Operational Water Consumption

Water is a valuable resource for both humans and ecological systems.

Groundwater is extracted where surface water, including streams, reservoirs, lakes, and other water bodies are scarce or inaccessible. Indeed, groundwater can help meet hydrological needs; for example, in the US, groundwater meets half of the country’s total population water drinking needs, but at a cost. In the long term, its levels have been declining from continuous pumping, resulting in depletion.

Lowering of the water table is not the sole impact. Sustained groundwater extraction also leads to decreased water quality, causing contamination by salt water.

Water stress can be defined as “the ratio of freshwater withdrawn to total renewable freshwater resources”. In 2017, Central and Southern Asia and Northern Africa suffered from very high water stress of over 70%. In the same year, Western and Eastern Asia registered high water stress of 54% and 46%.

As of 2018, freshwater bodies covered 2.1% of the land, but they are unevenly distributed worldwide. The distribution ranges from 3.5% in developed nations, 1.4% in developing countries, 1.2% in the least developed nations, and 1% in small island developing states. These percentages are expected to decrease as climate change continues, further exacerbating water scarcity and affecting ecosystems and livelihoods.

Found more information about this issue on the United States Geological Survey website and the Groundwater Foundation website.

Water Withdrawn is defined as: “the total amount of water withdrawn from a surface water or groundwater source. Measurements of this withdrawn water help evaluate demands from domestic, industrial and agricultural users.”

Water Consumption is defined as: “the portion of the withdrawn water permanently lost from its source. This water is no longer available because it evaporated, got transpired or used by plants, or was consumed by people or livestock.”

Source
https://sdgs.un.org/goals/goal6
https://blogs.agu.org/waterund...

Depending on what is available, the analysis should provide the following:

• Total Water Withdrawn
• Total Water Consumed
• Total Water Use
• The sources of water withdrawal/consumption (Groundwater? Surface water?)
• Amount of water recycled/reused (Recycling Rate)
• The various uses/purpose of the company’s water (Cooling? Cleaning?)
• How much water is withdrawn from water-stressed areas (relative and absolute figures)
• How much water is consumed from water-stressed areas (relative and absolute figures)
• Any fully-fledged industry average (absolute water figures in X industry, etc.)

TERMINOLOGIES

Water Withdrawn can also be referred to as:

• Water Withdrawn*
• Water Intake
• Water Demand
• Water Abstraction
• Water Extraction

*Unless otherwise stated in the report of reference.

Water Withdrawal vs Water Consumption

As Water Withdrawn is the amount abstracted from the environment and Water Consumption is the amount lost due to industrial processes (not returned to the source), we can estimate that:

WATER CONSUMPTION = WATER WITHDRAWN - WATER DISCHARGED

The above formula is often used by CDP. Thus, if we have the values of Water Discharge, Water Use, and the Withdrawn amount, we can estimate* Water Consumption.

Similarly, we can estimate* the amount of Water Withdrawn if we have the values of Water Discharge and Water Consumed.

*Please make sure the analysis mentions that this is an estimate

For the industries where we have multipliers, use them to estimate the companies' water consumption. Here, the data is considered Estimated and Complete.

Water Use vs Water Consumption

Used water is water that the industry needs to operate. It can take out of the environment, it can use internal cycled water or storage. Measures of water usage indicate the level of competition and dependency on water resources.

Used water = Withdrawn water + Recycled Water + Storage water

• Withdrawn water is the water that industry takes away from the environment to their system; this water may be discharged.

• Recycled water is water that is internally used more than one time, over time this water may be discharged.

• Storage water is the water that is inside the system; usually, it is water that has been withdrawn a long time ago, but it is still water that they may use over time, specifically if there is a shortage of water; this water may be discharged over time, and the storage can be refiled every year with small amounts of withdrawal.

Consumed water is lost to the processes, so the only way to find out this value is to subtract what enters from what goes out. Water consumption estimates, on the other hand, the impact of water use on downstream water availability, and are essential to evaluating water shortages and scarcity at the watershed level, including impacts to aquatic ecosystems.

Consumed water = Withdrawal - Discharges

• Water discharge is the water that comes out of the system.

It’s important to remember: “An increase in the total volume of water discharge does not necessarily correspond to greater negative impacts, since these impacts depend on the quality of the water discharge and the sensitivity of the receiving waterbody. An organization with a high volume of water discharge, but also a high level of treatment and strict quality standards, can have positive impacts on the receiving waterbody.”

Note: Do not use water withdrawn, consumed, or used interchangeably as they are not the same in most cases

References:

1. https://www.wri.org/insights/whats-difference-between-water-use-and-water-consumption

2. https://blogs.agu.org/waterunderground/2017/06/26/difference-water-withdrawal-water-consumption-need-know/

3. https://www.globalreporting.org/standards/media/1909/gri-303-water-and-effluents-2018.pdf

UNITS

We want to have homogenous and comparable units. Therefore, we will accept values expressed in cubic meters (m³).

• Sometimes companies might report their values in tonnes, we always assume that: 1 tonne of water = 1 cubic meter (m³) of water

• Also, linked to the above, if the figures are given in tons in the report, we must check whether the company has used the metric system or not (i.e., check whether the company has used kg, km,°C, etc.):
  • YES: then tons mean tonnes, and we can report the figures directly as cubic meters
  • NO: then tons mean US tons, we will have to convert it to tonnes and then report the figures in cubic meters

ASSESSING THE TRUE WATER CONSUMPTION

In your analysis, you must look at the company’s overall water consumption. Most companies now report this information in their CSR/Sustainability annual report or public CDP Report.

Standards:

• Make sure to report the most recent year.
• Yearly water consumption should be expressed in cubic meters (m3).
• Always look for the coverage/scope of the data
• Always make sure to check the footnotes/superscripts to see if there is anything valuable there.

ASSESSING WATER STRESS

You should also assess the water-stress risk of the locations where the company has its operations. 

Regarding this, we can have different scenarios:

• We have location-specific data about manufacturing locations/plants
  
• We only have data about the countries at large

• We will always prefer number 1, as X country might be in high water stress at large, but if we know about a specific location within country X, we might find out it has medium-stress water risk.

• Ultimately, the water-stress analysis must look like this: "Company X has Y manufacturing plants in 9 locations: 3 are in high water stress, 3 are in medium water stress, and 3 are in low water stress areas."

In terms of Water-Stress analysis, we can have different scenarios:

1. We have location-specific data about manufacturing locations/plants

2. We only have data about the countries at large

• We will always prefer number 1, as X country might be in high water stress at large, but if we know about a specific location within X, we might find out it is in medium-stressed

Common mistakes:

• In the past, we used to ask for a competitor analysis by picking three close competitors and estimating their water intensity.

• We also used to accept benchmarks in terms of people, Olympic swimming pools, etc.

To assess the water stress of our companies, we are using the Water Risk Indicator (WRI) Aqueduct online interactive map. 

You can launch the online map to pinpoint your locations on the map and find out about the water stress levels. You can search by baseline water stress, drought risk, and riverine flood risk for greater granularity.

Caution: Data about the pinpointed locations on the map must be visible once the source is used in the analysis so that upon opening the source, readers will be able to verify easily.

In case the "Enter the address" function does not work, please follow the below:

1. To address country-based water stress, and only if locations are not found for X company, you can use the following source providing water stress levels at the country-based level.
2. You can insert the coordinates and decimal degrees. You will need to find the coordinates of the specific locations, then insert them into the tool to find the locations on the map.
3. You can format your own Excel file and import it on the WRI tool to find out about specific locations. This is where you will find all of the required information to format your Excel. Further, this is a concrete example of the format (here).

Caution: We encourage the use of the second and third approaches. We only accept country-based water stress assessments when location-specific data is nowhere to be found.

To find the company's withdrawal in water stress areas, you can consult:

• The annual, sustainability, and other reports of the company.
  
• The official website of the company usually has an “Our Locations” section.
  
• External sources as a last resort, making sure the data makes sense:
  • Craft.Co: https://craft.co/
  • ZoomInfo: https://www.zoominfo.com/
  • Owler: https://corp.owler.com/

Additionally, we are allowing the use of this source to help you out on water-stress assessments as the data is from the WRI (the same provider of the interactive AQUEDUCT tool and is based on the same data set). However, this will be allowed only for country-based assessments, whenever there are several locations of a company or data for the specific locations are nowhere to be found. Please do not use water-stress data for a country if location-specific information can be found.

We would not want you to check many locations for a water-stress analysis. In such cases where the company has many global operations, you can either provide the data only for main operational locations or country-wise data.

Also, if the company has disclosed the % of water withdrawn or consumed from water-stressed areas, then we only ask for a water-stress analysis because with the provided information we cannot assess whether it has operations in high, medium, and low water-risk areas or not - which are among the data points for this topic. However, when the company describes water-stress locations or water coming from these areas by mentioning % in high, medium, and low, we do accept it as such.

This is about the company's offices and not necessarily where they extract the water. We would rather have the information from withdrawal. This is why for manufacturing companies, we ask you to provide the water stress analysis based on manufacturing and R&D locations, whenever it is disclosed (most of the time these are disclosed).

For other companies (retailers, and those that only provide services) we accept it based on office locations as they consume water in those operations only. Still, we require the water stress levels and not general statements, or we would not be able to extract low, medium, and high data. What you can do to prevent erroneous data, in this case, is to simply claim in the analysis that the data extracted for the water stress levels are estimated and partial. This can be mentioned unless the company provides the total exact locations of all of its manufacturing sites.

You may mention the water efficiency/reduction initiative the company has put in place. However, this should be secondary to the company’s current impact (i.e., total water consumed, where in the world, and the percentage of recycled water). Your analysis should not be based on the company’s remediation efforts. To fully understand how to move away from remediation, you should read the dedicated article: Golden Rule 5: Go beyond remediation.

In your analysis, make sure you add value to your readers and go beyond the company’s CSR report by not merely reporting data from the company’s report, but going the extra mile of providing additional data, studies, and sources to make your analysis robust and the impact value and scale are clear.

Research - Sources:

DIRECT DATA FROM THE COMPANY:

• Annual reports

• Sustainability reports

• CSR/ESG reports

• URD (Universal Registration Document)

• ESG data tables on the Website of the company

EXTERNAL DATA FROM THIRD PARTY:

To find out if there are water-related data that is not directly disclosed by the company, always consult the CDP website. Cross-checking with CDP will clear any doubts you may have regarding the terminology and figures reported by the company.

Caution: If you use CDP, make sure the year of reference is the latest and matches the one from the report you want to verify or complement data with. This info is on the first page of every CDP report.

1. Check if the assigned analysis has more recent data (we require the latest data available)

NO: do not refresh the analysis and please report it (via the Report feature or to Sabine or Sarah)

YES: Move to step 2

2. You can update the analysis following our Standards & Terminology

3. Check the water stress analysis: Is it accurate? Is it correct? Is it following our standards?

YES: do not refresh the water stress analysis

NO: move to step 4

4. Fix the water stress analysis to its full potential following our Standards & Useful Sources

5. Check the intro: Is it up to standard? Are sources working? Is data current and relevant?

YES: do not refresh the introduction

NO: move to step 6

6. Fix the intro Useful Sources

7. Fix the Headline

8. Fix the Conclusion if needed