Corporate Water Accounting: An Analysis of Methods and Tools for ...

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counting methodologies and tools being used
in the private sector. Specifically, this report
is intended to:
• Elucidate commonalities and differences
among emerging methods and practice;
• Identify gaps and challenges;
• Suggest where accounting methods might
benefit from harmonization and increased
field testing.
Though this analysis will cover a number
of water accounting methods and tools of
relevance to businesses, it will emphasize
perhaps the two most significant methods:
1) water footprinting (as managed by the
Water Footprint Network) and 2) emerging
water-related practice in the field of Life Cycle
Assessment.
The authors note that the term “water
footprinting” in and of itself is the source of
confusion in this fast-evolving field and that
it is currently being used to mean different
things in various settings and arenas. The
term “water footprint” was coined almost a
decade ago by Professor A.Y Hoekstra of the
University of Twente and refers to a specific
methodology for water-use measurement.
Since that time a community of practice has
emerged that has built on Hoekstra’s methodology.
In the last couple of years the term
has increasingly been used metaphorically by
laypeople broadly referring to the concept of
water accounting. There is seldom a formal
definition associated with this lay usage of
the term, and indeed, it is likely the concept
is understood differently depending on the
circumstance and individual user. Because of
the lack of a formal definition, the authors
have given little weight to this vague use
of the term in common vernacular. In that
same time span, the term has also entered the
lexicon of Life Cycle Assessment (LCA) practitioners
who have had a newfound interest in
water. In this LCA context, the term is often
used similarly to the term “carbon footprinting,”
insofar as it includes the characterization
of water-use volumes according to local
or regional context.
Nonetheless, for sake of clarity, unless otherwise
specified, the term “water footprint”
will be used in this report only in reference to
the formal methodology developed by Hoekstra
and currently managed by the Water
Footprint Network (see page 11), as this is the
longest-standing use of the term. That said,
the way in which this term is used and understood
by water accounting practitioners,
water resource managers, and the general
public in the future is still to be determined.
The authors have no judgment on the most
appropriate use of this term, but note the
urgent need for experts and practitioners in
both the LCA and WFN communities to come
together to derive a shared understanding of
this concept.
In addition to water footprinting and LCA,
this analysis examines in lesser detail the
WBCSD Global Water Tool and GEMI’s on-line
water sustainability tools. It also provides a
cursory comparison of the ecological and carbon
footprinting methods, particularly as they
relate to corporate water accounting. Metrics
such as those in the Global Reporting Initiative’s
G3 Guidelines and Carbon Disclosure
Project’s Water Disclosure Information Request
may be an important starting point for
communicating corporate water accounting
results to external audiences. However, as they
do not provide methodologies or tools through
which to measure or assess water use (but
rather a framework and indicators through
which to report those types of measurements),
they are not included among the accounting
methodologies assessed in this report.
This study does not offer specific recommendations
for the advancement of each
method, but rather provides general comparisons
that will help stakeholders to identify
the best prospective applications for each
method and support the developers of these
methods to work in a more coordinated and
integrated fashion.
Research methodology
The project’s research methodology included:
a review of current literature; interviews with
numerous academics, industry representatives
and practitioners; attendance at relevant
water accounting gatherings; and conversations
with various organizations working
in the field. It emphasized an iterative and
inclusive data collection and analytical process,
whereby key stakeholders were engaged
throughout the project to help develop
the project work plan, the methodological
approach, and report drafting. This engagement
was done primarily through a Research
Advisory Committee (RAC) which included
stakeholders from the private sector (including
numerous CEO Water Mandate endorsers);
civil society organizations; academia;