Now companies face a green squeeze on using water

Tricia Holly Davis

The United Nations is to warn businesses they face significant risks from shrinking water supplies and will eventually be forced to keep formal accounts of their water consumption.
The UN report, expected within the next few weeks, is part of a switch of focus by environmentalists and regulators away from greenhouse gas emissions to water use.
The Carbon Disclosure Project, which popularised the concept of carbon footprints for companies, will produce its first water footprint report for the world’s top companies this year, while Ofwat, the UK water regulator, is increasing its scrutiny of wastage and the energy consumed in water production.
The water research has been produced by Global Compact, the UN policy group that encourages businesses to go green. “We’ve never before looked at water footprinting and how this will affect companies’ supply chains,” said Guido Sonnemann, the UN official overseeing the report. “Water scarcity will have an impact on companies’ bottom line and climate change will only exacerbate the threat.”
The report will evaluate the methods used to account for corporate water use. Sonnemann said the UN will then bring together a group of businesses to pilot the various approaches, with a view to creating a formal international standard for water accounting and reporting.
The UN will also highlight the amount of CO2, a greenhouse gas, generated in the treatment, transport and use of water.
In the UK, the water industry uses about 8,000 gigawatts of energy to supply clean water to customers, accounting for 1% of total UK emissions of CO2. Once that water reaches households and is used for showers or to fill a kettle, the emissions jump to 6%, making Britain’s water sector as carbon intensive as aviation.
Ofwat suspects the emissions are much higher when factoring in the commercial use of water and the construction of treatment plants.
Energy companies are among the most vulnerable to water shortages since they require huge volumes to run and cool their plants. The UK uses about 21 billion litres of water per year, 45% of which goes to energy production.
Unlike carbon, however, having a high water footprint isn’t necessarily a bad thing from a climate change perspective. The environmental impact of water use depends as much on where and when it is extracted as the amount.
“Carbon emissions have the same impact on climate change regardless of where they occur in the world, while water use has drastically different social and environmental impacts depending on location,” said Jason Morrison of the US think tank Pacific Institute, which led the UN research.
Companies face difficulties in compiling accurate records of their water use. “For direct water consumption, the challenge is collecting accurate metered data from various water suppliers,” said Jack Cunningham, environmental affairs manager at J Sainsbury, the supermarket group. “It gets more complex as you move down the supply chain, particularly for businesses with different global suppliers.”
For many industries, crop irrigation is responsible for the bulk of water use. SABMiller says that in the Czech Republic, it takes 45 litres of water to make a litre of beer, compared with 155 litres of water in South Africa. “South Africa’s water demands will outstrip supply by 17% in 20 years, so we need to ensure our future water supplies there are protected,” said Andy Wales, the brewer’s head of sustainable development.
Greg Koch of Coca-Cola said that water shortages in Atlanta, Georgia, brought on by a drought forced Coke to shift production to other states. “Water is our lifeblood. We can’t afford to ignore the impacts of climate change,” said Koch.
Marcus Norton of the Carbon Disclosure Project, which annually ranks the environmental performance of the world’s largest companies, said it would publish a water version of its report later this year. “Investors increasingly see water as a risk so there is more pressure on companies to look beyond carbon,” said Norton.
“Water has taken longer to get on the corporate agenda partly due to the ‘noise’ around carbon and partly because relatively low water prices compared with energy have given the impression that water is an infinite resource,” said Guy Battle of Dcarbon8, the environmental consultancy.
Sonnemann agrees: “Now that Copenhagen is behind us, it’s a good time to bring attention to water because focusing on energy alone is not enough.”