Companies Urged to Disclose Water Use

In an implicit recognition that water footprints are becoming just as noteworthy as carbon footprints, the Carbon Disclosure Project has launched a program aimed at persuading over 300 global companies to begin issuing detailed reports on their water use.

The Carbon Disclosure Project is an investor-funded nonprofit organization that has worked with thousands of corporations on reporting greenhouse gas emissions. By measuring and disclosing greenhouse gas emissions, companies will have the information needed to manage and ultimately reduce their global warming pollution, while investors will have a better understanding of which companies are best prepared for climate change and the economic conditions that go with it.

I guess I should mention how here at River Network, we recognized a while ago that water is becoming the new carbon and that water is just as important to addressing our climate challenges as greenhouse gas emissions.

Having corporations disclose their water use and the impacts their operations have on water quality way will hopefully raise the profile of water’s irreplaceable value and encourage companies to increase their investments in water efficiency, reuse and low impact development.

Indeed, shareholders and investors are beginning to show a level of reverence for water that has been reserved for paddlers and anglers. As the NYT points out:

The move begins a campaign to put water consumption on par with carbon emissions as a concern of company shareholders. Scientists predict climate change will aggravate worldwide water shortages in the coming decades.

“For investors, it’s a material issue,” Marcus Norton, head of the new project, called C.D.P. Water Disclosure, said in an interview by phone from London. “It matters because long-term investors in particular see that water scarcity is going to impact companies’ operations and supply chains.”

Companies increasingly are running into water-related obstacles. Last week, New York State denied a permit for Entergy’s Indian Point nuclear power plant because of its enormous consumption of cooling water.

A few days earlier, the Environmental Protection Agency issued new water quality rules that could limit mining company operations. And in California, regulators recently pressured the utility giant FPL Group to use more water-efficient technology in a solar power plant project while denying access to water supplies to other developers.

I think it’s interesting to note that the examples given above – Entergy’s Indian Point nuclear power plant and FPL Group’s solar power plant project – both concern electric power production and the water constraints that energy companies are facing. For instance, the Indian Point nuclear power plant has been withdrawing an average of 2.5 billion gallons of water from the Hudson River every single day, killing an estimated 1 billion aquatic organism each year. As demand for electricity grows, how many watersheds do you think will be able to support water use of this magnitude? My hunch is not many.

Of course, as with most things water, disclosing water use is quite a bit more complicated than disclosing greenhouse gas emissions. For one thing, there are at least three different criteria that need to be measured: water withdrawals or diversions, consumptive water use, and water quality impairment. The first two are relatively easy to measure, but the data is useless unless it is put into a meaningful context of how that use relates to available water in the locations where that water is being used. In order to measure water quality impairment, one would need to consider thermal pollution, heavy metals and toxic pollution, potential water quality impacts from land use changes (i.e. filling in wetlands), and a number of other factors. Developing a standardized way to report on water use will hopefully be another important outcome of this effort.

Complications also arise due to the diversity of company operations and the complexity of supply chains. As a follow up article on the complexity of measuring water use explains:

Calculating a company’s water footprint poses some new challenges.

Among other things, the questionnaire sent to 302 corporations in water-intensive industries asks for details on water consumption, the percentage of a company’s operations in water-stressed regions of the world and a breakdown of how much water in their supply chains comes from such areas.

Sue Cischke, Ford Motor’s vice president for sustainability, environment and safety, said that while the automaker had detailed data on water use in its internal operations, it had far less information on water consumption by its suppliers.

“We’re still learning how to make those calculations in raw materials and in our supply chain,” said Ms. Cischke, whose company has already signed on to the new program, called C.D.P. Water Disclosure, along with L’Oréal, Molson Coors Brewing, PepsiCo, and Reed Elsevier.

Bart Alexander, vice president for global corporate responsibility at Molson Coors, said that collecting data on water use by suppliers was not sufficient to gauge the impact of the beer brewer’s global operations. “We need to know if the hops that go into our beer is in a water-stressed area or a water-rich area,” he said.

The water-energy nexus also adds to complications of reporting water use, especially when trying to compare water use to energy use and the benefits of conservation. Again from the NYT:

The linkage between water and energy complicates the equation. For instance, Mr. Alexander said, when the company switched from using hot water to cold water for certain operations at a facility in the United Kingdom, water use increased slightly but energy costs declined.

“Water use went up, but the carbon footprint went down,” he said.

It will be interesting to see how successful this project is. There are still a number of complex issues that need to be worked out, but the Water Disclosure Project is certainly a step in the right direction.

Hat-tip to Matt Polsky from Passaic River Coalition for the alerting me to this issue