Encourage collective action

Therefore, to help mitigate water risk, companies need to engage beyond their own supply chain with other stakeholders, including water users in supply chain locations, other companies that share the same sourcing areas, water management institutions, relevant parts of government and NGOs etc. Collective action should also be initiated at the relevant scale to address the specific water risks identified. The right level of collective action can be at the local, catchment or basin scale, or indeed at the state or national level. Companies should show a clear understanding of the scale at which to engage other stakeholders to address the fundamental drivers of their water risk.

Investors expect companies to:

• use water risk hotspots and identify key catchment areas where the company can have most impact;
• identify key partners, such as NGOs and companies or other buyers, and set shared goals with common indicators;
• understand current catchment efforts where suppliers are operating that address relevant water goals and how the company can contribute to them;
• support collective action in water risk hotspots by engaging with local basin stakeholders such as municipalities, governments, other companies, farmers and NGOs;
• engaging commodity traders/distributors in the supply chain to improve traceability, advance commodity standards and ensure responsible sourcing; and
• share lessons learnt.

Example engagement questions

• Have you identified the key water stakeholders in your areas of high water risk? If so, how?
• What process have you employed to understand your impact on local water stakeholders?
• What existing initiatives in your high water risk areas take a multi-stakeholder approach?
• Have you identified how your company can contribute to these existing projects/initiatives?
• How do you support collective action among water stakeholders in your high water risk supplier locations?
• Do you publish information on your engagement with others on water issues?