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

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in the value chain to prioritize where they
might focus their external engagement. For
instance, if a company determines that the
majority of their water use occurs in agricultural
production, they could work with
local growers (and suppliers) to implement
efficiency improvements. Companies could
also work with academia to further develop
technologies that support these efficiency
improvements. Similarly, companies could
work with water managers to conserve water
(e.g., through funding the repair of pipes),
which is often cheaper and saves more water
than internal efficiency improvements. If
companies determine that their water use is
hindering environmental flows or community
access to water, they could partner with
local NGOs to find effective solutions. Water
footprinting is particularly well suited to help
inform corporate engagement with water
policy and management because it was originally
designed as method for assessing WRM
(and therefore many managers and policymakers
are familiar with it). Its effectiveness
as a communication tool for non-technical
audiences also makes it particularly useful to
this end.
Life Cycle Assessment
For some time, LCA outputs have been used
to inform environmental purchase and sales
decisions. This occurs either as a support
for environmental claims or as the supporting
information for LCA-based (i.e., Type I
and Type III) ecolabels. In this context, LCA
is useful to program operators of ecolabel
programs, whether they are governmental
or private sector programs. Type I labels are
provided for products whose life cycle performance
exceeds set standards. In contrast,
Type III environmental product declarations
(EPDs) merely disclose performance in a
pre-set fashion by product category rules and
make no claim of environmental superiority.
EPD programs require LCA studies to be
performed for all products seeking the label.
EPDs are becoming a requirement under law
in some countries, such as in Northern Europe.
Almost all EPDs are aimed at the business
or institutional customer. If and when
the labels become available in a consumer
setting, they will have to be accompanied by
a substantial educational effort. Studies on
nutrition labels, for example, show that even
decades on, the consumer is confused about
the meaning of the information, and environmental
information is even more obscure
to the average consumer.
The general framework for and validation
of LCA studies is governed by the
relevant ISO* standards:
• ISO 14040 and 14044 (the life
cycle standards)
• ISO 14025 and 21930 (the EPD
standards)
In general, these standards require higher
levels of verification as the use of the
data becomes more public and more
widespread. The required/recommended
validations are:
• For internal use only, verification by a
co-worker who was not involved in the
original study.
• For external use (what is called a thirdparty
report), verification by a panel of
at least three, including LCA experts
and interested parties.
• For EPDs, there are two levels of verification:
the first for development of the
product category rules, which requires
a panel of experts and interested parties,
and the second for EPD productspecific
LCA study, which requires
only an independent individual. The
standards call out the requirements for
LCA experts, including that they be independent
(with no conflicts of interest)
and be technically competent in LCA
matters and in the specific elements of
the EPD program and the relevant standards.
The review team must also have
expertise in the products and processes
under consideration.
WBCSD Global Water Tool
Though limited in the scope of data it
addresses, the WBCSD Global Water Tool
can serve as an effective communications
tool due to the fact that it is easily
understood by non-technical audiences.
Companies are increasingly starting to
include brief summaries of the proportion
of their operations in water-stressed
and water-abundant regions in their CSR
reports and often use the WBCSD
Global Water Tool as the basis for this
* ISO is also currently developing a standard specifically for water
accounting, discussed further in Appendix B