Water Pollution

The Impaakt Team

12 min Read Time | March 21st 2023

Key Takeaways

When rating the value, consider the absolute impact described - that is, the direct impact the company had on aquatic ecosystems, rather than other conjunctures linked to them or the company.

When rating the severity of a company’s impact, take into consideration aspects such as the concentration of released pollutants, the harmfulness of pollutants, and the time it takes to clean the water affected.

Depending on the industry, water pollution is an externality caused by companies' processes (e.g., Electric Utilities, etc.) or is generated while using the company’s products/services (e.g., Marine Transportation).

How do companies' impact aquatic ecosystems through Water Pollution?

Companies can cause water pollution in a variety of ways, from the disposal of toxic chemicals, food waste products, and toxic sludge to the leakage of metals and oil spills. Furthermore, pollutants such as fertilizers and pesticides from agricultural activities, animal waste, and excess nutrients can also harm water quality. Finally, heat pollution - which is caused by a company's impact on the temperature of water bodies - should not be overlooked when assessing related impacts.

At Impaakt, we capture the related impacts through the topic of Water Pollution.

👉Note: Impact topics are a set of social and environmental impacts identified by the Impaakt Team to provide an additional layer of complex insight into measuring current impact. They range from general themes like Greenhouse Gas emissions and Job Creation to industry-specific topics such as Gentrification and Water Pollution. Check our Frameworks section for more information.

The main causes of water pollution are:

Agricultural runoff 🚱

Agricultural practices such as the use of pesticides and fertilizers can lead to water contamination. Furthermore, organic livestock waste, antibiotics, silage effluents, and processing wastes from plantation crops can also adversely affect water quality.

Industrial discharge of untreated wastewater

Despite the presence of environmental laws and regulations, many industries - particularly in emerging countries - are still illegally discharging untreated wastewater into water bodies or exceeding the established limits.

Dumping of industrial waste into landfills 🗑

Industrial effluent, which may contain toxic substances and sludge, is often disposed of in landfills. This practice can lead to leaching into waterbodies, resulting in serious damage to aquatic ecosystems.

Oil leaks and Oil Spills

Accidental oil spills and leaks are one of the main causes of water pollution, with just one liter of oil capable of contaminating up to a million liters of water. This type of contamination can have severe repercussions on aquatic ecosystems, including damage to fish habitats, disruption in food webs, and reduced biodiversity.

The main impacts of water pollution include:

Eutrophication 🧫

Excess nutrients from agricultural runoff, such as nitrogen and phosphorus, can lead to an algal bloom. This process involves an overgrowth of algae which blocks out sunlight from reaching the bottom layers, leading to the death of aquatic plants due to lack of light. Subsequently, the algae will die and be decomposed by bacteria. However, this process further depletes oxygen levels in the water which can ultimately result in the death of marine animals.

Bioaccumulation/Loss of Species/Destruction of Aquatic Ecosystems 🧪

The introduction of contaminants into aquatic ecosystems can have several detrimental effects. For example, certain substances may block the respiratory pathways of marine animals, while others contain persistent components which accumulate in their bodies and lead to reproductive impairments. This can also reduce their ability to adapt to other environmental stresses, leading to mass mortality in some cases.

Oil spills are particularly damaging for underwater habitats as the oil floats on the surface and prevent sunlight from reaching the bottom layers, causing plants to die due to lack of light. Furthermore, these spills can drain oxygen from the sea and cause harm through inhalation or ingestion by aquatic species.


Sources: 1 | 2 | 3

SDG 15 Life on Land

Frameworks

✅ SDG choice: SDG14 seeks to conserve and sustainably use the oceans, seas, and marine resources for sustainable development. Water Pollution relates to this goal.


✅ Impact Category can be:

Processes: the impact described is related to the company's business operations (Eg: Alcoholic Beverages, Electric Utilities, Biotech & Pharma, etc.).

Or

Products: the impact is generated while using the company’s products/services (Eg: Cruise Lines, Marine Transportation, Coal Operations, Waste Management, etc.).


✅ Investment Leaders Group (ILG) theme: Healthy Ecosystems.


Sources: 1 | 2


Get familiar with the 5 steps to get started as an Impaakt rater

Before building skills for a specific topic, make sure to read our Knowledge Center: Rating for Impaakt. This resource outlines the 5 steps necessary to get started as a rater and provides key information about our metrics. By going through this guide, you will ensure that you are well-informed to provide accurate ratings on any given topic.

How to rate the topic:

Value


Value is the absolute impact the topic has on the planet or society.

To assess the value you need to think about how positive or negative you consider the topic and the impact described.

The value is linked to the topic treated and not to the company’s specific impact. Thus, the value should hold some consistency across industries.

👉When deciding your rating on the value, ask yourself:

How negative do you consider impacts related to water pollution, like degradation of water quality, bioaccumulation, and loss of aquatic biodiversity?

Note: Due to the nature of this topic, it should be rated negative or strongly negative.

Severity


The severity is related to the company’s impact. It consists of three dimensions: Scale, Scope, and Irremediability.

Scale:


Scale is related to the complexity and profundity of the impact described.

When deciding the scale, answer the following questions:

  • Are the pollutants released less harmful (BOD, COD, N, P, etc.) or more harmful (Asbestos, PFAS, heavy metals)?

  • Has it impacted endemic species?

  • Has it led to very disruptive consequences (i.e., the impact caused long-term impacts that are irreversible, such as genetic modifications or altered species' reproductive capacity, or has contributed to creating "dead zones")?

👉Tip: scale is related to the extent of the impact. The scale is higher if the aquatic ecosystems have been severely impacted resulting in genetic modifications, alteration in reproduction capacity, and mass mortality.

Scope:


The scope captures the range or extent of the company’s impact and it is related to the quantitative part of the analysis. For this topic, the scope is multi-dimensional and can be addressed from different angles considering what is disclosed in the analysis.

When deciding the scope, answer the following questions:

  • What are the concentrations in which the pollutants were released?

  • How many spill incidents has it had? What is the amount of water that is polluted through these spills?

  • How many aquatic species/ecosystems have been affected?

👉Tip: scope is related to the quantitative data in the note.

Irremediability:


Irremediability evaluates the impact of the company over time.

When deciding the irremediability, answer the following questions:

  • How long will it take to clean the affected water bodies? Can these be easily cleaned or the pollutant is going to persist in the environment for several decades?

  • How long will it take for the altered ecosystem to recover?

👉Tip: irremediability is linked to the duration of the impact described. How permanent/reversible is the impact on aquatic biodiversity, for example?


Rating tips by experienced raters

Draw maximum benefits from "Water Pollution" with these helpful tips from our community:

  1. Read the analysis a few times to understand the context and industry impacts. 
  2. The introduction sets the stage. It might be tempting to skip right to the body of the analysis (especially if you’ve read a lot of notes on the same topic successively), but the introduction always paints a clearer picture of the case.
  3. Identify the data metrics, both quantitative and qualitative, presented in the analysis.
  4. Don’t get emotional. Try to be as objective as you can and be aware of the ‘optical illusion effect’.
  5. If the information included in the note is insufficient, make sure to further research the topic.
  6. Develop a rating framework - a model which makes it easier to rate the topics and leaves less room for mistakes

Examples of what to consider when rating the value:

  • Value is negative, if:
    • the concentrations of pollutants are slightly above the recommended limit

    • the pollutants are less harmful and discharged in smaller amounts

    • there have been no mass deaths of aquatic species

  • Value is strongly negative, if:
    • they caused long-term impacts that are irreversible

    • the concentrations of pollutants are way above the recommended limit

    • the company has contributed to creating a ‘dead zone’

    • the company has been consistently engaged in such events

    • mass deaths of aquatic species

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