ethical corp report summary water footprinting

1. The must-have guide to water ethics, footprinting, programmes and supply security How water risks factor into your operations, and what you should do to manage water use ethically Executive Summary The full report is available at www.ethicalcorp.com/water Ethical CorporationNOVEMBER 2008

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THE MUST-HAVE GUIDE TO WATER ETHICS, FOOTPRINTING, PROGRAMMES AND SUPPLY SECURITY Contents Foreword ............................................................................................................................................................3 Executive summary ............................................................................................................................................4 Introduction ........................................................................................................................................................6 Section 1: Water risks and opportunities ............................................................................................................7 1.1 Calculating your water risk factor ................................................................................................................7 1.2 Understanding your opportunities through water stewardship ....................................................................9 1.3 The big water issues: what every executive should know ..........................................................................101.3.1 Water insecurity ..................................................................................................................................101.3.2 Water costs and efficiency ..................................................................................................................121.3.3 Community partnerships and access to clean water ..........................................................................141.3.4 Water footprinting ..............................................................................................................................151.3.5 Water handprinting and neutrality ......................................................................................................171.3.6 Labelling, reporting and auditing ......................................................................................................19 Section 2: Strategies and solutions ................................................................................................................22 2.1 Company strategies ....................................................................................................................................22 2.2 Tools and techniques ..................................................................................................................................23 Section 3: Corporate case studies ....................................................................................................................25 3.1 Introduction to corporate case studies........................................................................................................25 3.2 Rio Tinto developing a global water strategy ........................................................................................25 3.3 Intel successful water efficiency measures, at the Ocotillo Campus, Arizona, US..........................................27 3.4 Coca-Cola stakeholder engagement in communities ..............................................................................30 3.5 SABMiller leadership in water footprinting ..............................................................................................33 3.6 Molson Coors water stewardship ............................................................................................................35 Summary of corporate initiatives, trends and recommended action ................................................................38 Appendices ........................................................................................................................................................39 A: UN water map ..............................................................................................................................................39 B: Methodology and company questionnaire....................................................................................................40 C: Corporate water resources ............................................................................................................................42 References ........................................................................................................................................................43 3. THE MUST-HAVE GUIDE TO WATER ETHICS, FOOTPRINTING, PROGRAMMES AND SUPPLY SECURITY Forewordhy are businesses now concerned with water? The Finally, water scarcity oen reects variable and Wreasons are boundless. Climate change and polit- ical factors create a massive amount of unpredictability unpredictable access at a local level, while carbon emissions remain a global challenge. though these risks are becoming better understoodNor is water the new gold. Leading corporations and leading companies are successfully realisinghave indicated that water is oen under priced. Many cost savings through increased water eciency.companies now voice the need for governments andThe message amongst the multinational corpora- water providers to price water so that it reects its tions that have engaged with Ethical Corporation is true value. clear: despite much of the dialogue around water,Therefore, we advise that companies use this re- water is not the new carbon.port to adopt water management strategies that com-Firstly, the nature of water risks diers om car- plement existing environmental and social initiatives. bon emission risks.This report shares some innovative strategies,Secondly, the regulatory environments for waterpromising monitoring tools, guidance on successful and carbon dier substantially. partnerships, considerations when calculating risks,Thirdly, although both carbon emissions and irre-and a discussion on early initiatives on labelling, sponsible water management can have macro envi- reporting and auditing. ronmental impacts, water management requires a Ethical Corporation is grateful to the corporate, local approach that acknowledges contextual issues at NGO, academic and multilateral organisations that have each operational location.contributed to this report through their thought lead-Fourthly, unlike carbon emissions, there isership and water management experience. currently little global consensus on corporate water use measures. Ethical Corporation Acknowledgements This research was lead by Dermot Hikisch, environmental expert. Ethical Corporation is also grateful to the following contributors: Andy Wales, SABMiller, Director, Corporate Social Responsibility; David Grant, SABMiller, Sustainable Development Project Manager; Kristina Ringwood, Rio Tinto, Principal Advisor, Environment; Bart Alexander, Molson Coors, VP Global Alcohol Policy and Corporate Responsibility; Michael Glade, Molson Coors, Director, Water Resources and Real Estate; Tom Cooper, Intel, Environment Manager; Lisa Manley, Coca-Cola, Director of Environmental Communications; Gregory Luxford, Norwich Union, Energy and Water Division; Thomas Bergmark, IKEA, Head of Environ- ment Department; Francis Binney, Royal Bank of Canada, Environmental Officer; Dirk Weytjens, Johnson & Johnson, Senior Director Environment, Health and Safety, Belgium; Scott Meakin, Petro-Canada, Environment Manager; Elisabeth Wenner, Kraft, Director of Sustainability Strategy; Brian Smyth, Dublin City Authority, Deputy City Engineer, Water Services; Brian Keown, Dublin City Authority, Divisional Engineer, Water Services; Katherine Neebe, WWF-US; Tensie Williams, Rainforest Alliance, Executive Director; Micah Silvey, US Green Building Council/ LEED, Manager; Brad Ewing, Global Footprint Network, Water Expert; Prof A Y Hoekstra, University of Twente/Water Footprint Network; Piet Klop, World Resources Institute, Senior Fellow; and Prof Petra Doll, University of Frankfurt, Hydrology, IPCC4 Co-Author 4. THE MUST-HAVE GUIDE TO WATER ETHICS, FOOTPRINTING, PROGRAMMES AND SUPPLY SECURITY Executive summary his research by Ethical Corporation aims to un-task to accomplish and the support of senior man- T cover eective water management and stewardship strategies. Water insecurity is a growing concernagement in the communication and delivery of aglobal water strategy is considered the only way to for global populations and has already had direct im-achieve company-wide implementation. pacts on business operations around the world. A water strategy that sets targets for real reductionsEleven leading companies with a history of waterin supply chain and internal water use will generate stewardship and success in responding to corporate cost savings and create indirect benets for numerous water challenges were interviewed to provide insightsstakeholders. Such a strategy can even bring about into their own water strategies, implementation tech-spin-o benets for the environment and the com- niques and expectations for the future. These compa- pany, such as reducing greenhouse gas emissions. nies included Johnson & Johnson, IKEA, Many companies have experienced low payback pe- Petro-Canada, Royal Bank of Canada, Norwich Union, riods on individual water projects. Some payback pe- and several multinational beverage companies. Theriods were as low as nine weeks. Overall, an accurate report also interviewed internationally recognised cost-benet analysis on water stewardship initiatives thought leaders on water issues, including the cre-is still hard to accomplish given the complexity of the ator of the water footprint and an IPCC4 author, topic and the range of variables involved. As better measurement experts such as LEED and the Globalpricing systems are developed for social and environ- Footprint Network, global non-prot organisationsmental considerations, this valuation technique will the World Wildlife Fund and Rainforest Alliance, and become more relevant. municipal water experts. Several organisations have appeared in recent yearsSeveral areas of consideration for water were dis-to support companies transitioning to a more re- covered and ve case studies were conducted with sponsible water management position. The World model companies. These included: a review of Rio Business Council for Sustainable Development, World Tintos global water strategy and implementation,Wildlife Fund, and the Water Footprint Network are Coca-Colas community partnership programmes,all highly regarded for their expertise in negotiating Intels facility water eciency measures, Molson the needs of water and business. These organisations Coors long history in water stewardship, and SAB- provide support in developing and implementing Millers new approach to water measurements with water strategies and tools to better manage and meas- the water footprint. ure water in business operations.Water scarcity and overall water quality is becom-Companies acting proactively on water manage- ing a larger issue for business as the global popula-ment have the opportunity to gain a rst-mover ad- tion grows, demographics change, and the eects of vantage on the competition. While water issues have climate change become ever more present. Water in- been a primary concern for many leading corpora- security is a risk to business; it can cause rising ma-tions, there currently exists a huge lack of awareness terial costs, disruptions to supply, increased of the risk of water insecurity in the business world. competition, and conicts with local Governments Water costs are expected to rise in almost every region and communities. of the world and growing demands om many dif-Businesses that want to come out on top in theferent stakeholders will render water volumes avail- long run need to take water insecurity seriously byable to business smaller and harder to obtain. Smart becoming proactive in their business strategy andmanagers can seize this market opportunity to be- daily operations to ensure long-term success and come leaner companies and be best prepared to deal protability. An overarching, global corporate water with changing Government regulations and consumer strategy was identied as key to successfully dealinginterests. A strong water management plan is neces- with company water issues. This strategy must be suf-sary for all companies and those that take a holistic ciently exible to meet local water needs for eachand strategic approach will earn the highest long- business unit and every level of sta must participate term prots. in its execution. Sta engagement can be a dicult 5. THE MUST-HAVE GUIDE TO WATER ETHICS, FOOTPRINTING, PROGRAMMES AND SUPPLY SECURITY Introduction usiness is impossible without water. It is essentialrisks and challenges to a consistent water supply. B to almost every product and service our society relies on. It is because of the global abundance of Even for businesses with minimal need for water, a safe and continuous supply of it is as important to water that our economies have heretofore been ablesta productivity as the electricity that powers the of- to operate without much need to deeply consider sup-ce lights and computers. For the heavy water-using ply or the ethics of water management.industries, such as manufacturing and any sector thatThe industrial era was a time of innovation andrelies on agriculture, water scarcity can halt a busi- creativity like none the world had ever seen. Simul-ness, thereby eliminating its prot. taneously it brought forth pollution that shocked As the global population and commerce continue global environmental systems and so the rst sus- to grow side-by-side, all stakeholder groups will in- tainable water management advocates were born. Lit- creasingly be looking to ensure fair access to quality tle by little, business has responded to this pressureeshwater supplies and Governments will begin to and has begun to make more thoughtful choices.choose sides. As a whole, businesss current under- Nowadays, businesses are making sure that they setstanding of water issues, their potential risks, and the up in areas with ample supplies of water, that are eas- market opportunities are only just starting to emerge. ily accessible, non-controversial and of good quality.By joining some leading companies in addressing theYet there is a new consideration. Global climate challenges of water insecurity, businesses have an op- change will bring extreme and unpredictable weather,portunity to strategically minimise their long-term along with new risks to business. There will be a water water risk exposure, realise direct operational cost- imbalance: too much water in one place and not enough savings, gain a competitive advantage on the compe- in another. Businesses in the near future will need to be tition, and improve their brand image through prepared to deal with the impacts om increased oodconstructive community partnerships. 6. Ethical Corporation report centre Recent publications cover topics such as anti-corruption, voluntary initiatives in CSR, emerging market issues, and managing carbon emissions. You can also visit Ethical Corporations website and download some free research papers: www.ethicalcorp.com/reports Anti-corruption, ethics and compliance in Russia Practical information to develop local compliance strategies and overcome corruption challenges. For more information, current prices or online ordering, visit: www.ethicalcorp.com/russia Anti-corruption, ethics and compliance in China and Counter corruption in your supply chain in China Learn more about the issues critical to your operational security, ethical management and success in China. For more information, current prices or online ordering, visit: www.ethicalcorp.com/china Best practices for designing effective ethics programmes Find out which ethics and compliance training is most effective and productive. For more information, current prices or online ordering, visit: www.ethicalcorp.com/ectraining How to manage carbon reduction, and make it pay A hands-on management briefing on real-life ways big UK companies cut carbon, and their costs. Order online or obtain more information at: www.ethicalcorp.com/crc Corporate greenhouse gas emissions reporting Learn how your competitors are calculating and verifying their GHG emissions and discover which metrics and verification standards will work for you. For more information, current prices or online ordering, visit: www.ethicalcorp.com/greenhousegas Guide to industry initiatives in CSR Get the inside track from some of the worlds key industry-based initiatives. For more information, current prices or online ordering, visit: www.ethicalcorp.com/initiatives Job-specific guides for embedding CSR throughout your company Winning methods for integrating sustainability into operational departments including communications, finance and facilities. For more information, current prices or online ordering, visit: www.ethicalcorp.com/csr Essential strategies for effective emissions trading and offsetting With practical information from the leading companies, this report is everything you need to develop your companys emissions trading and offsetting strategy. Including case studies from 15 companies across industry. For more information, current prices or online ordering, visit: www.ethicalcorp.com/emissionstrading The must-have guide to water ethics, footprinting, programmes and supply security Learn how water risks factor into your operations, and what you should do to ethically manage water use. 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