Assess river basin and value chain circumstances to understand risk and impacts
Another aspect of the Stewardship Progression is developing a deeper and more dynamic understanding of the water context in which you operate. This involves assessing the degree of water stress in the river basins in which you operate, the effectiveness of water governance in those areas, and the broader water-related circumstances of your value chain. Ultimately, this enables you to identify the most strategic actions you can take to manage your water risks and reduce your negative impacts on people and ecosystems.
Understand water-stressed and high-risk basins
- Assess degree of water stress facing all operations
- Prioritize operations based on degree of stress
- Develop robust understanding of specific water challenges in priority operations
- Gauge water risk and opportunities due to basin conditions
- Gather information needed to develop effective collective actions
The water-related impacts you create and risks you faced are inextricably linked to the river basin or watershed context in which you operate. A thousand gallons of water used in water-rich Finland will likely have much less damaging effects than the same amount used in water-scarce Namibia. Because of this, understanding which river basins in which you operate are water-stressed or otherwise more likely to create business risk is an essential aspect of stewardship.
When combined with assessments of which facilities use the most water and which are most critical to business success, such an analysis enables you to identify the most strategic, cost-effective stewardship actions. By understanding the nature of water stress in a given area, you can also understand what type of action is needed: whether you need to use water more efficiently, promote community WASH services, support better governance structures, improve water quality, or pursue some other type of action.
There are now a variety of free, online tools that help you identify which of your facilities and/or suppliers are most exposed to water stress, including:
Use these tools to conduct an initial assessment. Once this has been done, you can then conduct more in-depth analyses in high-risk river basins by conducting watershed assessments and engaging with local stakeholders with knowledge of the situation.
Assess risks and impacts in the value chain
- Conduct comprehensive water use assessment for company and its value chain
- Assess all suppliers’ exposure to water stress
- Prioritize suppliers based on severity of stress
- Gauge risks and opportunities stemming from value chain conditions
- Gather information needed to engage suppliers and consumers
Companies seeking to address water risks and impacts comprehensively also look at the value chain context in which they operate. Though you may not use much water in your own offices or operations, you can still be exposed to significant water risks if the supplies on which you rely are water-intensive and/or grown in water-stressed areas, or if your products are water-intensive or used in water-stressed areas. For many companies, the vast majority of their water use is indirect, meaning it occurs outside their own operations. This is especially true of companies with agricultural supply chains. By understanding risks and impacts in the value chain, you can determine whether significant supplier or customer engagement is needed to address water risks, and whether such action may be a greater priority than operational improvements.
You can begin to understand your value chain context by assessing the embedded water use and quality impacts of your products, from the production of raw materials, to manufacturing, to distribution, and product end use. As part of this process, you will likely need to collect water performance and context data from your suppliers. These analyses provide a more holistic picture of a product’s potential negative impacts on people and ecosystems and therefore a better idea of where in the production process action is most needed. Life Cycle Assessment and Water Footprint Assessment are popular methodologies for such assessments.