approach to managing water resources. For instance, companies that experience relatively few incidents of noncompliance over time are less likely to have negative impacts on communities and ecosystems and thus less exposure to reputational risk.

Basic reporting

  • Percent of facilities with a water-related regulatory compliance violation

Advanced reporting

  • Adoption of internal and/or voluntary sustainability standards
  • Water-related regulatory compliance violations in the value chain

Connected reporting

  • Understanding company and value chain compliance informs a company’s understanding of its business risks and external impacts

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Business risks

Water risk refers to the possibility of an entity experiencing a water-related challenge (e.g., water scarcity, water stress, flooding, infrastructure decay, drought). Many companies are exposed to water risks that can negatively affect business viability over the short or long term. Disclosure on water risks enables audiences to better understand what the performance and conditions described in Current State reporting actually mean for the company and its stakeholders.

Basic reporting

  • High-level assessment of risks at a portfolio level

Advanced reporting

  • Detailed assessment of risks based on extensive, location-specific analysis at the facility level
  • Value chain risks

Connected reporting

  • An assessment of business risks is based on the performance, context, and compliance data discussed under Current State
  • Response strategies should react and respond to the specific risks a company faces, among other things

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Business Opportunities

For many companies, water may present opportunities to drive positive business value. For example, customers in water-stressed areas may have more loyalty to companies that are known to have very water-efficient operations, to sell water-efficient products, or to invest in improving local water resources. A description of a company’s water-related business opportunities, especially those related to operations, brand value, and new markets, is an important component of comprehensive water disclosure.

Basic reporting

  • High-level assessment of opportunities

Advanced reporting

  • Detailed assessment of opportunities
  • Value chain opportunities

Connected reporting

  • An assessment of business opportunities is based on the performance and context data discussed under Current State
  • Response strategies ideally react and respond to specific opportunities presented to a company, among other things

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External Impacts

A company's water practices may harm people and ecosystems, causing risk to the company, undermining sustainable water management, and potentially impinging on human rights. Key environmental and socioeconomic conditions that can be impaired by industrial and agricultural water practices are manifested in the three components of water stress: 1) water availability, 2) water quality, and 3) access to water and WASH services.

Basic reporting

  • N/A (compliance used as proxy)

Advanced reporting

  • Impacts on water availability, water quality, and access to water resources and WASH services (including human-rights-related impacts)
  • Prioritizing impacts

Connected reporting

  • External impacts typically result in business risks related to a company’s reputation
  • An assessment of external impacts is based on the performance, context, and compliance data discussed under Current State
  • Response strategies should react and respond to specific external impacts caused by, contributed to, or linked to the company

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Policies, Governance, and Targets

One key element of Response reporting is a discussion of the company’s policies, governance, and goals related to water management. This enables disclosure audiences to better understand and evaluate whether companies are adequately addressing water-related challenges.

Basic reporting

  • Commitment to water stewardship and human rights to water and sanitation
  • Goals and targets

Advanced reporting

  • Policies, strategies, and governance
  • Respecting the human rights to water and sanitation

Connected reporting

  • A company’s overarching water strategy, and the policies and targets that underpin it, should address and manage the company’s water-related risks, opportunities, and impacts where possible

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Internal actions

Corporate water management programs, strategies, and goals are effective only insofar as they drive meaningful change at the facility and basin levels. One aspect of such change is action that improves the company’s operational performance and mitigates the negative impacts associated with the company’s operations and those of its suppliers.

Basic reporting

  • Improvements in direct operations

Advanced reporting

  • Product innovation
  • Value chain prioritization, engagement, and improvements

Connected reporting

  • Internal actions should advance a company’s water strategies and seek to make progress toward established targets (which themselves should address the company’s risks, opportunities, and impacts)

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External Engagement

Many water-related business risks stem from the water-related conditions outside a company’s fenceline. Because of this, companies are increasingly pursuing (and reporting) external engagement strategies geared toward improving water resource management at the local, regional, and national levels, thereby potentially mitigating water risk.

Basic reporting

  • Participation in global initiatives
  • Consumer/public engagement and awareness building

Advanced reporting

  • Policy advocacy
  • Place-based collective action (e.g., community engagement, basin restoration, data sharing)

Connected reporting

  • External engagements should advance a company’s water strategies.
  • External engagement should seek to manage the company’s risks and impacts which cannot be adequately addressed by means of internal actions

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Connections Between Sections and Subsections

One of the most important aspects of effective water disclosure relates to a company’s ability to make connections among the information areas (the sections and subsections) within the Disclosure Framework. In some instances the connections are inherent and are made automatically. In other instances, making the connections adds relevance and meaning to the information provided. For instance, response strategies should explicitly address the water-related risks, impacts, and opportunities the company has identified as material.

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Linkages Across Sustainability Issues

Though practice in this area is quite nascent, companies also endeavor to consider and report the linkages between water and other sustainability topics, such as food production, energy use, land use, and climate change. Related considerations include the extent to which water-related challenges contribute to other corporate sustainability issues and how other sustainability challenges may affect the company’s approach to water management.

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Detailed Disclosure Current State Implications Response Context Performance Business opportunities Internal actions Business Risks Policies, governance and targets Compliance External impacts External engagement Linkages across sustainability issues Connections between sections and subsections Company Water Profile Defining What to Report


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