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Making corporate water data a little less dry

Large companies depend heavily on water, and now there's an easier way to assess potential risk for disruptive water shortages and droughts.

By Joel Makower

NEW YORK (CNNMoney.com) -- World Water Week is upon us, an annual fete of all things H2O. The event, held in Stockholm, is the leading global meeting place for experts from businesses, governments, science, NGOs, academe and United Nations agencies. This year's event features the launch on Tuesday of a remarkable Global Water Tool, a free online resource to help companies calculate water consumption and efficiency across a portfolio of facilities around the world.

The tool is the product of the World Business Council on Sustainable Development, a Geneva-based organization of some 200 international companies representing 30 countries and 20 industrial sectors. Nearly all of its members have core businesses that depend heavily on water: Alcan (Charts) and Alcoa (Charts, Fortune 500) (aluminum production), ConocoPhillips (Charts, Fortune 500) and Shell (Charts) (oil production and refining), Dow (Charts, Fortune 500) and Dupont (Charts, Fortune 500) (chemicals and ag products), Rio Tinto (mining), Lafarge and Holcim (cement), Pepsico and Suez (water and beverages).

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Indeed, pretty much all large companies depend heavily on water.

One of the challenges such companies face is assessing the potential risks posed by water's uneven quality and quantity from place to place, and even from time to time in the same place. For companies, the questions are many: How many sites are in extremely water-scarce areas? Which sites are at greatest risk? How that will change in the future? How many employees live in countries that lack access to improved water and sanitation? How many suppliers are in water-scarce areas now, or will be in ten or twenty years?

Few companies can comprehensively answer such questions, leaving them at risk for disruptive water shortages and droughts. A recent study by the Pacific Institute found that while most corporate sustainability reports address freshwater use, "few offer insight into many water-related risks facing businesses. Most reports lack context, quantitative data, supply chain information and consistent methods and definitions," the institute reported. That's a risk unto itself, akin to being a timber company that isn't measuring and tracking the future of forests.

As I've noted in the past, water issues are of growing concern to business, especially with the rising tide of concern about climate change:

Unlike climate issues, where problems and their solutions have global impacts, water will be seen as a mostly local issue requiring local actions. But, if as experts predict, warmer climates and lowered water tables lead to widespread disruptions, activists and regulators will begin to connect the dots, foisting regulations or global treaties upon the business community.

It's not just the poorest economies where water is a concern. Wealthy nations, too are increasingly facing water stress for their plants, animals and humans. In Australia, for example, what's been called the worst drought in a thousand years is pitting farmers selling food for export - a major source of national income - against households, communities and industries needing water on the domestic front.

The World Water Tool aims to help companies evaluate and address water risks and impacts in their operations and supply chains in order to minimize risks. The tool is the brainchild of Jan Dell, vice president of CH2M Hill, the global engineering and construction firm, which has been doing water risk analyses for big companies for years.

Dell was frustrated at the dearth of readily accessible up-to-date data about water at the local level around the world. Each time her firm did an analysis, they had to go online, pull data from a series of databases maintained by United Nations and other organizations, and put it together in some comprehensible way. It wasn't easy or efficient, even for experienced pros.

With good reason. Gathering data about water for a far-flung operation can be more complex than analyzing something like greenhouse gas emissions, which itself can be overwhemling for many companies. With climate, you simply add up the data from each location to measure your company's footprint; a ton of carbon is the same wherever you go.

With water, your company's footprint depends in part on local water conditions. If water is scarce, even the most efficient operation may be too much. When it's plentiful, conservation measures may not make sense. So, you need to understand the local situation to make sound business decisions. For example, in areas with lots of water, it may not be cost effective to put in energy-intensive water recycling facilities.

"It occurred to me a that a tool could be created, and that it shouldn't be a commercial one," Dell recounted to me last week. With the strong backing of CH2M Hill chairman and CEO Ralph R. Peterson, Dell donated countless hours in partnership with WBCSD and its member companies to create a tool that would simplify the data gathering and analysis process - and to make it free to all users.

The resulting tool has two parts: an input sheet and an online map. The input sheet contains the company's site location and water use information. After entering your company's water use figures, the sheet automatically provides outputs, including water indicators compatible with the Global Reporting Initiative requirements and downloadable metrics charts that demonstrate the company's data combined with both the country and watershed figures.

The online mapping feature enables companies to plot their sites with external water datasets (from the U.N.'s Food and Agriculture Organization, World Health Organization, and Unicef, among others) and download those locations in a map. These datasets provide several key metrics, including renewable water resource per capita, mean annual relative water stress index and access to improved sanitation. The tool is linked to Google Earth, which provides spatial viewing of a company's site locations in relation to detailed geographic information, including surface water.

The product of all this is a comparison of your company's water uses with key external water-related data; key water GRI Indicators, inventories, risk and performance metrics and geographic mapping; an assessment of relative water risks in your company's portfolio; and the calculation of water consumption and efficiency data.

It sounds complex, but it's not. The tool is fairly intuitive to use. Says Dell: "It could have been a spaceship, but we really tried to build a bicycle that everyone could ride."

Poring over such calculations and assessments may seem, well, dry, to most of us, but they are nothing short of revolutionary for those inside companies seeking to understand how climate change and other environmental challenges create both risks and opportunities.

Of course, the goal in all of this is for companies to take action, "not just to collect data and make charts," as Dell put it. But one tends to follow the other, and that makes the World Water Tool an essential part of any big company's efforts to quench its thirst for water in a way that is sustainable - economically, environmentally and socially.

Joel Makower, a green business writer and strategist, is Executive Editor of GreenBiz.com and writes the blog, Two Steps Forward.  Top of page

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