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

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IX. Water Accounting and Other
Sustainability Accounting Methods
Water use and pollution is by no means the
only aspect of sustainability that poses risks
for companies and must be measured and assessed.
Companies must also understand the
contribution of their greenhouse gas (GHG)
emissions to climate change; the impacts of
their energy use on business costs, the environment,
and human health; and a number
of other resource uses and emissions. As
such, several accounting methodologies akin
to those analyzed in this report have been
developed for other sustainability issues,
such as GHG emissions or natural resource
depletion.
The interactions and linkages between
many of these sustainability issues are becoming
more and more clear, particularly among
water, carbon, and energy. Climate change—
heightened by corporate GHG emissions—
drastically changes the hydrologic cycle,
leading to more frequent and severe drought
and flood events and contributing to water
scarcity. Transporting or pumping water for
irrigation or desalinating it for other uses is
often incredibly energy intensive. Likewise,
creating energy often (as in the case with
hydroelectric dams) severely damages aquatic
systems, displaces communities, and creates
human health concerns. These inextricable
links between these three sustainability issues
have become known as the “Water-Energy-
Carbon Nexus”. Companies are now increasingly
concerned with understanding the ways
in which these resource uses and emissions
interact with and affect one another and how
these linkages might inform a company’ assessment
of impacts and risks.
This section will provide a synopsis of
accounting methods for other sustainability
issues as a basis from which to explore how
public perception and understanding of those
methods might confuse water accounting, as
well as how different sustainability accounting
methods interact with one another and
are compatible. It will focus on carbon accounting
and ecological footprinting, as they
are perhaps the most established and widely
recognized of these methods.
Carbon Accounting
Carbon accounting (commonly referred to
as “carbon footprinting”) measures the total
amount of GHG emissions caused directly
and indirectly by an individual, organization,
event, or product. This measurement is
divided by the various types of GHG emissions
(e.g., carbon dioxide, methane, ozone,
nitrous oxide) and can be assessed for any
type of carbon emitting entity (e.g., individual,
city, nation, product, company, etc.).
A carbon footprint of a company or product
ideally includes emissions from all stages
in the value chain. A specific methodology
for corporate carbon footprinting has been
developed in the WRI-WBCSD GHG Protocol
(and subsequently adopted as the basis for an
ISO standard). Several methodologies exist for
product carbon footprinting.
Three different scopes have been described
for carbon footprinting. Scope 1 is the direct
GHG emissions of an organization. Scope 2 is
Scope 1 plus upstream GHG emissions associated
with the production of energy used by
the organization. Scope 3 is Scope 2 plus the
life cycle GHG emissions of all the products
purchased by an organization. The Scope
3 carbon footprints are simply the climate
change results of all LCAs.
Carbon accounting is fundamentally an
assessment of impacts, rather than a strict
measurement. After measuring the amount
of emissions for each type in real masses,
each mass is multiplied by a characterization
factor that “weights” that mass based on the
type of gas emitted, using factors developed
by the Intergovernmental Panel on Climate
Change (IPCC). The characterization factors
are based on the relative global warming potential—their
contribution to climate change
per unit—of each greenhouse gas. Once this
weighting occurs, all the masses are expressed
in terms of carbon dioxide equivalents which
allows for comparison and aggregation of
different types of emissions across different
products, facilities, and companies. Companies
use this to assess the impacts of different
types of emissions and evaluate the extent to
which their entire business, their products, or
their facilities contribute to climate change in
order to prioritize areas for improvement and