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

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their supplies on global commodity markets
that obscure the source and production history
of those goods.
Pilot testing can help develop more robust
and systematic ways to address suppliers’
water issues, by improving efficient data collection
systems in complex supply chains and
promoting innovative ways to communicate
and incentivize this responsible practice to
suppliers. In particular, pilot testers can help
suppliers implement management systems
that help collect this data, educate suppliers
on the rationale and process for improved
water stewardship, and/or establish supplier
guidelines that require this information.
3. Improved data collection
Our report found that one of the key limiting
factors for nearly all accounting exercises is
the lack of reliable data at a sufficient level
of detail/granularity. While supplier data,
discussed above, is a large component of this,
companies are also lacking with respect to
their own production data and external watershed
data. Many companies rely on generic
databases that report regional averages rather
than their own production data. While this
can be useful in quickly identifying material
issues, it is not sufficient for a comprehensive
assessment of a company’s water use.
In addition to improving the ability of
suppliers to collect and report such data, pilot
testing can also build the capacity of their
operations managers so that they understand
corporate needs and implement appropriate
practices. This could be achieved through
management systems, corporate mandates,
and training programs. Further, pilot testing
can explore avenues through which companies
work with governments, civil society
groups, and local water managers to access
watershed-level data regarding environmental
flows, access to water, water quality, etc.
that will support their impact and risk
assessments.
4. Assessment of water quality
Previous corporate water accounting efforts
have focused on the impacts and risks
associated with water use (i.e. concerns
related to water quantity). However, water
pollution and other water quality concerns
are equally important in companies’ assessment
of impacts and risks. Pollution can lead
to increased incidence of disease; damaged
ecosystems; and the inability of people,
agriculture, and industry to use that water at
all. Future water accounting must give higher
priority to measuring corporate wastewater
discharge, assessing its impact on ecosystems
and communities, and understanding ambient
water quality in the watersheds in which
they or their supplier’s operates. Outside of
LCA which has well-developed methodologies
for assessing water quality impacts, the
methods reviewed in this analysis do not sufficiently
assess water quality. That said, many
companies likely have internal proprietary
systems that assess water discharge and local
water quality.
Pilot testing can advance this practice by
exploring LCA as a water quality assessment
tool – especially its ability to point companies
toward meaningful changes in their water
polluting practices and measure improvement
- and identifying internal systems that
companies can share with others.
5. Harmonized reporting criteria
In addition to improved understanding of
water-related impacts and business risks, the
ability to effectively report to and communicate
with key stakeholders is a key goal
for water accounting. Stakeholders’ ability
to assess this information and guide future
corporate water-related practices can be supported
through a more consistent approach
to reporting, both in terms of one company
from location to location and year to year,
but also across different companies and
industry sectors.
Pilot testing can help this convergence of
water reporting practices by identifying water
use and impacts metrics that are relatively
easy to assess for companies and meaningful
for key stakeholders, including consumers,
investors, environmental representatives, and
affected communities. This process will likely
require companies to communicate with one
another regarding effective metrics to engage
with stakeholders in order to better understand
their perspectives and needs.
6. Cooperation among companies
Acknowledging that many companies contribute
to water scarcity and pollution and
are exposed to many of the same types of
water-related risks, there is a great opportunity
for companies to share innovative practices,
policies, and technologies that can assist
in measuring and analyzing their relation to
water resources, as well as contributing to