THE FLOW-ON EFFECTS OF GOOD LEADERSHIP
This year, the water crisis was in the limelight of the World Economic Forum’s global risk report when it was listed for the first time as the top societal risk facing business. This speaks volumes about how water scarcity has shifted from being a
non-existent issue to being recognised as one of the most important sustainability challenges of our time.
Over the coming decades, the water crisis will continue to worsen. It will threaten the ability of people to survive, ecosystems to flourish, food production to meet growing needs and the stability of societies as competition over scarce resources
ramps up. It will also threaten our ability to develop strong and stable economies where businesses can thrive.
THE CEO WATER MANDATE: BRINGING IN BUSINESS
In 2007, understanding of the water crisis was growing, but companies lacked clear guidance and platforms to work together. In this context, the Global Compact and the Pacific Institute took steps to mobilise the business community and established the CEO Water Mandate. This constituted a voluntary set of principles designed to improve companies’ management and disclosure of water practices and impacts.
A CEO-led initiative, the Mandate currently seeks to catalyse change in four main areas: responsible policy engagement and collective action, water and human rights, corporate water disclosure and water stewardship in the supply chain. It has responded by developing numerous practical tools and resources to help companies improve water management practices and impacts in their direct operations and in supply chains.
As of May 2015, 137 companies from a variety of sectors had
endorsed the Mandate, with a majority belonging to highly water intensive sectors such as Basic Materials, Industrials and Consumer Goods. Participants include leading industry figures who are often subject to public scrutiny, and who might benefit from a proactive and transparent approach to water management.
FROM TALK TO ACTION
Water was already on the agenda of leading businesses when the CEO Water Mandate was launched. But as one of the first global business initiatives on the topic, it has helped raise awareness and attract attention to water issues at the global
Today, there is much higher awareness in the global business community of water risks. This is particularly the case in sectors and countries where water shortages have become a material risk to operations. We have seen a clear trend towards
companies becoming more proactive in identifying, managing and reporting on water risks and opportunities. This is also true for firms outside the Mandate’s endorser base. More companies are developing programs on water stewardship, efficiency and supply chains. In addition, they are requesting more practical tools and guidance for water footprinting, reporting and accounting.
However, water management cannot yet be described as mainstream. Basic Materials, Agriculture and Beverage Industries are leading the way, but awareness and engagement in other sectors vary.
With the launch of the CEO Water Mandate, there has been a focus on developing practical guidance for companies to ensure better water management and disclosure. The Mandate has also convened numerous events where companies and other organisations have been able to discuss challenges, share experiences and find new solutions. Many respondents point out that the collaborative tone and inspiration from peers has helped catalyse action within their own company.
MEASURING THE IMPACT OF THE CEO WATER MANDATE
DNV GL has analysed data from 124 endorsing companies going back to 2007. Data was collected from publicly available annual or sustainability reports which were analysed for a variety of metrics, including water use and water saving.
60 per cent of endorsing companies report comparable data on water use. 80 per cent of companies disclosing data on their water withdrawals are from three key sectors: Basic Materials, Industrial and Consumer Goods.
HOW MUCH WATER HAS BEEN SAVED?
IS WATER SAVED IN AREAS OF HIGH WATER STRESS?
46 per cent of the CEO Water Mandate companies are headquartered in areas of high to extremely high levels of water stress. However, to measure water used in
production, especially for water intensive industries like textiles, the operating site is of most value to the analysis. 73,189 million m3 of water has been saved by CEO Water Mandate signatory companies since they joined the initiative. This is equivalent to the daily supply of 3.5 million people.
HOW ARE FRAMEWORKS RESPONDING?
Governments have come to realise that water issues cannot be addressed by national and regional policies alone, and a key change has been the increase in cooperation and collaboration on these issues. More engaged governments have begun to reform
water policies and reassess their water-related priorities.
Collaborations between international organisations and business have played an important role in helping NGOs understand business mentality and develop tools for water management.
The CEO Water Mandate cannot be said to have played a central role in shaping regulatory or institutional frameworks. However, through advocacy of water issues and facilitating dialogue, it has helped ‘raise the bar’ for performance and enabled
business to engage in policy development and implementation.
In the last two decades, attitudes relating to water have changed dramatically. Water has gone from being perceived as a ‘public commodity’ to a ‘limited resource’. Around 2008, there was a significant increase in media, public and business
recognition of the importance of water from social, economic and ecological perspectives. This was due in part to a greater understanding of the pressures and risks associated with the world’s freshwater resources.
Awareness of the links between water and other sustainability issues is also growing, and the topic of ‘water as a human right’ has emerged. This has highlighted the crucial connection between company and state policy on water issues.
The CEO Water Mandate can certainly be said to have contributed to changing attitudes in terms of the risks water can pose to business and what responsibility and role business can and should take. Our findings show a clear change in perception and the fact that 50 per cent of endorsing companies have joined since 2013 represents a clear growth in general awareness.
opportunity to be part of the UN Global Compact,
especially in the CEO Water Mandate; to learn from
others and bring our expertise into the discussion
with business and civil society groups.