Published on:
2024/04/25
Olivia Cesio
Co-founder & Chief Operating Officer at Waterplan
Water sustainability leader with 3 years of experience in the water sector, and 10 years scaling global tech startups.
This article was written with support from the Senior Water Advisor team of Waterplan.
Establishing water targets that are appropriate for your business and the environmental context - and are realistically achievable at the same time - can seem like a daunting task. This article can help you figure out where to start if you want to establish suitable yet ambitious water targets.
Introduction to Water Targets
Defining Water Targets
The following are some examples:
CEO Water Mandate defines a target as “a specific time-bound objective that sets the desired outcome at site, corporate, basin, or other levels.”
WWF defines a target as “a statement that includes a specific, timebound, and quantifiable level of performance, in the form of a metric that represents a point of assessment, that can inform ongoing progress towards achieving a goal.”
WRI defines an enterprise water target as “an expected result that describes a company’s contributions to improving water resources management across locations where it operates, sources from, or provides goods and services.”
ICMM describes water targets as “measurable, actionable and time-bound” with a water stewardship focus, aligned with the corporate strategy and ambition, and “informed by catchment and operational context, risks and opportunities, and priority water stewardship actions.”
There are many definitions, but they are similar in essence. We can think of water targets as the objectives a company establishes to measure the progress related to water management initiatives. These targets are typically aligned with broader sustainability goals and aim to address various aspects of water stewardship, including conservation, efficiency, replenishment, and social responsibility.
Why Do Companies Establish Water Targets?
Organizations establish water targets for various reasons, for example:
Business Continuity: With water risks becoming increasingly pressing worldwide, companies establish water targets to guide and track risk mitigation efforts.
Shareholder Expectations: Investors increasingly demand transparency and accountability in corporate water management practices. In 2022, 680 investors with 130 US$ trillion in assets requested companies to disclose water management data, which includes water targets (CDP, 2023).
Business Incentives: At some companies, senior management's performance review and non-salary bonuses are tied to the company meeting its sustainability goals, including water. According to CDP, 28% of companies report that C-Suite incentives are linked to the achievement of water targets.
Regulatory Compliance: There is a growing trend in regulatory requirements related to water management across jurisdictions, such as ESRS and SEC’s Climate Disclosure Rule. Although lacking water targets won't necessarily stop a company from operating, proactively setting targets can provide benefits such as improved compliance and enhanced public perception.
Consumer Preferences: Organizations implementing water targets may experience increased consumer trust, loyalty, and market competitiveness, particularly in younger generations of consumers. A recent study by Harvard mentions that when Gen Z and Millennial customers believe a brand cares about its impact on people and the planet, they are 27% more likely to purchase it than older generations.
Types of Water Targets
Companies may take different approaches to defining water targets based on what is relevant to their business and the environmental context, and they can establish more than one target.
Water targets are commonly classified based on the extent to which they account for catchment conditions and scientific analysis:
Non-contextual water targets WWF defines these targets as “a target that is rather influenced by exercises such as benchmarking, a desire for incremental improvements, compliance or general corporate-level ambitions.” They are often aimed at improving internal efficiencies and water management practices.
Context-based water targets WWF defines this target type as “informed by the surrounding catchment (basin) context and helps to focus resources towards the right water-related challenges in the right places and are strategically relevant to both the target-setting water user and other water users in the catchment.” Unlike non-contextual targets, these targets are established considering the unique environmental, social, and economic conditions where water activities occur.
Science-based targets SBTN defines this target type as “in line with what the latest hydrological science says is necessary to meet the sustainable freshwater quantity and quality thresholds of the basin in which the city or company and its value chain operate.” This target is informed by rigorous scientific analysis and data.
Moreover, targets may be quantitative or qualitative. They can focus on operational and value chain improvements (typically called “internal”) or can address shared community and catchment challenges (typically called “external”). Targets can also be established at a global, regional, and local facility level.
IMAGE PLACEHOLDER
Common Examples of Water Targets
Let's first delve into specific examples of water targets to gain a better understanding; we will explain how these targets are connected afterwards.
Water Efficiency - Can be non-contextual, contextual, or science-based targets
Focus on reducing and/or optimizing water usage within corporate operations, which can be related to water consumption, withdrawals, and water intensity. According to CDP, 649 companies report having a water consumption target, 571 a water withdrawal target, and 223 a water intensity target.
For example, a company with an efficiency target is Ford Motor Company with a target of zero water withdrawals by 2050.
Water Replenishment or Restoration - Can be contextual or science-based targets
Focus on replenishing or restoring water resources through external projects that have a volumetric water benefit (VWB), typically in water-scarce regions. This could involve investing in reforestation or watershed restoration projects to enhance water availability in water-stressed areas.
For example, Coca-Cola aims to return a cumulative total of 2 trillion liters of water to nature and communities globally, between 2021-2030.
Water, Sanitation, and Hygiene (WASH) - Can be contextual or science-based targets
Extend beyond corporate operations to address broader societal and environmental concerns. They typically focus on improving access to clean water, sanitation facilities, and hygiene practices in the communities where the company operates. According to CDP, 321 companies report having a WASH target. For example, Danone aims to provide safe drinking water to vulnerable people and communities. There is a related multi-stakeholder initiative called “Wash 4 Work,” hosted by the CEO Water Mandate. In the first months of 2024, 95 companies have signed the WASH Pledge, which signals a company’s commitment to taking action towards providing universal access to WASH across its operations, supply chains, and the communities where they operate.
Explaining the concepts of “Net Zero” and “Net Positive” (or “Water Positive”)
”Net Zero”
Can be included within the efficiency target category, and aims to balance potable water withdrawals with water returns, ultimately resulting in a net consumption of zero freshwater. For example Colgate-Palmolive aims to achieve Net Zero Water at 100% of their manufacturing sites by 2030.
“Net Positive”
Goes beyond “Net Zero” and aims to surpass water consumption neutrality by actively replenishing more water resources than what an organization consumes. For example, a company with this type of target is AWS, with a goal to be water-positive by 2030. There is a related initiative called the Net Positive Water Impact (NPWI) concept, launched by the CEO Water Mandate. This is an aspiration that not only informs how a company manages water within its own operations, but also how it interacts with a basin, its ecosystems, and its communities more broadly. Delivering NPWI contributes to reducing water stress in its three dimensions: availability (quantity), quality, and accessibility. The concept has been adopted by the UN Global Compact SDG 6 Ambition. Many companies have started to apply it including AB InBev, GSK, DuPont, and others.
How Are These Targets Connected?
It’s important to note that these targets can be interconnected, and organizations often establish more than one of these targets.
Achieving water efficiency is a foundational step towards becoming water positive (or net water positive). Also, investing in water replenishment/restoration and/or WASH initiatives is an important part of becoming water-positive.
At the same time, a company can establish certain types of targets at the corporate level, and different targets at the local level. For example, a company can start by having an overall water efficiency goal at the corporate level, but establish a water replenishment target for one location with high water stress.
Integrating these targets into a comprehensive water management strategy helps mitigate water-related risks, enhance environmental stewardship, and support long-term business sustainability.
How Do Key Sustainability Reports and Standards Address Targets?
Reports and standards address water targets differently, for example:
CDP asks about different types of targets, including water intensity reduction, supplier engagement, water consumption, water withdrawals, pollution-related targets, and WASH.
ESRS requires companies for which water is material to disclose the water and marine resources-related targets they have adopted, and whether these targets are mandatory or voluntary. These companies also must explain whether and how the targets relate to:
Managing material impacts, risks, and opportunities related to water risk, including water quality improvement.
Responsible management of marine resources, including the nature and quantity of resources used.
Reducing water consumption, especially in high water-stress areas.
SEC’s Climate Disclosure Rule is less specific, and requires companies to disclose the targets and goals associated with managing water risks that are material for them.
Where to Start
Approaches for Establishing Water Targets
When considering approaches for establishing water targets, companies often choose between a top-down or bottom-up approach.
Top-down approach: Establish a global target first, then regional and local targets. This is the method most organizations adopt. Global targets are established in alignment with overall corporate goals, strategies, and needs, and then adapted to regional and local contexts.
Bottom-up approach: Establish local targets first, then regional and global targets. Water targets are established based on local conditions, considering factors such as water availability, quality, regulatory requirements, and facility needs. They are then aggregated to create regional and global targets. This method is more contextually relevant as it involves conducting local water risk analyses to consider specific site conditions before consolidating them at a regional and global level.
Steps for Setting Water Targets
Generally, the water target-setting journey involves the following steps:
Gather & Consolidate Local Water Data: This can be a time-consuming and complex step, where local water data availability, centralization, and water expertise are critical factors in reducing the time spent. Data to be gathered typically includes local water withdrawals, discharges, water quality, water-related risks, shared community challenges, etc.
Analyze Water Data & Prioritize High-Risk Sites: Once water data has been consolidated at a facility, region, and company level, a water risk assessment should be conducted to understand the local situation comprehensively, gain insights into each facility's specific needs and opportunities for improvement, and prioritize sites with higher risk exposure.
Establish Water Targets: Establish a water strategy and targets at the facility, regional, and corporate levels. Internal communication and education are crucial to ensure alignment and support for the strategy. Additionally, create an action plan outlining the critical initiatives required in each facility to achieve the targets. It’s essential to identify available resources and assess any gaps that need to be addressed, such as the need for local expertise or external partnerships to implement the initiatives.
Implement, Track Progress, & Adapt as Needed: Execute the action plan and establish mechanisms for tracking progress over time. Continuously monitor water initiatives' short-term progress and results, recognizing that initial progress may be gradual and challenges may arise. Be prepared to adapt strategies and tactics in response to changing circumstances, emerging opportunities, or unexpected obstacles. Remain patient and resilient, understanding that achieving water targets is a journey that requires persistence and flexibility.
Disclose: Regularly report on the progress toward water targets, providing updates on activities, milestones achieved, and challenges encountered. Some organizations may also publicly disclose their targets as well as the actions being taken; in this case, an external audit may be needed or preferred to validate the information before it’s publicly shared.
How Can Water Targets Be Achieved?
The following are some considerations for achieving water targets effectively:
Establish long- and short-term targets and plans: Break down long-term goals into yearly targets for easier action planning and progress tracking. Review and adjust plans based on progress towards short-term objectives.
Recognize this is a long-term initiative: Educate your organization, especially leadership, that water management initiatives, such as replenishment projects and efficiency improvements, require time to yield results.
Secure sustainable funding: Develop a sustainable funding strategy over the long term. Explore options such as budget allocations, investment in cost-saving measures, and seeking external funding or grants to support the implementation of projects.
Ensure accountability: Assign clear accountability at corporate, regional, and facility levels. Establish roles and responsibilities for monitoring progress, implementing initiatives, and driving continuous improvement.
Forge partnerships: Collaborate with internal and external stakeholders, including industry partners, local communities, NGOs, and government agencies, to leverage expertise, resources, and support for water management initiatives.
Challenges & Opportunities
Frequent Challenges
Understanding Local Water Conditions: Setting achievable water targets for each facility requires a deep understanding of local water risk conditions and specific water expertise. This involves evaluating factors like water availability, water quality, socio-economic factors, community needs, facility-specific requirements, etc. which vary significantly across locations. Often, organizations don’t have the expertise or resources required to do this assessment internally.
Water Project Selection: Identifying and prioritizing suitable water projects and collaboration partners pose challenges, particularly when the potential benefits of the project are uncertain. Choosing wisely requires thorough assessments of local water stress levels, project feasibility, environmental impacts, and stakeholder involvement to ensure optimal resource utilization.
Securing Funding: Water projects require long-term funding commitment. Water may be deprioritized in internal budget allocation compared to other sustainability initiatives like decarbonization. It’s important to ensure the water strategy is integrated into the overall business strategy, consider different funding methods, and showcase tangible return of investment (ROI) potentials.
Impact Measurement: Reliably estimating and measuring the impact of water initiatives requires robust monitoring and evaluation mechanisms as well as water expertise. This is more challenging in the case of replenishment and restoration projects, where volumetric water benefit (VWB) accounting is needed.
The Opportunity of Technology
Technology can address these challenges by:
Facilitating local water risk data collection and analysis: Technology can gather and consolidate multiple water data sources, including external water risk data and internal company data such as water consumption, discharges, etc. Additionally, advanced technology can help analyze this data, suggest what sites and water risks to prioritize, and identify targets and potential responses.
Gathering and centralizing information about potential local water initiatives: Technology streamlines the process of collecting, centralizing, and analyzing information about various local water initiatives, including conservation projects, efficiency improvements, and community engagement programs. Moreover, you can simulate how different water initiatives can help you address your water targets.
Calculating the ROI of water initiatives to secure funding: Technology can estimate the potential impact of water projects based on the project type, location, specific conditions of the basin, scale, duration, etc. Through data-driven modeling, simulation tools, and predictive analytics, companies can forecast water savings, environmental benefits, cost reductions, and social impacts associated with each initiative. This information is critical for building a compelling business case to secure funding.
Reliably measuring the progress towards your targets: Calculating the impact of water initiatives and the progress you are making in achieving your targets, often involves complex methodologies and inputs that vary from one location to another such as precipitation, topography, land cover, soil type, and more. Without the appropriate tools and expertise, this calculation can be difficult. Technology can provide reliable, peer-reviewed, high-resolution data sources combined with machine-learning models to characterize the parameters and calculate the benefit of each project according to industry-standard methodologies.
Conclusion
Establishing water targets is an effort that leverages internal data, external water risk data, benchmarks, stakeholder input, and expertise. Technology can simplify this process by efficiently gathering, consolidating, and assessing this diverse range of data. This can ultimately save you time, provide valuable insights, and inform decision-making. Moreover, you can collaborate with water experts and engage with colleagues who can provide additional expertise and support. By leveraging technology alongside expert knowledge, you can make informed decisions about establishing the right water targets for your organization.
