Regeneration & Resilience

Water Pressure:
From Mitigating Risk to Boosting Resilience

Regardless of dynamic policies and regulations, water risks are mounting — and so is the pressure on companies’ bottom lines.

Brand Provided | By Shama Perveen | Published 1 week ago | About a 6 minute read

Image: Wirestock

The sustainability landscape has grown more challenging and complex, fueled in large part by changing politics in Washington and regulations in Europe. Yet, when it comes to water risk, the business imperative remains the same.

More than a third of the US is currently experiencing drought — fueling wildfires and depleting water supplies needed for agriculture, data centers and other industries, in addition to communities and ecosystems. Meanwhile, in 2024, flooding across the South and Midwest unleashed one of the worst water disasters in three decades, with the impacts on local agriculture still being felt today.

With similar crises playing out around the world, many companies realize they can’t afford to lose momentum in addressing these risks. Hitting near-term water goals is important; but so is thinking beyond 2030 and building long-term water strategies to increase business resilience. In doing this, it's vital that commitments linked to water positivity, balance, replenishment and restoration — broad concepts quickly gaining traction — aren’t just buzzwords. They must be clearly defined and fully woven into broader water-stewardship plans, so companies can tackle the full range of water risks and impacts across their value chain.

Diverse approaches to water positivity

Companies define water-positive commitments differently, but generally the intention is to replenish equal or more water to a watershed than their local operations or suppliers consume. The Net Positive Water Impact (NPWI) guideline developed by the CEO Water Mandate is a framework companies can use to focus on using less water while improving water quality and access for communities where companies operate.

Gap Inc. is one of the companies using these guidelines to help it achieve NPWI in water-stressed regions by 2050. To advance progress, the company set 2030 goals to improve clean water access for 5 million people impacted by the apparel industry, and reduce and replenish 100 percent of water used in manufacturing and company-owned facilities.

While some companies don’t explicitly label their commitments as water positive, many pursue similar results through strategies including replenishment, restoration or water balance — approaches that aim to return a certain amount of water back to the local catchment to offset site withdrawals or consumption. Heineken has committed to balance 100 percent of the water used in its products in water-stressed areas by 2030. This involves replenishing water in the watershed that supports operations through efforts such as reforestation and wetlands restoration, leak detection and repair, and rainwater harvesting. The brewer uses the Volumetric Water Benefit Accounting method to measure the impact of its water-balancing efforts.

In addition to the amount of water being replenished, where companies replenish water also matters. Companies including PepsiCo specify water restoration must occur in the same basin from which it is withdrawn. Others, such as Microsoft, focus on where water is needed the most within the water-stressed regions globally: The company has a 2030 goal to replenish more water than it consumes across its global direct operations and replenishes water in roughly 41 priority high-water-stress basins where it operates. Microsoft recently shared that it is on track to achieve this goal.

Amplifying impact of water-positive commitments

As more companies commit to water-positive goals (or similar commitments), it's inspiring to see the growing focus on sustainable water use. However, a majority of water-positive commitments are focused on water use in high-stress basins or direct operations only. Water-intensive supply chains — particularly in high-risk, water-intensive sectors — account for most of a company’s water consumption and water-related impacts. With the changing climate and other pressures, a basin that is currently “medium stress” also needs to be considered and proactively managed to ensure resilience.

Additionally, while companies with water-positive commitments often have targets for reducing impacts on water quality and improving access to water, too often they fall short when it comes to explaining an approach to meeting the targets and showing how the outcome of these efforts are measured. To drive meaningful results, organizations must explicitly define the issue they are addressing — whether it’s water scarcity, pollution or damage to ecosystems. That means setting concrete goals — such as how much water they aim to restore and where, how they will track the results using solid science, and being clear about what action on the ground will actually move the needle in a watershed.

To maximize the impact of their water-positive strategies and ensure efforts are both credible and effective, companies should:

Understand water risks across the value chain and set context-specific goals. Companies must prioritize and set goals based on unique water challenges in each watershed — including water scarcity and pollution, ecosystem health and community access to water — in basins impacted by their direct operations and supply chains. By anchoring strategies in local watershed needs, companies can shift from mitigating risk to protecting the long-term vitality of shared water resources.
Engage suppliers. Partnering with farmers and suppliers on responsible water-management practices is critical for companies to advance their water-stewardship goals and strengthen supply chains.
Integrate water into business strategy. Embedding water into financial planning, decision-making and executive accountability is key to protecting long-term value and building resilience. To future-proof their business, companies should be able to both respond to evolving water risks and actively innovate and shape policies that address them.
Scale through collaboration. Make sure water-related commitments are consistent with the broader business strategy by shifting from isolated projects to achieve scale through collective action — integrating ecosystem restoration to achieve basin resilience and tackle shared water risks.
Prioritize transparency. Clear, detailed disclosures on water strategies and progress build trust, show accountability, and signal to investors, regulators, and stakeholders that a company is working to manage water risks while complying with environmental standards.

Regardless of dynamic policies and regulations, water risks are mounting and so is the pressure on companies’ bottom lines. Set for release this fall, Ceres’ next benchmark assessment of corporate water stewardship will highlight companies’ progress on their water commitments and how they are incorporating them into strategies that address the full range of the water risks they face, as well as the impacts they have on water and how they depend on it across their value chain.

Effective, transparent water management is not just a sustainability imperative but a critical component of long-term business resilience.