A water risks stewardship framework

The water stewardship framework developed by WWF effectively highlights various examples of best practice water risk management by companies.

This framework consists of five steps designed to help companies better understand the water-related actions they can take, noting that the actions are not exhaustive nor necessarily contained within each step. Instead, the steps act as a fluid and iterative guide to business, which can be applied as appropriate to different businesses and areas of water risk.

Water Stewardship for business is defined by WWF as: a progression of increased improvement of water use and a reduction in the water-related impacts of internal and value chain operations. More importantly, it is a commitment to the sustainable management of shared water resources in the public interest through collective action with other businesses, governments, NGOs and communities.

WWF Water Stewardship Steps

Step	In pratice
1. Water awareness This refers to the general awareness and understanding of water issues within companies. It considers knowledge of the relevant water management context, debates and science and also refers to understanding the views of external stakeholders.	At present, the surge of interest in water has fuelled a much greater level of awareness for all sectors. While some are slower than others, agriculturally reliant businesses are leading in this field.
2. Knowledge of impact Understanding a company’s footprint is vital to developing better water risk management. Footprinting and risk analysis tools have helped companies to make estimates in the areas of impact, dependence and risk to build coherent strategies.	WWF has partnered with a major multinational beverage company on water footprinting, focusing on the context of agricultural production and allowing the company to better understand their area of concern. Deeper analysis uncovered regulatory, social and environmental issues located in key growing areas which were hidden in the company’s supply chains. Additionally, WWF’s Water Risk Filter has helped many companies gain a more detailed and robust estimation of their basin and company risk, and similarly, PwC’s ESCHER approach has allowed companies, including one major food product manufacturer, to map out their supply chains for water consumption in water stressed regions. This led to a greater understanding of where in the supply chain water consumption by the company was potentially at risk.
3. Internal action Internal action refers to engagement with employees, buyers and suppliers with the aim of establishing the potential opportunities as well as risks for the company. Internal efficiency targets are the starting point for many companies, and several have set ambitious targets in their factories and within their supply chains. For agricultural products however, efficiency is not always the answer. Risk comes as much from regulatory and planning issues as from scarcity of water. Water stewardship means moving commitments to the outside world, linking crop production beyond the field level.	One major beverage company talks of ‘reducing water risks and improving water management in risk areas’. A European clothing chain seeks to ‘work together with suppliers on collective stakeholder engagement and water management forums in prioritised river basins’, while a North American food manufacturer speaks of ‘implementing changes in high-risk watershed areas’ and ‘developing public commitments, public education and advocacy with watershed neighbours’. Such shifts in commitment pave the way for the ‘mainstreaming’ of water debates.
4. Colletive action This step refers to external engagement and working with other organisations at various scales as part of an overall water strategy. While a clear business case can be made for focusing on operational efficiency, businesses must also recognise that internal efforts alone will not fully mediate water risks. Surface water sources and aquifers are connected systems, meaning the availability and use of water in one place will have effects elsewhere. This reality forms the basis for the concept of shared water risks, which can only be effectively addressed by collective action.	Many organisations and companies are coming together through the recently formed Alliance for Water Stewardship (AWS), an organisation aimed at enhancing water stewardship capacity and encouraging responsible water use at the point of use. One early example of collective action through the alliance is a partnership between WWF, the Council for Scientific and Industrial Research (CSIR) and two major retailers, one from the UK and one from South Africa. Using the WWF Water Risk Filter the group identified a key risk area for stone-fruit production in Western Cape, South Africa, and are now working to encourage application of the AWS Standard amongst growers in the catchment area.
5. Influence governance Ultimately, the impact that water scarcity and pollution issues have on society and business come down to management and governance of resources. For business, this means supporting and influencing governance which helps reduce long-term water risks. Nevertheless, such actions need to be approached carefully and responsibly to avoid creating additional issues including reputational damage. Companies are expected to be transparent and wield their influence judiciously.	The CEO Water Mandate fs Guide to Responsible Business Engagement with Water Policy is one document available to guide companies’ actions in this area. It sets out five principles that should guide any move beyond the fence-line: Principle 1: Advance sustainable water management Principle 2: Respect public and private roles Principle 3: Strive for inclusiveness and partnerships Principle 4: Be pragmatic and consider integrated engagement Principle 5: Be accountable and transparent

Step

In pratice

1. Water awareness

This refers to the general awareness and understanding of water issues within companies. It considers knowledge of the relevant water management context, debates and science and also refers to understanding the views of external stakeholders.

At present, the surge of interest in water has fuelled a much greater level of awareness for all sectors. While some are slower than others, agriculturally reliant businesses are leading in this field.

2. Knowledge of impact

Understanding a company’s footprint is vital to developing better water risk management. Footprinting and risk analysis tools have helped companies to make estimates in the areas of impact, dependence and risk to build coherent strategies.

WWF has partnered with a major multinational beverage company on water footprinting, focusing on the context of agricultural production and allowing the company to better understand their area of concern. Deeper analysis uncovered regulatory, social and environmental issues located in key growing areas which were hidden in the company’s supply chains.

Additionally, WWF’s Water Risk Filter has helped many companies gain a more detailed and robust estimation of their basin and company risk, and similarly, PwC’s ESCHER approach has allowed companies, including one major food product manufacturer, to map out their supply chains for water consumption in water stressed regions. This led to a greater understanding of where in the supply chain water consumption by the company was potentially at risk.

3. Internal action

Internal action refers to engagement with employees, buyers and suppliers with the aim of establishing the potential opportunities as well as risks for the company. Internal efficiency targets are the starting point for many companies, and several have set ambitious targets in their factories and within their supply chains. For agricultural products however, efficiency is not always the answer. Risk comes as much from regulatory and planning issues as from scarcity of water. Water stewardship means moving commitments to the outside world, linking crop production beyond the field level.

One major beverage company talks of ‘reducing water risks and improving water management in risk areas’. A European clothing chain seeks to ‘work together with suppliers on collective stakeholder engagement and water management forums in prioritised river basins’, while a North American food manufacturer speaks of ‘implementing changes in high-risk watershed areas’ and ‘developing public commitments, public education and advocacy with watershed neighbours’. Such shifts in commitment pave the way for the ‘mainstreaming’ of water debates.

4. Colletive action

This step refers to external engagement and working with other organisations at various scales as part of an overall water strategy. While a clear business case can be made for focusing on operational efficiency, businesses must also recognise that internal efforts alone will not fully mediate water risks. Surface water sources and aquifers are connected systems, meaning the availability and use of water in one place will have effects elsewhere. This reality forms the basis for the concept of shared water risks, which can only be effectively addressed by collective action.

Many organisations and companies are coming together through the recently formed Alliance for Water Stewardship (AWS), an organisation aimed at enhancing water stewardship capacity and encouraging responsible water use at the point of use. One early example of collective action through the alliance is a partnership between WWF, the Council for Scientific and Industrial Research (CSIR) and two major retailers, one from the UK and one from South Africa. Using the WWF Water Risk Filter the group identified a key risk area for stone-fruit production in Western Cape, South Africa, and are now working to encourage application of the AWS Standard amongst growers in the catchment area.

5. Influence governance

Ultimately, the impact that water scarcity and pollution issues have on society and business come down to management and governance of resources. For business, this means supporting and influencing governance which helps reduce long-term water risks. Nevertheless, such actions need to be approached carefully and responsibly to avoid creating additional issues including reputational damage. Companies are expected to be transparent and wield their influence judiciously.

The CEO Water Mandate fs Guide to Responsible Business Engagement with Water Policy is one document available to guide companies’ actions in this area. It sets out five principles that should guide any move beyond the fence-line:

Principle 1: Advance sustainable water management
Principle 2: Respect public and private roles
Principle 3: Strive for inclusiveness and partnerships
Principle 4: Be pragmatic and consider integrated engagement
Principle 5: Be accountable and transparent

The WWF approach is one approach to effective water stewardship that companies can take. While not exhaustive nor the only option available, the five steps are recognised by the investors involved in the project as comprehensive in scope and in line with leading thinking on company water risk management. It is expected that implementation of this or similar frameworks will form part of the dialogue between investors and target companies.