Water is essential to business of all kinds — from resource extraction to retail. Its scarcity poses collective risks; not just to a company’s facilities, but also to the municipalities in which it operates and the communities comprising its consumer base.
“Water is the ultimate shared resource,” according to WWF’s Lindsay Bass, and collaborative solutions to its depletion are crucial. WWF is working with companies to manage their water use through its Water Risk Filter tool and its strategic alliances with the private sector. I spoke with Bass, Manager of WWF’s Corporate Water Stewardship Initiative, about the opportunities for companies to improve their water management and become “positive actors” in shared watersheds.
How does the Corporate Water Stewardship Initiative fit into WWF’s strategy for freshwater conservation? Why focus on private sector water use?
LB: This has been part of WWF’s evolution of our conservation strategy. I think it’s still a surprise to a lot of people that the WWF organization works so extensively with the private sector because a lot of people know us only for our species conservation work. But as we were moving into the ‘80s and early ‘90s, we started focusing more on community and government engagement so that we could address the drivers that were impacting species decline in the different biodiversity hotpots that we have prioritized for protection.
As we expanded that approach, we began to look at what was continuing to drive this decline, and we were gaining more influence by forming relationships with communities. As we looked across these key places, we saw that a lot of the resource usage was being driven by the private sector. That led to WWF focusing on how we transform these markets; how do we focus in on key sectors and key companies, that either have a lot of impact or influence to change the trajectory of unsustainable fresh water management in these basins? By engaging the private sector, we hope to bring about more inclusive, more holistic, and more sustainable usage of water resources.
The WWF Water Risk Filter helps companies assess their water-related hazards and identify options for mitigation. Why create a new tool?
The Water Risk Filter was born out of a gap that we saw in the tool landscape. There were a lot of really great tools that were beginning to do deep dives into particular watersheds, or assessing the management approach of how to build a water strategy. But there wasn’t really a tool that allowed companies to do global “hotspotting” so they could understand where to focus their efforts.
We work with a lot of brands; we’re best known for our partnership with Coca-Cola. And Coca-Cola works in almost every country around the world. They have 300 bottling partners and 1,000 bottling plants across the globe. So when you’re working with partners that have that reach and that magnitude, they can’t be everywhere at once. Our tool is really about helping them understand where these water issues are most acute and most pressing, and then how they can begin to be a positive actor in those places.
The Water Risk Filter is very much about helping companies understand where it is most important to address water risk, and how to be those positive change agents in those basins. It’s not really about shifting impact; it’s not about pulling up operations and moving to a basin that’s less risky. In some parts of the supply chain that may make sense, but the tool is more aimed at answering the question: how do we work together to turn these “red basins” into “green basins”?
What information do companies need to have about their water use to use the tool, and what insights does the tool produce?
That depends on the question the company is looking to answer. If they just want a sense of where their water risks are greatest — if they’re just looking at where their operations are — they need very little information. All we need are geo-coordinates of their facilities. Companies can upload those in a batch into the filter and pretty quickly see where they have clusters of facilities that are in risky basins and might be good candidates for priority.
From there, there’s several ways companies can use the filter to dive more deeply around their water challenges and how to address those risks in basins. In addition to providing this basin risk perspective, there’s also a company-site facility questionnaire. For example, if a company learned that they have ten facilities in a really high-risk basin, they can send a site-based questionnaire securely through the tool to their facility managers at those sites. The facility managers can then complete the questionnaire, which asks questions such as: How well are they aware of these risks in their basin, and how well are they managing their water there? Do they have strong water efficiency programs, practices and environmental management systems in place? Are they aware of the external landscape? The tool gives companies a very rich context if they’re interested in looking at the site level as well.
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SB '15 San DiegoWe also have a couple of other key resources built into the tool. First are the country water profiles. Generally when people do this hotspotting, they don’t have a good sense of the local context or the local situation around water governance in these countries and basins that emerge as hotspots. The country profiles provide a high-level lay of the land: What are the major water regulations, laws, and agencies in play? What is the strength of those institutions? WWF built a database of answers to these questions with a consultancy, and then had our local offices work to approve and make them a little more robust. So there’s that very rich dataset included in the tool.
Finally, as companies assess their basin risk and their company risk, the tool has a mitigation toolbox they can use to determine effective action to take. For example, if a heat map is indicating that a company’s physical risks in a particular basin are extremely high, you can go to the mitigation toolbox and look up lessons learned or case studies of people that have utilized certain approaches to address that particular risk. So we really try to make it a tool that catalyzes action. That’s the driver for us.
Does the Water Risk Filter integrate with existing water tools?
That’s a great question. Because while we have really tried to make the tool robust on its own, we understand that there are a lot of great resources that can help companies continue to move along this sustainable trajectory. So the tool also includes linkages to things like the CDP water disclosure reporting. As you fill out information in the tool, you can pre-populate your CDP Water Disclosure Report.
In addition, we link to the AWS Water Stewardship International Standards Framework that can provide companies more information about how they can assess their water stewardship performance at sites against the standard’s criteria. So it’s a nice benchmarking tool.
The last big linkage is with the CEO Water Mandate Water Action Hub. If a company has identified priority basins as hotspots, they have the ability to then port over to the Water Action Hub and understand, who else is working in those basins and what projects are they engaging in? And how might I participate or how might we collaborate to pursue something that is even more impactful?
What are some examples of companies successfully using the Water Risk Filter?
There are a lot of examples; we have a lot of testimonials on the filter site itself. Two jump to the forefront of my mind. Marks & Spencer has used the tool to evaluate some of their large agricultural supply chain. And that has resulted in their engagement in some collective action water stewardship work with the Alliance for Water Stewardship in the western cape of South Africa. Based on that initial hotspotting of water risk, we now see them leading an effort in conjunction with the AWS and WoolWorths with farmers in their supply chain to help improve the robustness of their water stewardship approach at the field level.
In addition, H&M has been working with the water risk filter and it’s using that to hotspot their water stewardship engagement. And they’re now pursuing work in China and Bangladesh to work with manufacturers and improve water stewardship efforts.
Those examples of how the tool is getting people down on the ground to engage in activities that make a positive difference in the landscape – those are fantastic.
Other members are actually looking to build off the tool. There’s been a lot of work around looking at how to improve the business case for water stewardship, and so companies like EcoLab and others are thinking about ways they can leverage the Water Risk Filter and the information within it to further create that business case around the value of freshwater commitments.
As part of the Alliance for Water Stewardship, WWF helped launch the first International Water Stewardship Standard. What is goal behind the standard, and how do companies stand to benefit from adopting it?
The standard has been a multi-stakeholder, collaborative effort over the past four years. While the discussion started years before that, the actual development of the standard really got under way in 2010. WWF sat on the board of the group that holds the AWS together. The desire was to create some globally applicable, agreed-upon sanction and standard — kind of a line in the sand – around water stewardship. It asked the question: what do institutions need to do, at a common level, across all these different types of facilities and operations, to be that positive contributing actor in these watersheds?
The four outcome areas addressed by the standard are: water scarcity to achieve a sustainable water balance, water quality, protecting important water-related areas, and ensuring good governance. The idea is that if you have companies in basins that are getting certified to this common standard, we’ll be able to create those desired outcomes in the four different areas.
Many global brands want to activate on water and are already creating water strategies. But how you translate that into actionable strategy at a site level is a real challenge. The AWS is a great tool for creating some kind of consistency to evaluate the level of a big brand’s water strategy. It provides an ability to benchmark different sites and to ensure that they’re meeting these core fundamental criteria. And in risky places, depending on the business and their values, they can decide to go above and beyond that; they can get platinum certified if they want to, or strive for those platinum-level criteria.
For WWF the strength of the standard, and the business case in pursuing it, is around providing a robust framework that resonates with business and can help lead them through this journey of creating an actionable water strategy.
What are some common obstacles you’ve witnessed in modifying companies’ water use?
Water is a great area to be in because we’re really at a point where companies understand that it is material to their business. That said, it remains a challenge to create a strong business case for water stewardship. Part of that challenge comes from the fact that water is not priced for scarcity in its value. WWF is trying to underscore the risk element and the value in that risk.
As we talk with companies, one of the challenges — it’s also an opportunity — is to get them to think beyond the short-term, so as they set these growth and performance targets out to 2020 they ask themselves: Am I going to have enough water to hit that target? That’s the kind of question that companies need to start asking. We take for granted that water is going to be there. But in many parts of the world — California is a great example — we’re beginning to see that that is not the case; there are finite limits to these basins. If you push them far enough you reach those limits, and that has significant economic consequences. So getting people to realize those consequences before you’re at that precipice – that’s the trick.
A big focus for the water stewardship community is to be able to make that business case not only for the initial investment in water stewardship — to get these big brands moving in the right direction — but then also being able to sustain that activity. We see this same kind of challenge with some of our leaders in water stewardship.
The sustainability professionals that we work with, they’re the champions inside the business; they’re our partners. We need to support and strengthen their position as much as we can. But they’re always receiving the question of: What is the return? What is this doing for the business? What you do inside a plant is might be an easy case; you can show that return on investment. It’s much more difficult to value investments in the natural infrastructure of a watershed, like working to protect a forested headwater area or reforesting a degraded headwater area and building resilience. Those are things that are much more difficult to value. It’s this value of nature and freshwater ecosystem services that are really critical to our efforts.
SB: How is WWF building the case for companies to invest in their water management?
This is an area where WWF is very active. One thing that is working for us is to put water in the economic context. In areas that are centers for biodiversity and are also centers and engines of economic activity, we’re conducting detailed analyses of how water flows through the economy. We’re making the linkages from water to economic activities such as exports and foreign markets, and to livelihoods and to tourism.
Being able to make those businesses cases in watersheds with government agencies creates the opportunity to open up dialogue, so that you have shared understanding of the importance of water and the need to achieve this sustainable balance. It opens up the conversation and gets people aligned around how to address these risk narratives and how to work together. It’s that common framework and joint understanding of the issue in a particular place — that’s one thing we find is working and helping to move the conversation forward.
Within the business framework, this value-at-risk question — WWF’s effort to help companies understand the amount of revenue or capital assets that are located in places of high physical risk or high reputational risk — is also important.
Finally, we are progressing to establish the business case for the value of nature and investing in watersheds for the services and resilience they provide. Looking at how you assess different interventions on a landscape for businesses to be able to say ‘we're going to get the biggest bang for our buck if we invest in a conservation effort in this particular area, doing this particular activity’ — I think that’s where the business community wants to get to. And that’s what the science is furiously trying to help us achieve.
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Published May 16, 2015 1pm EDT / 10am PDT / 6pm BST / 7pm CEST