Aligning Disclosure with Corporate Water Management Practices
Effective implementation of corporate water strategies relies on iterative management systems for different water-related activities, including those pertaining to internal corporate policies, governance, and operational performance as well as engagement with stakeholders outside the company fenceline.
This section describes how water disclosure is situated within and contributes to these broader management processes and how it provides business value. The section outlines the practical and administrative steps that make up a typical corporate water management cycle and then offers an overview of how the long-term maturity and evolution of a company’s water management practices relate to its water disclosure efforts.
The Business Case for Corporate Water Disclosure
Many companies have found that the disclosure process itself improves their internal understanding of water-related challenges and contributes to the development of effective response strategies. For those companies that have taken significant steps to manage their water-related risks and negative impacts, disclosure provides an opportunity to demonstrate progress and good practice to both internal and external stakeholders. This in turn helps companies strengthen their brand value and reputation, bolsters talent recruitment, and fosters increased investor confidence. Corporate water disclosure also offers a vehicle to establish a dialogue between companies and their stakeholders.
Showcasing progress and articulating future targets and commitments via disclosure (while allowing stakeholders to provide feedback on these aspects) strengthens corporate accountability and builds credibility with employees, local communities, civil society, and governments. Disclosure can also help companies hold other stakeholders accountable on water issues.
How Disclosure Fits into Corporate Water Management
A typical corporate water management cycle features a series of practical steps that a company uses to understand its relationship with water, undertake response strategies, and eventually communicate both to stakeholders. Understanding each step and the type of information generated through this process allows for more effective reporting. This section describes how a typical corporate water management cycle aligns with the Disclosure Framework presented in these Guidelines.
Though corporate water management processes vary from company to company, they can be generalized as being iterative and having the following fundamental steps. The process depicted below as an illustrative example is derived from the UN Global Compact Management Model and adapted for water-related management.
- Commit – Commit to drive sustainable water management.
- Account – Collect data on internal water performance and the condition of the basins in which the company operates.
- Assess – Use the data generated in the Account phase to identify water-related business risks and opportunities and negative impacts.
- Define – Define and refine corporate water policy, strategies, and performance targets that drive performance improvements and address risks and negative impacts.
- Implement – Implement water strategies and policies throughout the company and across the company’s value chain.
- Monitor – Monitor progress and changes in performance and basin conditions.
- Communicate – Communicate progress and strategies and engage with stakeholders for continuous improvement by means of corporate water disclosure. (This document provides a framework and guidance for conducting this step in an effective and harmonized manner.)
A Corporate Water Management Cycle and Its Relation to the Disclosure Framework
The Long-term Corporate Water Management Maturity Progression
While the management cycle offered in the previous section describes the various practical steps that companies conduct as part of their broader corporate water management processes, it does not speak to how water management practices evolve and mature over the long term.
For example, those companies just beginning to prioritize water issues often focus on water measurement and efficiency programs within their direct operations. Those with advanced water management programs might address a wider array of water-related issues such as a comprehensive corporate water strategy, value chain management, and engagement in sustainable water management activities outside the company fenceline.
Corporate water management can generally be categorized into the following types of activities:
- Provide WASH services in the workplace
- Measure and monitor water management practices
- Drive operational efficiency and reduce pollution
- Identify and understand water-stressed and high-risk basins
- Integrate water management into business strategy
- Leverage improved practices throughout the value chain
- Advance sustainable water management and engage in collective action
How Disclosure Fits with Corporate Water Management Maturity
The maturity of a company’s water management practice is directly related to the maturity and comprehensiveness of its corporate water disclosure. As the company expands its water management activities to address a wider range of risks and impacts, the scope of its disclosure practice expands as well. Thus, if a company identifies where it resides on this progression, it also gains insight into the types of information that it is able to report robustly, as well as how its water management and disclosure practice might expand over time. The figure below shows how the types of management activities described above align with and link to the various subsections of the Disclosure Framework.
Linking Corporate Water Management Maturity and the Disclosure Framework