Disclosure CEO Water Mandate 2014
description
Transcript of Disclosure CEO Water Mandate 2014
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1
Corporate Water DisClosure GuiDelinestoward a Common approach to reporting Water issues
September 2014
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Core team
Jason Morrison Peter Schulte Project Director Lead Author
Pacific Institute pacinst.org
Lauren Koopman and Natalie Teear PricewaterhouseCoopers www.pwc.com
Cate Lamb, Karina de Souza, and Marcus Norton CDP (formerly the Carbon Disclosure Project) www.cdproject.net
Tien Shiao and Paul Reig World Resources Institute www.wri.org
strateGiC partner
Bastian Buck and Laura Espinach Global Reporting Initiative www.globalreporting.org
aCknoWleDGments
The CEO Water Mandate Secretariat and project team would like to thank the Mandate-endorsing companies Merck, GlaxoSmithKline, Veolia, Coca-Cola, and Sasol, whose funding support enabled the development of these Guidelines. We would also like to recognize and thank the members of the Mandates Water Disclosure Working Group (WDWG) and the Corporate Water Disclosure Stakeholder Advisory Group (CWDSAG) for their ongoing support and feedback throughout the development of the Guidelines (the members of the WDWG and CWDSAG are listed in Appendix D).
DisClaimer
All of the views expressed in this publication are those of the CEO Water Mandate and do not necessarily reflect those of the project sponsors or the members of the WDWG or CWDSAG.
DesiGner
Dana Beigel
Cover photo: Notebook at Dreamstime
ISBN-10:1893790584 ISBN-13:978-1-893790-58-2
Pacific Institute 654 13th Street, Preservation Park Oakland, CA 94612 pacinst.org
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Corporate Water DisClosure GuiDelinestoward a Common approach to reporting Water issues
September 2014
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5Foreword
Companiesarefundamentallychangingthewaytheyaddresswater.Increasingly,theyareinvestinginwater-efficienttechnologies,workingwithsupplierstoencouragemoreresponsiblewateruse,designingcleanerandmoreefficientproducts(andthushelpingconsumerslowertheirwateruse),andseekingtoadvancesustainablewatermanagementoutsidetheirfencelinesasawaytomitigatewater-relatedrisksandnegativeimpacts.Atthesametime,corporatewaterdisclosuretheactofreportingtostakeholdersinformationrelatedtothecurrentstateofacompanyswatermanagement,theimplicationsofthatstateforthebusinessanditsstakeholders,andhowthecompanydevelopsandimplementsstrategicresponseshasemergedasakeycomponentofcorporatewatermanagementpractice.
Inresponsetothegrowingimportancetobusinessesofbothwatermanagementgenerallyanddisclosurespecifically,anumberofinitiativesareseekingtoprovideguidanceonhowcompaniescan:
Measuretheirwaterperformance
Assessconditionsintheriverbasinswheretheyoperate
Understandtheirwater-relatedchallengesandopportunities
Developeffectivewatermanagementstrategies
Communicatetheseissuestostakeholders
Theseinitiativeshavecatalyzedsignificantprogresstowardmoresustainablecorporatewatermanagement.However,theproliferationofwaterassessmentanddisclosuretoolsandmethodologieshasalsoledto:
Companiesdivertingimportantresourcestocompletemultiplewaterorsustainabilitysurveysofvaryingcontent
Companiesusingavarietyofmetricsthatarenoteasilycomparable,therebyweakeningthevalueofdisclosureofferings
Beyondthis,currentpracticeincorporatewaterdisclosure(evenamongthemostadvancedreporters)typicallydoesnotadequatelycapturetheincrediblycomplexandlocation-specificnatureofwaterresourcedynamicsandcorporateactiononwater.Manycompaniesarethereforelookingfordetailedguidanceonhowtomoreeffectivelydisclosethemanyelementsofcorporatewatermanagementpractice.
Foreword
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6 Corporate Water Disclosure Guidelines
TheCEOWaterMandatesCorporateWaterDisclosureGuidelinesofferacommonapproachtodisclosure.Theyputforwardmetricsthatcanbegintoharmonizepracticeandalsoprovideguidancefordefiningwhattoreport.ItisourhopetheseGuidelinesdriveconvergenceandharmonizationwithrespecttohowcompaniesreporttheirwatermanagementpracticeswhilehelpingtominimizereportingburdens,thusallowingcompaniestoallocatemoretimeandresourcestoactivelymanagewater.
ThePacificInstitute(representingtheMandateSecretariat)ledthedevelopmentoftheGuidelines,seekinginputfromorganizationsandinitiativeswithexpertiseinthisarea.PricewaterhouseCoopersLLPservedasastrategicadviserandprovidedinputthroughoutthisprocess.CDP(formerlytheCarbonDisclosureProject),WorldResourcesInstitute(WRI),andGlobalReportingInitiative(GRI)wereprojectpartners,offeringinsightregardingwaterdisclosurepracticesandhelpingtoensurethattheGuidelinesbuiltonexistingapproacheswherepossibleandappropriate.
TheprojectteamregularlyconsultedwiththeMandatesWaterDisclosureWorkingGroup(WDWG)comprisingrepresentativesfrommanyMandate-endorsingcompaniesaswellaswiththeCorporateWaterDisclosureStakeholderAdvisoryGroup(CWDSAG),whichincludedavarietyofrepresentativesfromcivilsocietygroups,water-relatedtooldevelopers,tradeassociations,government,andintergovernmentalorganizations.AcompletelistofWDWGandCWDSAGmemberscanbefoundinAppendixD.ConsultationwiththeseindividualswasgearedtowardensuringthattheGuidelinesremainuser-friendlywhileaddressingthewidearrayofcompanyandstakeholderinterestsincorporatewaterdisclosure.
Giventhatcorporatewatermanagementanddisclosurepracticearerapidlyevolving,theCEOWaterMandateplanstorevisitandamendtheGuidelinesasneeded.
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ContentsSECTION 1 Introduction .............................................................................................................4
Objectives...........................................................................................................................................4
HowToUsetheGuidelines.............................................................................................................4
SECTION 2 Aligning Disclosure with Corporate Water Management Practices .................8
TheBusinessCaseforCorporateWaterDisclosure..................................................................8
HowDisclosureFitsIntoCorporateWaterManagement...................................................... 10
TheLong-TermCorporateWaterManagementMaturityProgression................................ 12
HowDisclosureFitswithCorporateWaterManagementMaturity.................................... 14
SECTION 3 Company Water Profile .........................................................................................17
SECTION 4 Defining What to Report ......................................................................................20
RelevanceandMateriality:WhatareThey?............................................................................. 20
AssessingRelevanceandMaterialityforWater-RelatedTopics........................................... 21
STEP 1: Identifying Relevant Water-Related Topics ........................................................................ 21
STEP 2: Prioritizing Relevant Water-Related Topics ....................................................................... 24
STEP 3: Validating the Outcomes of the Materiality Assessment .................................................... 26
STEP 4: Review .................................................................................................................................. 26
CommunicatingtheProcessForDefiningWhattoReport.................................................. 26
SECTION 5 Detailed Disclosure ...............................................................................................30
UNDERSTANDINGANDLINKINGCOMPONENTSOFTHEFRAMEWORK.......................... 30
Basic and advanced reporting .......................................................................................................... 30
Geographic/geopolitical scale of reporting ....................................................................................... 32
Connections between sections and subsections ................................................................................. 32
Linkages across sustainability issues ................................................................................................. 33
ASSESSINGTHECURRENTSTATE.............................................................................................. 35
Context ............................................................................................................................................... 36
Performance ....................................................................................................................................... 40
Compliance ........................................................................................................................................ 47
CONSIDERINGTHEIMPLICATIONS........................................................................................... 49
Business Risks ..................................................................................................................................... 50
Business Opportunities ...................................................................................................................... 54
External Impacts ............................................................................................................................... 56
DEVELOPINGASTRATEGICRESPONSE.................................................................................... 60
Policies, Governance, and Targets................................................................................................. 61
Internal Actions............................................................................................................................. 66
External Engagement.................................................................................................................... 71
APPENDIX A: Corporate Water Disclosure Glossary .............................................................78
APPENDIX B: Harmonizing Terminology the Relationship between Water Scarcity, Water Stress, and Water Risk .........................83
APPENDIX C: Interactive Database of the Worlds River Basins .........................................85
Appendix D: Water Disclosure Working Group Members and Corporate Water Disclosure Stakeholder Advisory Group Members ................................87
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3Contents
SECTION 1 introduction
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4 Corporate Water Disclosure Guidelines
SECTION 1 introduction
OBJECTIVES
TheseCorporateWaterDisclosureGuidelinesseektoadvanceacommonapproachtocorporate water disclosure thataddressesthecomplexityandlocalnatureofwaterresources.Inordertoachievethisoverarchinggoal,theGuidelines:
Identifycommoncorporatewaterdisclosuremetricsthatsupportharmonizationandcomparabilityovertimeandacrosscompanies
Provideguidanceonhowcompaniescanassessthewater-relatedtopicsthatarethemostrelevanttothemandtheirstakeholders(aswellashowtoreportthisassessmentprocess)
Describehowcompaniescanbestreportactivitiesthataredifficulttodepictquantitatively,suchaspolicyadvocacyorengagementwithnongovernmentalorganizations(NGOs),governments,suppliers,andcommunities
Aligncorporatewatermanagementwithdisclosuresoastoenablecompaniestounderstandwhichinformationismostappropriatetoreportandhowtogeneratewaterdisclosurecontent
HOW TO USE THE GUIDELINES
STRUCTUREANDAPPLICABILITy
Corporatewatermanagementobjectivesandactivitiesvarygreatlydependingonindustrysectorandgeographiclocation.Thisdynamicleadstomanypossibledisclosureapproachesandmetricsthataremorerelevanttocertaincompaniesthanothers.Inthespiritofadvancingharmonizedreportingpractices,allthesuggestedmetricsandinformationprovidedintheGuidelinesaredesignedtobeapplicabletoabroadrangeofcorporatewaterusers,regardlessofindustrysectorandregion.However,manycompanieswilllikelychoosetoaugmenttheirreportswithmetricsandinformationparticularlyrelevanttotheirspecificindustryorgeography.
Corporate water disclosurealsovariessignificantlydependingontherelevanceofwatertothecompanyanditsstakeholdersandthematurityofacompanyswatermanagementpractices.Forthisreason,somecompaniesmaynotdeemitnecessaryorhelpfultoreportthefullrangeofinformationsuggestedintheseGuidelines.Othersmaybeabletoreportonlyalimitedamountofwater-relatedinformationduetonascentwatermanagementpractices.TheseGuidelinesaredesignedtobeapplicabletothiswidespectrumofprospectivedisclosers.Theyaredividedintofoursections.
Section 2: Aligning Disclosure with Corporate Water Management Practicesdiscussestheprocessesthatunderpinacompanyswaterdisclosure.Indoingso,itillustrateshowcompaniesgeneratewaterdisclosureinformationwithintheirbroaderwatermanagementpractice,aswellashowwaterdisclosureissituatedwithintheireffortstoimproveaswaterresourcemanagersovertime.Thissectioncanhelpacompanyassesstherelativematurityofitswatermanagementpracticeandindoingsoidentifythewater-relatedinformationthatitwilllikelybeabletoreportmostrobustly.
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5SECTION1Introduction
Section 3: Company Water Profiledescribeshowacompanycanofferasnapshotofitswatermanagementthatabroadspectrumofaudienceswilleasilyunderstand.Theprofilecanbeincludedincompanysustainabilityreports,websites,financialreporting,andotherpublications.
Section 4: Defining What to Report providesguidanceonhowcompaniescandeterminewhatwater-relatedtopicsarerelevanttothecompanyanditsstakeholdersandwhatinformationismaterialtoreport,aswellashowcompaniescanreportthisprocessitself.Thissectioncanhelpacompanyjustbeginningtoconsideritsapproachtowatermanagementtoassesstheextenttowhichitshouldreport.Itcanhelpmoreadvancedcompaniesdeterminewhichspecificwater-relatedtopicsarematerialtothem.
Section 5: Detailed Disclosureprovidesin-depthguidanceonthespecifictypesofinformationthatcanbeincludedincorporatewaterdisclosuresanddiscusseshowcompaniescanstructurethisinformationinacoherentmanner.Topromoteaccessibilitytoawiderangeofreaders,themetricsandotherinformationofferedinSection5areorganizedaccordingtomaturityofpractice.
Basic: Metricsorindicators(quantitativeorqualitative)thatcandemonstratemeaningfulaction.ThisinformationisdefinedinawaythatenablesmostSMEsandthosewithnascentwatermanagementprogramstocollectandreportit.Inmostcases,companiesfocusonbuildingtheircapacitytoassessanddisclosethesecontentareasbeforeproceedingtoreportingmoreadvancedpractices.
Advanced: Aspirationalguidanceaimedatcompanieswithmaturewatermanagementpractices.Inadditiontoreportingbasicpractices,advancedreportersalsoprovideabroaderandricherlookintotheirwater-relatedtopicsthatultimatelydeliversgreatervaluetodisclosureaudiences.
Section5alsoincludesseveralexcerptsfromactualcompanywaterdisclosuresthatservetohighlightgoodandinnovativereportingpractices.
Theappendixes,someofwhicharefoundattheendofthisdocumentandsomeofwhichareavailableontheweb-basedversionoftheseGuidelines,providevarioustypesofdetailedguidance,examplesofpractice,toolsandresources,andothermaterialsthatsupporteffectivecorporatewaterdisclosure.
Termsinpurple bold fontthroughouttheGuidelinesaredefinedintheglossaryinAppendixA.
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A web-based version of these Guidelines can be found at:
ceowatermandate.org/disclosure. It features the content offered in this print version as well as additional
guidance and resources. In this docu-ment, grey and yellow circles featur-
ing the wi-fi symbol link to guidance and tools available only on the web-based version of the Guidelines.
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6 Corporate Water Disclosure Guidelines
THECORPORATEWATERDISCLOSUREFRAMEWORK
Thefullrangeofwater-relatedinformationthatcompaniesreportissummarizedintheCorporateWaterDisclosureFramework(Figure1).TheDisclosureFrameworkisdividedintothreebroadpillarsofinformationwhichtrackdirectlywiththelastthreesectionsoftheseGuidelines(i.e.,CompanyWaterProfile,DefiningWhattoReport,andDetailedDisclosure).TheDisclosureFrameworkservesasawaytocategorizethevarioustypesofcontentfeaturedincomprehensivecorporatewaterdisclosureandtounderstandthestructureoftheseGuidelines.
FiGure 1: Corporate Water Disclosure Framework
DETAILED DISCLOSURE
External impacts
Policies, governanceand targets
Current state Implications Response
Def
inin
g W
ha
t to
Rep
or
t
External engagement
Business risks
Performance Internal actions
Compliance
Context
Co
mpa
ny
Wa
ter
Pr
ofi
le
Business opportunities
Linkages across sustainability issues (e.g., food, energy)
Connections between sections and subsections
HOWTOUSETHEGUIDELINESINCONjUNCTIONWITHOTHERTOOLS
TheGuidelinesaimtoinformexistingandemergingworkinthefieldofcorporatewatermanagement,assessment,anddisclosure.Specifically,CDPwillseektoalignfutureiterationsofitsWaterInformationRequestwiththeGuidelineswhereverpossible.ThemetricsandinformationputforthintheGuidelinesmightalsoprovehelpfulinthedevelopmentoffuturewater-relatedaspectsofGlobalReportingInitiatives(GRI)G4Guidelines.Finally,itisourhopethattheGuidelinesmightbeadoptedby,orintegratedintoproductsbeingdevelopedby,othercorporatewaterinitiatives,suchastheAllianceforWaterStewardship(AWS),Ceres,GlobalEnvironmentManagementInitiative(GEMI),WaterFootprintNetwork(WFN),WorldBusinessCouncilforSustainableDevelopment(WBCSD),WorldResourcesInstitute(WRI),WorldWildlifeFund(WWF),andothers.
TheGuidelinesreferenceotherwateranddisclosuretoolsandresourcesatrelevantpointsthroughoutthedocument.Alistofthesetoolsandresourcesisprovidedontheweb-basedversionoftheGuidelines.However,theGuidelinesdonotendorseanyspecifictools.
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7SECTION1Introduction
SECTION 2 aligning Disclosure with Corporate Water management practices
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8 Corporate Water Disclosure Guidelines
SECTION 2 aligning Disclosure with Corporate Water management practices
Corporate water disclosureisonlyoneaspectofacompanysoverallwatermanagementprogramsandpractices.Indeed,effectiveimplementationofcorporatewaterstrategiesreliesoniterativemanagementsystemsfordifferentwater-relatedactivities,includingthosepertainingtointernalcorporatepolicies,governance,andoperationalperformanceaswellasengagementwithstakeholdersoutsidethecompanyfenceline.
Thissectiondescribeshowwaterdisclosureissituatedwithinandcontributestothesebroadermanagementprocessesandhowitprovidesbusinessvalue.Thesectionoutlinesthepracticalandadministrativestepsthatmakeupatypicalcorporatewatermanagementcycleandthenoffersanoverviewofhowthelong-termmaturityandevolutionofacompanyswatermanagementpracticesrelatetoitswaterdisclosureefforts.
THE BUSINESS CASE FOR CORPORATE WATER DISCLOSURE
Companiesareincreasinglymotivatedtobeproactiveandcomprehensiveinmanagingtheirwater risksandnegativeimpacts,1seeinganumberofadvantagestodoingso,including:2
1. Ensuringthecompanyslegalandsociallicensetooperateinaspecificlocation
2. Preventingorreactingtooperationalcrisesresultingfromtheinadequateavailability,supply,orqualityofwaterorwater-dependentinputsinaspecificlocation
3. Gaininganadvantageovercompetitorsbecauseofstakeholderperceptionsthatthecompanyusesnaturalresourcesresponsiblyandhasaminimalnegativeimpactonpeopleandecosystems
4. Assuringinvestorsandmarketsthatbusinessoperationswillcontinuetobeprofitablebysecuringwateravailabilityforoperationsandreducingwater-relatedcosts
5. Upholdingcorporatevaluesbasedonsustainableandequitabledevelopmentbycontributingtothewell-beingofthebasins,ecosystems,andcommunitiesinwhichthecompanyoperates
1Unlessotherwisestatedthetermsimpactsandexternal impactsrefertothesignificanteconomic,environ-mentalandsocialeffects,bothpositiveandnegative,ofacompany,itsoperations,orproducts.
2Foranin-depthdiscussionofwater-relatedbusinessrisksandthebusinesscaseforsustainablecorporatewatermanagement,seetheofficialCEOWaterMandatewebsiteatceowatermandate.org.
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9SECTION2AligningDisclosurewithCorporateWaterManagementPractices
Disclosuresupportsthesegoalsinavarietyofways.Manycompanieshavefoundthatthedisclosureprocessitselfimprovestheirinternalunderstandingofwater-relatedchallengesandcontributestothedevelopmentofeffectiveresponsestrategies.Forthosecompaniesthathavetakensignificantstepstomanagetheirwater-relatedrisksandnegativeimpacts,disclosureprovidesanopportunitytodemonstrateprogressandgoodpracticetobothinternalandexternalstakeholders.Thisinturnhelpscompaniesstrengthentheirbrandvalueandreputation,bolsterstalentrecruitment,andfostersincreasedinvestorconfidence.Corporatewaterdisclosurealsooffersavehicletoestablishadialoguebetweencompaniesandtheirstakeholders.
Showcasingprogressandarticulatingfuturetargetsandcommitmentsviadisclosure(whileallowingstakeholderstoprovidefeedbackontheseaspects)strengthenscorporateaccountabilityandbuildscredibilitywithemployees,localcommunities,civilsociety,andgovernments.Disclosurecanalsohelpcompaniesholdotherstakeholdersaccountableonwaterissues.Forexample,ifacompanycanshowthatithassignificantlyreduceditswaterdemand,ithasastrongerpositiontocallongovernmentstobettermanagewaterthroughoutabasininsteadoflettingthegovernmentassumethatthecompanysplantorsupplieristheproblem.Developingtrustandaccountabilitywiththesestakeholdersreinforcesacompanyslicensetooperateandservesasastartingpointforpartnershipsandcollectiveactioninsupportofsharedrisksandsustainablewatermanagement.
Water has been an important part of H&Ms sustainability work for many years. As part of this, our water disclosure work helped us to more accurately identify our compa-nys dependencies on water and the impact we have on freshwater ecosystems, and hence it helped us to address even more of the challenges and opportunities connected to water.
Helena Helmersson HeaD oF sustainaBilitY, H&m
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The water-related interests of different stakeholder groups and potential disclo-
sure audiences
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10 Corporate Water Disclosure Guidelines
HOW DISCLOSURE FITS INTO CORPORATE WATER MANAGEMENT
Atypicalcorporatewatermanagementcyclefeaturesaseriesofpracticalstepsthatacompanyusesto
understanditsrelationshipwithwater,undertakeresponsestrategies,andeventuallycommunicate
bothtostakeholders.Understandingeachstepandthetypeofinformationgeneratedthroughthis
processallowsformoreeffectivereporting.Thissectiondescribeshowatypicalcorporatewater
managementcyclealignswiththeDisclosureFrameworkpresentedintheseGuidelines.
Thoughcorporatewatermanagementprocessesvaryfromcompanytocompany,theycanbe
generalizedasbeingiterativeandhavingthefollowingfundamentalsteps.Theprocessdepictedbelow
asanillustrativeexampleisderivedfromtheUNGlobalCompactManagementModel3andadaptedfor
water-relatedmanagement.
1. COMMIT. Committodrivesustainablewatermanagement.
2. ACCOuNT. Collectdataoninternalwaterperformanceandtheconditionofthebasinsinwhichthecompanyoperates.
3. ASSESS. UsethedatageneratedintheAccountphasetoidentifywater-relatedbusinessrisksandopportunitiesandnegativeimpacts.
4. DEfINE. Defineandrefinecorporatewaterpolicy,strategies,andperformancetargetsthatdriveperformanceimprovementsandaddressrisksandnegativeimpacts.
5. IMPlEMENT. Implementwaterstrategiesandpoliciesthroughoutthecompanyandacrossthecompanysvaluechain.
6. MONITOR. Monitorprogressandchangesinperformanceandbasinconditions.
7. COMMuNICATE. Communicateprogressandstrategiesandengagewithstakeholdersforcontinuousimprovementbymeansofcorporatewaterdisclosure.(Thisdocumentprovidesaframeworkandguidanceforconductingthisstepinaneffectiveandharmonizedmanner.)
Thisprocessissequentialanditerativeandmightbeconceptualizedasanupwardspiraldrivingamindsetofcontinuousimprovement.Italsoincludestwoongoingactionsthatreinforceeachofthesevensteps.First,acompanycontinuallyengageswithkeystakeholdersinordertobetterunderstanditswater-relatedrisksandimpactsandreceiveinputontheefficacyofitspoliciesandresponsestrategies.Second,acompanycontinuallyassessestherelevanceofvariouswater-relatedissuestounderstandnewtrendsandconditionsandidentifytheissuesofhighestpriorityforthebusinessanditsstakeholders.TheprocessofassessingrelevanceisdiscussedindetailinSection4.
Figure2showshowthismanagementcyclefitswiththeDisclosureFramework.
3UNGlobalCompact,UN Global Compact Management Model,2010.
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11SECTION2AligningDisclosurewithCorporateWaterManagementPractices
FiGure 2: A Corporate Water Management Cycle and Its Relation to the Disclosure Framework
Current State Context Performance Compliance
Implications Business risks Business opportunities External impactsCross-cutting themes
Connections between sections and subsections Linkages across sustainability issues
Response Policies, governance and targets Internal actions External engagement
Communicate
Commit
Account
Assess Define
Implement
Monitor
Ongoing: Determine relevance Engage stakeholders
NOTE: The UNGC Management Models Measure step has been broken into two components: Measure and Monitor to align more closely with water-specific management processes
ThisgeneralmanagementcycleincludesallthepracticalandadministrativestepsneededtogeneratethedisclosurecontentdescribedintheDisclosureFramework.IntheAccountphase,companiesquan-tifytheirinternalperformance(e.g.,withdrawals,waterconsumption,waterdischarge)andseektounderstandbasinconditions(e.g.,wateravailability,water quality)tobetterunderstandthecurrentstateoftheirbusinesswithrespecttowater.IntheAssessphase,companiesinterpretthesedatatobet-terunderstandtheimplicationsforbusinessviability(i.e.,risksandopportunities)andthewell-beingofthepeopleandecosystemsthatthebusinesstouches(i.e.,whethertherearenegativeimpactsonbasinconditions).TheDefine,Implement,andMonitorphasesofthemanagementcyclecompriseaseriesofactionswherebycompaniesdevelop,operationalize,andevaluateresponseactions(corporatepoliciesandstrategies,internalactions,andexternalengagements)thataddresstheirwater-relatedrisksandnegativeimpacts.
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12 Corporate Water Disclosure Guidelines
THE LONG-TERM CORPORATE WATER MANAGEMENT MATURITY PROGRESSION
Whilethemanagementcycleofferedintheprevioussectiondescribesthevariouspracticalstepsthatcompaniesconductaspartoftheirbroadercorporatewatermanagementprocesses,itdoesnotspeaktohowwatermanagementpracticesevolveandmatureoverthelongterm.
Forexample,thosecompaniesjustbeginningtoprioritizewaterissuesoftenfocusonwatermeasurementandefficiencyprogramswithintheirdirectoperations.Thosewithadvancedwatermanagementprogramsmightaddressawiderarrayofwater-relatedissuessuchasacomprehensivecorporatewaterstrategy,valuechainmanagement,andengagementinsustainablewatermanagementactivitiesoutsidethecompanyfenceline.
Corporatewatermanagementcangenerallybecategorizedintothefollowingtypesofactivities:
ProvideWASHservicesintheworkplace4Providingandproperlymaintainingdrinkingwater,sanitation,andhygiene(WASH)servicesintheworkplacesupportsthehealthandwell-beingofacompanysworkers.
MeasureandmonitorwatermanagementpracticesAnotherearlystepiscontinuouslytrackingtheextenttowhichdirectoperationsuseandaffectwaterresources.Suchmeasurementallowsacompanytoidentifyfacilities(andspecificprocesseswithinfacilities)thatrequirepriorityactionandtogaugeprogress.
DriveoperationalefficiencyandreducepollutionAcompanycanbuildonitsunderstandingofitswatermanagementpracticesbyimplementingwaterefficiencyandpollutionreductionmeasuresthatimproveitsperformanceandbegintomanageitsrisksandnegativeimpacts.
4TheWorldBusinessCouncilforSustainableDevelopmentsWASHattheWorkplacewebsiteprovidesavarietyofresourcesthathelpcompa-niesensuretheyprovidesufficientWASHservicesintheiroperations.
Over the years, we have etablished a robust mechnism for annual water disclosure, which not only help us to abide with our comitment of transparency to the CEO Water Mandate but also enables us to identify gaps, explore possibili-ties of improvement and devise mechanisms for intra-company competi-tion to achieve water use efficiency.
aJit GulaBCHanD CHairman anD manaGinG DireCtor, HinDustan ConstruCtion CompanY
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Identifyandunderstandwater-stressedandhigh-riskbasins Tofullyunderstandandaddressitsbusinessrisksandimpactsandproperlyprioritizeactionamongdifferentgeographicareas,acompanymusthaveafirmunderstandingofthecontextsinwhichitoperates.Inparticular,itidentifiesandinvestigatesthoseareasthatareexperiencingwater stressormightotherwisebeconsideredhigh-risk.Thisknowledgeistypicallygainedthroughinternaldatacollectionandassessmentandtheuseofthird-partydatasetsandtools.
IntegratewatermanagementintobusinessstrategyAnuancedunderstandingofriverbasinsandthecompanysownoperationswithinthempositionsacompanytobecomestrategicaboutdevelopingpoliciesandprogramstoaddressitstopwaterpriorities.Comprehensivestrategiesareintegrallylinkedtocorebusinessandlong-termbusinesssuccess.Strategydevelopmentcanincludemanydimensions,suchasestablishingcorporategovernanceandaccountabilitymechanisms,settinggoals,anddefiningawatermanagementphilosophy.
LeverageimprovedpracticesthroughoutthevaluechainMorematurecompanieslookbeyondtheirdirectoperationstoaddresswaterrisksandnegativeimpactsinthevaluechain.Inordertoaddressthoserisksandopportunities,acompanyassessesvaluechainexposuretowater risktoconsidertheimpactsitsproductsmayhaveonwaterresourcesandhowitssuppliersareaffectedbyandcontributetowater-relatedchallenges.Acompanythenusesitsinfluencetodriveimprovedpracticesthroughoutthevaluechain.
Advancesustainablewatermanagementandengageincollectiveaction5Acompanywiththemostadvancedwatermanagementpracticesmaylooktoengageexternallytoensurelong-termbusinesscontinuitybycontributingtothesustainablemanagementofsharedwaterresourcesonwhichthecompanyrelies.Suchplace-basedexternal
5TheCEOWaterMandates2010publicationGuide to Responsible Business Engagement with Water Policy offersdetailedguidanceonhowcompaniescanbestengagewithgovernmentsandotherstoadvancesustainablewatermanagement.
Water shortages and poor water quality can cause pro-duction shortfalls, price vol-atility, higher energy costs, regulatory action, competition and social unrest. Because of these material risks, Calvert expects companies we own to measure, mitigate and dis-close information about their water risks and water man-agement strategies. Corpo-rate water disclosure allows Calvert to assess how well a potential investment is posi-tioned for sustainable growth and responsible business and in turn, aides Calvert in offer-ing our investors responsible investment opportunities.
BarBara J. krumsiek, presiDent, Ceo, anD CHair oF CalVert inVestments, inC.
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14 Corporate Water Disclosure Guidelines
engagementoccursinavarietyofforms,rangingfrominformationsharing,tocommunityengagementandbasin-restorationprojects,toworkingwithlocalandregionalgovernmentstostrengthenthelocalwatermanagementcapacity.Inmostcases,thisrequirescollaborationwithotherorganizationsandactors(i.e.,collectiveaction),exposingthecompanytocomplexdependenciesandincreasedexpectations.
HOW DISCLOSURE FITS WITH CORPORATE WATER MANAGEMENT MATURITY
Ideally,companiesworktoadvanceallseventypesofwatermanagementactivitiesconcurrently.However,duetothecomplexityofaccountingforandmanagingwaterandthefactthatformanycompanieswaterhasonlyrecentlyemergedasahigh-prioritycorporatesustainabilityissue,manycompaniescurrentlypursueonlyoneortwoactivities.
Sincewatermanagementactivitiesdifferwithrespecttotimeandresourcecommitments,aswellaslevelofcomplexityanddifficulty,companiestendtopursuetheminasimilarorder(thoughthiscanvaryfromcompanytocompanywithinandamongindustrysectors).Forexample,improvedoperationalperformanceistypicallyaprerequisiteforeffectivecollectiveaction.
Thematurityofacompanyswatermanagementpracticeisdirectlyrelatedtothematurityandcomprehensivenessofitscorporate water disclosure.Asthecompanyexpandsitswatermanagementactivitiestoaddressawiderrangeofrisksandimpacts,thescopeofitsdisclosurepracticeexpandsaswell.Thus,ifacompanyidentifieswhereitresidesonthisprogression,italsogainsinsightintothetypesofinformationthatitisabletoreportrobustly,aswellashowitswatermanagementanddisclosurepracticemightexpandovertime.6Figure3showshowthetypesofmanagementactivitiesdescribedabovealignwithandlinktothevarioussubsectionsoftheDisclosureFramework.
6CDPprovidesaWaterReportingRoadmapthattracksthematurityofcorporatedisclosurerela-tivetoinformationbeingreported.
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linking the Disclosure
framework to the Mandates
Six Elements
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15SECTION2AligningDisclosurewithCorporateWaterManagementPractices
FiGure 3: Linking Corporate Water Management Maturity and the Disclosure Framework
Context
External impacts
Policies, governance &
targets
External engagement
Business risks
Performance
Internal actions
Compliance Business
opportunities
Business risksBus. opportunitiesExternal Impacts
(Value chain)
Internal actions(Value chain)
PerformanceCompliance (Value chain)
Provide WASH services in the
workplace
Identify and understand
water-stressedand high-risk basins
Integrate watermanagement intobusiness strategy
Leverage improvedperformance in the
value chain
Advance sustainablewater management
and collective action
Measure and monitorwater management
practices
Drive operationalefficiency and
reduce pollution
Through regular and open disclosure, common goals can be estab-lished for shared rewards. Molson Coors believes that disclosure around our water use is imperative in order to provide a collective understanding and approach to effective water stewardship in the communities where we operate. We continue to realize the direct benefits of disclosure, through risk reduction, cost savings and water quality improvements, and together with positive community engagement, education and outreach, water stakeholders within our brewing and supplier communities benefit.
peter sWinBurn, Ceo, molson Coors BreWinG CompanY
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16 Corporate Water Disclosure Guidelines
SECTION 3 Company Waterprofile
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17SECTION3CompanyWaterProfile
SECTION 3 Company Water profile
AkeyaspectoftheDisclosureFrameworkistheCompanyWaterProfile,ahigh-leveloverviewofacompanyswaterissuesandmanagementefforts.Inessence,theprofileprovidesanexecutivesummarythat,duetoitsbrevity(oneortwopages),addscontextandmeaningtothewiderarrayofmoredetailedwater-relatedinformationthatthecompanyoffers.Profilesaredesignedtoofferasnapshotofwaterperformance,risks,impacts,andresponsestrategiesthatnontechnicalaudiencescaneasilyunderstand.Forsomecompanies,particularlySMEsorthoseforwhichwaterisonlymarginallysignificant,theprofilemayconstitutetheonlywater-relatedinformationdisclosed.
CompanyWaterProfileswillvarywithrespecttolengthandsophisticationdependingonthematurityofacompanyswatermanagement;however,aprofileshouldbebriefandincludethefollowingbasicinformationregardingthefollowingcomponents:
ThecompanysinteractionswithwaterCompaniesdescribegenerallyhowtheyutilizewaterresources(e.g.,theiroperationalusesforwater,thenatureoftheirwater discharge,theimportanceofwatertothevaluechain,thewateruseoftheirproducts).Ultimately,readersshouldcomeawaywithaclearideaofhowthecompanyutilizeswaterresourcesandwhyandtowhatextentwaterisimportantforbusinessviability.
ThecompanyswaterchallengesandopportunitiesCompaniesthenprovideahigh-leveldiscussionoftheopportunitiesandchallengesthatwaterposestothebusinessandtheextenttowhichwater-relatedissuesarerelevantforthecompanygenerally.Thisdiscussionsynthesizesinformationabouthowthecompanyuseswaterwithadiscussionofglobalwatertrendsandspecificbasinconditionsinordertoprovideanoverviewofthecompanyswater-relatedbusinessrisks,opportunities,andimpacts.
ThecompanyscommitmentandresponseAprofilecanalsosummarizethestepsthecompanyistakingtoaddresswater-relatedrisksandimpactsandtoseizewater-relatedopportunities.Suchasummarycantouchuponmanyissues,rangingfromahigh-levelcommitmenttowatersustainabilitytospecificcompanypoliciesandstrategies.Profileswillvarydependingonthematurityofthemanagementpractices.Somecompaniesmaychoosetosituatethematurityoftheirwatermanagementpracticewithinabroadercontinuumandarticulatehowtheyanticipatetheirstrategiesandprogramswillgrowandevolveovertime.
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Example of an effective Company
Water Profile
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18 Corporate Water Disclosure Guidelines
ProfilemetricsthatprovideasummaryofcompanywidewaterperformanceandriskAprofileoffersachancetoprovideaquantitativesnapshotofcompanywidewater-relatedperformanceandrisk.Todoso,thecompanydemonstratesitsperformanceovertimewithrespecttotheprofilemetrics:
1) Totalandpercentageofwithdrawalslocatedinwater-stressedorwater-scarceareas2) Percentoffacilitieswithawater-relatedregulatorycompliance violation3) Percentoffacilitiesadheringtorelevantwater qualitystandards4) Averagewater intensityinwater-stressedorwater-scarceareas(asappropriate)7
Ideally,acompanywilldisplaynumerousyearsofdataforthesemetrics(inchartortabularformat)inordertodemonstrateperformanceovertime,usingabase yeartotrackprogress.Thearticulationoftargetsforoneormoreofthemetricscanalsoservetoreinforcerelevantpolicycommitmentsandstrategies.
ComparabilityInsomeinstances,itmaybeappropriatetomakecomparisonsofprofilemetricsandotherdataacrosscompanies,especiallyforcompanieswithinthesameindustrysector.However,companiesandtheirstakeholdersshouldbecautiouswhendoingso.Companyresultsmayvary,andthusnotbecomparablewiththoseofothercompanies,duetothedatasetsandtoolstheyusetoassessconceptssuchaswater stress.Furthermore,metricsrelatedtowaterintensity,thoughhelpfulfortrackingacompanysprogressovertime,maynotbefitforcomparisonacrosscompaniesduetodifferenttypesofproductsthatinherentlyrequiredifferentvolumesofwater.Otherreasonsprofilemetricsmaynotbecomparablebetweencompaniesisthattheydependonreport boundaries.Forexample,datafromaverticallyintegratedcompanyandacompanywhoseoperationspertaintoonlyonevaluechainsegmentarenotcomparable.TheseGuidelinessupporttheapproachtothereportingboundariesoutlinedintheGreenhouseGasProtocol,whichdoesnotspecifyasinglemethodologybutratherdescribestwocommonapproaches(operationalandorganizationalboundaries).8Thecredibilityofcomparisonsisenhancedwhenreporteddataareindependentlyverified.9
AlistofhotspotswhererisksandimpactsaremostlikelyLastly,profilesallowcompaniestoshedlightonthewater-stressedandhigh-risklocations(orhot spots)wheretheyaremostlikelytoexperiencewater risksorcreatenegativeimpacts.Ideally,acompanywillprovidealistofwater-stressed(orotherwisehigh-risk)basinswhereithasoperations.TheContextsubsectionofSection5offersguidanceonhowcompaniescanconductabasicassessmentofhotspots.
ACompanyWaterProfilecanserveseveralfunctionsandcanbepresentedinnumerousformats,includingthefollowing:
Theexecutivesummaryofawater-specificsustainabilityreport Awater-relatedsummaryinshortsustainabilityreports Apageinthecompanywebsite Partoftheannualreport
7Water-intensitymetricsmaynotbeusefulorappropriateforallcompaniesandindustrysectors.
8WorldResourcesInstitute(WRI)andWorldBusinessCouncilonSustainableDevelopment(WBCSD),The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard,rev.ed.,2004.
9TheEuropeanUnionsGuidance for the implementation of the EU Organisation Environmental Footprint (OEF) during the Environmental Footprint (EF) Pilot Phaseprovidesfurtherinstructionfordataverificationandhowitcanbeappliedforcomparabilitypurposes.
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Guidance on How to Measure and Re-port Profile Metrics
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19SECTION3CompanyWaterProfile
SECTION 4 Defining What to report
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20 Corporate Water Disclosure Guidelines
SECTION 4 Defining What to report
Companiescanreportonavastrangeofsustainabilitytopics(useofwater,energy,andland;waste;greenhousegasemissions,andsoon).Evenwithintherealmofwater,numerousissuesaffect,andareaffectedby,companiestovaryingdegrees,dependingonthegeographiclocation,industrysector,andothercircumstances.Tobeeffectiveinitsreporting,acompanymustdeterminewhichwater-relatedtopics(e.g.,water scarcity,poorambientwater quality,inadequateaccesstodrinkingwaterorsanitation,flooding)aremostimportanttoitsstakeholders,whichtopicshave(ormayhave)significantimpactsonpeopleandecosystems,andwhichhavethepotentialtogeneraterisksoropportunitiesforthebusiness.
Thissectionprovidesguidanceonhowacompanycandefinewhichwater-relatedtopicsandinformationitshoulddisclose,aswellashowitcaneffectivelycommunicatethisprocessanditsoutcomes.
RELEVANCE AND MATERIALITY: WHAT ARE THEY?10
Insustainabilityreporting,materialityiscommonlythoughtofasathresholdatwhichcertainsustainabilitytopicsbecomerelevantenoughforacompanytoreporton.TheGlobalReportingInitiative(GRI)definesmaterialtopicsasthosethat:
Reflectthecompanyssignificanteconomic,environmentalandsocialimpactsor
Substantivelyinfluencetheassessmentsanddecisionsofstakeholders (suchasemployees,investors,suppliers,localcommunities,governments,investors,orconsumers)
Thesematerialtopicsoftenhaveasignificantfinancialimpactintheshorttermorlongtermonacompany.Theyarethereforealsorelevantforstakeholderswhofocusstrictlyonthefinancialconditionofacompany.
Materialityandrelevanceareoftenusedinterchangeably.However,theyaretwodistincttermswhosesubtledifferencesarecriticaltocompaniesseekingtodefinewhichcontenttoreport:
Relevanttopicsarethosethatmayreasonablybeconsideredimportantforreflectingthecompanyseconomic,environmentalandsocialimpacts,orinfluencingthedecisionsofstakeholders.Theythereforepotentially,butnotnecessarily,meritdisclosure.
Materialtopicsarethesubsetofrelevanttopicsthatareultimatelydeterminedtobesufficientlysignificanttoreporton.
Bothterms,withinthecontextofsustainabilityreporting,inherentlyrequiresomesubjectivejudgments.Reportingcompaniesshouldbetransparentaboutthesejudgments.
10Formoredetailedguidanceondefiningreportcontentforasustainabilityreport,seetheGlobalReportingIni-tiative(GRI)SustainabilityReportingGuidelines(G4)(pages31-40oftheG4 Implementation Manual).GuidanceinthissectionisdrawnheavilyfromtheprocessoutlinedintheG4Guidelines.
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21SECTION4DefiningWhattoReport
ASSESSING RELEVANCE AND MATERIALITY FOR WATER- RELATED TOPICS
Theprocessofdeterminingacompanysmaterialwater-relatedtopics,andtherebydefiningwhichwater-relatedinformationshouldbereported,hasthreekeysteps:
1) Identifyingalistofrelevantwater-relatedtopicsbasedonthecompanysrisks,opportunities,andimpactsonpeopleandecosystems,andinwhatlocationsinthecompanyandinthevaluechainthesetopicsarerelevant
2) Prioritizingtherelevantwater-relatedtopicsbasedonanassessmentofthesignificanceoftherisks,opportunities,andimpactstheyposeandtheviewsexpressedbystakeholders
3) Validatingtheoutcomesofthematerialityassessment
Inaddition,acompanyreviewsitsmaterialityassessmentaspartofeveryreportingandmanagementcycle.Thiswillhelpitcaptureongoingchangesinglobalwaterchallenges,specificbasinconditions,stakeholderexpectationsandpriorities,andhowandwherethecompanyoperates.
Thisprocessisunderpinnedbyanongoingstakeholderengagementthatallowsthecompanytoidentifyemergingwater-relatedtopicsandtobetterunderstanditswater-relatedrisks,opportunities,andimpacts.Acompanymaywishtointegratewaterintoitsbroadermaterialityassessmentforsustainabilitytopicsorundertakeanin-depthmaterialityassessmentfocusedspecificallyonwater-relatedtopics.Whichevermethodisused,acompanyshouldensurethatitdoesnotassesswaterinisolationfromothersustainabilitytopics,becauseitmayfailtoidentifyrelevantlinkagesandtrade-offsbetweenwaterandothersustainabilityissues.TheGRIG4Guidelinesdescribeagenericprocessfordefiningacompanyssetofmaterialsustainabilitytopicstobemanagedandreported.
STEP1:IDENTIFyINGRELEVANTWATER-RELATEDTOPICS
1.1 Determining reporting boundaries for water
Asafirststep,acompanydeterminestherangeofentitiestobeincludedintherelevanceandmaterialityassessment.Basicdisclosersprovideinformationfortheentitiestheyownorcontrol(thosetypicallyincludedinitsconsolidatedfinancialstatements,suchassubsidiariesorjointventures).Advancedwaterdisclosers,inadditionandseparately,provideinformationforoutsideentitiesinthevaluechain(e.g.suppliers)wheretherearesignificantrisks,opportunities,orimpacts.
Thereareseveralmethodologiesavailablefordefiningtheboundaryofatopicforreportingpurposes,notablythosesuggestedbytheGHGProtocolandtheGRIG4Guidelines.
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22 Corporate Water Disclosure Guidelines
1.2 Assessing whether water is a relevant sustainability topic
Next,companiesassesswhetherwaterisgenerallyarelevantsustainabilitytopic.Companiestypicallyconsiderthegeneralexposureoftheirindustrysectortowater-relatedrisksandthelikelihoodthattheywillcreatenegativewater-relatedimpacts.Thentheyassesstheriskexposureandlikelihoodofcreatingnegativeimpactsinthespecificbasinsinwhichtheyoperate.11Table1,thoughlikelynotcomprehensive,offersanoverviewofindustrysectorstypicallyexposedtosignificantwater-relatedbusinessrisksduetothenatureoftheirwateruse.
taBle 1: Industry Sectors with High and Medium Exposure to Water-Related Risks
Agriculture
Beverage producers
Biomass power production
Chemicals
Clothing & apparel
Electric power production
Food producers
Food retailers
Forestry & paper
Freshwater fishing & aquaculture
Hydropower production
Mining
Oil & gas
Pharmaceuticals & biotech
Technology hardware & equipment, semiconductors
Water utilities and services
Construction & materials
Gas distribution & multi-utilities
Manufacturing of industrialhousehold goods, home construction, leisure goods
Media (printed)
Real estate (asset owners)
Transportation
Travel & leisure
HIGH PRIORITY MEDIUM PRIORITY
Source:Ceres.TheCeresAquaGauge:AFrameworkfor21stCenturyWaterRiskManagement,2011.
11Avarietyoftoolsareavailableforsuchanassessment.TheCeresAquaGaugefeaturesalistofhigh-andmedi-um-riskbasins,whiletheWBCSDGlobalWaterTool,WWF-DEGWaterRiskFilter,andWRIAqueductWaterRiskAt-lasalloffermethodsbywhichcompaniescanassesswaterstressandwaterriskatahigh-level.TheGEMILocalWaterToolandWFNWaterFootprintAssessmentTooloffermoregranularassessmentsofwaterstress.Moreinformationonallofthesetoolscanbefoundinontheweb-basedversionoftheGuidelines.
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23SECTION4DefiningWhattoReport
Afterthishigh-levelassessmentofwater risksbasedonindustrysectorandbasinconditions,companiescanlocatethemselvesonthematrixinFigure4.
FiGure 4: Measuring Relative Exposure to Water Risk and Impacts
Low Medium High
SECTOR
BASIN
High
Medium
Low
CompaniesthatfallintheredareaswillbenefitfrommanagingwaterinarobustmannerandreportingonwaterinadetailedmannerasdescribedinSection5oftheseGuidelines.Thosethatfallintheorangeareaswillcertainlywanttoconsidertheirwater-relatedchallengesandseek,ataminimum,toprioritizereportingtheinformationdescribedinSection3:CompanyWaterProfile.
Acompanymayalsoassesswaterasarelevanttopicifithasidentifiedopportunitiestodrivepositivebusinessvalueorgeneratepositivewater-relatedimpactsforpeopleandecosystems.
1.3 Identifying specific water-related topics to report
Reportingcompaniesthenseektodeterminewhichspecificwater-relatedtopicsareofparticularrelevancebyassessingthecompanyswater-relatedrisks,opportunities,andimpactsonpeopleandecosystems.Atthislevelofassessment,acompanyconsidersatleastthefollowingbroadconsiderations:
ItsimpactsonwaterresourcesandaccesstoWASHservices
Businessrisksstemmingfrombasinconditions(e.g.,waterscarcity,pollution,regulatoryuncertainty,etc.)
Opportunitiestocontributetosustainablewatermanagement
Opportunitiestoadapttoensuingchangesinbasinconditions(e.g.,climatechangeorlanduse)andplannedchangesinpoliciesandregulatoryframeworks
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24 Corporate Water Disclosure Guidelines
Potentialglobal-,regional-,andbasin-levelwater-relatedtopicsthatmightbeconsideredpartoftheidentificationstepinclude,butarenotlimitedto:
Waterscarcityandwaterstress
Poorambientwater quality
Regulatoryuncertainty
Insufficientinfrastructure
InadequateaccesstowaterandWASHservices
Drought
Flooding
Climatechange
Changingdemographics
Limitedmanagementcapacity
Ecosystemvulnerability
Totalbasinavailability
Supplyvariability
Culturalandreligiousvalues
Mediaawareness
STEP2:PRIORITIZINGRELEVANTWATER-RELATEDTOPICS
InStep2,acompanyprioritizesthewater-relatedtopicsidentifiedinStep1todevelopalistofmaterialtopicstobereported.Fundamentaltothisstepisassessingthesignificanceoftherisks,opportunities,andimpactsassociatedwiththetopicsidentifiedinStep1.Next,thecompanymustdeterminetheinfluencethatthesetopicsmayhaveonstakeholdersassessmentsanddecisions.Dependingontheirsignificance,topicsareconsideredmaterialregardlessofthecompanysabilitytoeffectivelymanagethem.
Whenassessingthesignificance of the risks, opportunities, and impacts associatedwithaspecificwater-relatedtopictothebusinessitselfandtosustainabledevelopmentgenerally,acompanyasksthefollowingquestions:12
Whatisthelikelihoodandseverityoftheimpacts?
Doesthistopiccompromisethecompanyslicensetooperateinaspecificlocation?
Mightthistrendorconditioneventuallydisruptthecompanysoperationsoritsvaluechain?
Isthereanopportunitytogaincompetitiveadvantagethroughactioninthisarea?
Mightactioninthisareafurtherassureinvestorsandmarketsthatbusinessoperationswillcontinuetobeprofitable?
Doesthistopiccompromisethecompanysabilitytoupholditsownvaluesandethics?
12Formoreguidanceonanalyzingthesignificanceofacompanysimpactsrelatedtoatopic,seetheGRIG4Guidelines(pages3637oftheG4 Implementation Manual).
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25SECTION4DefiningWhattoReport
Whenassessingaspecificwater-relatedtopicsinfluence on stakeholder assessments and decisions,thecompanyproactivelyengageswithstakeholderssothattheycanarticulatetheirinterestsandvalues,theirperceptionsofthecompanysimpactonthatstakeholdergroup,ortheirexpectationsregardingthecompanysresponsetothattopic.13
Aftercompletingthistwofoldanalysis,acompanycanthendeterminewhichspecificwater-relatedtopicsarematerial.ThematrixinFigure5maybeusefultovisuallyrepresentthesignificanceofeachtopic.Acompanyplotswater-relatedtopicsrelativetooneanotherwithrespecttothesignificanceoftherisks,opportunities,andimpactsandtheirinfluenceonstakeholderassessmentsanddecisions.Then,inordertodeterminewhichspecificwater-relatedtopicsarematerial,acompanydefinesthethresholdsandunderlyingcriteria(depictedbytheredlineintheexampleinFigure5)thatrenderatopicmaterial.Topicsthatexceedthesignificancethresholdsetbythecompanyarematerial.Atopicdoesnothavetobehighlysignificantinbothviewpointstobedeemedmaterial.Highsignificancewithinoneviewpointismoreimportantthanconvergencebetweenthedifferentviewpoints.
FiGure 5: Visual Example of Prioritization of Topics
Significance of the risks, opportunities, and impacts
Significance
Infl
uen
ce o
n s
tak
e h
old
er
asse
sssm
ents
an
d d
ecis
ion
s
Onceacompanyhasidentifieditsmaterialwater-relatedtopics,itthendeterminesthelevelofreportingcoverageeachoneshouldreceive.Thisreferstotheprominence,amountofdata,andnarrativeexplanationdisclosedforeachmaterialtopic.
13Formoreguidanceonanalyzingtheinfluenceonstakeholderassessmentsanddecisionsofasustain-abilitytopic,seetheGlobalReportingInitiative(GRI)G4Guidelines(page36oftheG4 Implementation Manual).
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26 Corporate Water Disclosure Guidelines
STEP3:VALIDATINGTHEOUTCOMESOFTHEMATERIALITyASSESSMENT
Inthethirdstep,thecompanyensuresthatthefinalselectionofmaterialwater-relatedtopicsprovidesareasonableandbalancedrepresentationofthecompanyssignificantwater-relatedrisks,opportunities,andimpacts.Todoso,thecompanyassessestheproposedlistofmaterialwater-relatedtopicsagainst:
ScopeAreallsignificantwater-relatedrisks,opportunities,andimpactscovered?
BoundaryHasthecompanyconsideredsignificantrisks,opportunities,andimpactsinentitiesbothwithinthecompanyandthroughoutitsvaluechain?
TimeDoestheselectedinformationcovertheentirereporting period?
STEP4:REVIEW
Asthecompanyispreparingforitsnextreportingandmanagementcycle,itreviewsitsmaterialityassessmentinordertocaptureongoingchangesinglobalwaterchallenges,specificbasinconditions,stakeholderexpectationsandpriorities,andhowandwherethecompanyoperates.
COMMUNICATING THE PROCESS FOR DEFINING WHAT TO REPORT
Providingadescriptionofthematerialityassessmentprocessitselfallowsreaderstobetterunderstandandevaluatewhetherthecompanyismanagingandreportingthemostimportantwater-relatedtopics.Reportingwater-relatedmaterialityassessmentscomprisesthreemaincomponents:
Howimportantwateristothecompany(relativetoothersustainabilitytopics)
Howwater-relatedtopicshavebeenprioritized
Howstakeholderengagementinformedthematerialityassessmentprocess
REPORTINGHOWIMPORTANTWATERISTOTHECOMPANy
ThematrixprovidedinFigure3isausefultoolforillustratingtheimportanceofwatertothebusiness.Thematrixcanbesupplementedbyadescriptionoftheindustrysrelativeexposuretowater-relatedrisks.Itcanalsoprovideadiscussionofanywaterchallengesfacingtheregionsinwhichthecompany(oranyotherentitiesincludedwithinthereportingboundary)hasoperations.
ThematrixinFigure4canalsobeusedtodepictthecompanysoverallmaterialityassessmentforsustainabilitytopicsandtoshowhowimportantwateristothecompanyrelativetoothersustainabilitytopics.14
14SeetheGRIG4Guidelines(page37oftheG4ImplementationManual).
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27SECTION4DefiningWhattoReport
REPORTINGHOWWATER-RELATEDTOPICSHAVEBEENPRIORITIZED
Next,acompanyindicateswhichspecificwater-relatedtopicsweredeemedmaterialandwhichofthosearemostimportant.Todoso,thecompanymaychoosetopublishthematrixshowninFigure4.Thismatrixprovidesavisualrepresentationofhowwater-relatedtopicshavebeenassessedbasedonthesignificanceoftheirrisks,opportunities,andimpacts,andtheirinfluenceonstakeholderassessmentsanddecisions.
Inaddition,thecompanycanprovideatable(foranexampleseeTable2)thatliststhematerialwater-relatedtopics,inorderofreportingpriority,andbrieflydescribe:
1) Thecompanyentities(e.g.,subsidiaries,jointventures)orentitiesinthevaluechain(e.g.,suppliers)thatfacesignificantrisks,opportunities,orimpactsrelatedtothetopic
2) Thegeographicorgeopoliticalarea(s)wherethetopicinquestionismaterial3) Thesignificantrisks,opportunities,andimpactsrelatedtothetopic4) Stakeholdersforwhomthetopicisimportant5) Theextenttowhichthecompanycaninfluencetherisks,opportunities,andimpacts
relatedtothetopic6) Wherethetopicisreported(e.g.,aspecificpageinthecompanyssustainabilityreportor
onitswebsite)
taBle 2: Example of Material Topics List
Material Topic
Company or Value Chain
Entities
Geographic/ Geopolitical
Area(s)
Risks, Opportunities, Impacts Related to
the Topic
Stakeholder Interest
Companys Ability to Influence
Reporting Location
Thoughallmaterialtopicsshouldbereportedregardlessofwhetherthecompanyisactivelymanagingthem,companiesarelikelytoreportmoredetailedinformationfortopicstowhichtheyareactivelyresponding.Forexample,acompanymaydeembothwater scarcityandlimitedmanagementcapacityasmaterialtopics,butbemoreequippedtoaddresswaterscarcity.Inthiscase,thecompanywouldreportbothtopicsasmaterial,butaddresswaterscarcity(anditsassociatedresponses)inmoredetail.TheCorporateWaterManagementMaturityProgression(seeFigure3)isahelpfultoolinidentifyingandcommunicatingwhichtopicsthecompanymaybemostequippedtomanageandreportindetail.Atthesametime,theMaturityProgressionoffersinsightintowhatadditionalmanagementpracticesthecompanycanimplementinthenextreportingcycletobetteraddressmaterialtopicsitiscurrentlynotequippedtomanageandreportrobustly.
Company Information Here
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28 Corporate Water Disclosure Guidelines
Reportingthematerialityassessmentprocessisinherentlylinkedtoreportingsignificant
risks,opportunities,andimpacts,asdescribedintheImplicationsdiscussioninSection5of
theseGuidelines.InSection4,thecompanyreportstheprocessfordeterminingrelevance
andmaterialityandprovidesahigh-leveldescriptionofthesignificantrisks,opportunities,and
impactsrelatedtoeachmaterialtopic.InSection5,thecompanydescribesin detailthenature
ofthesignificantrisks,opportunities,andimpactsidentifiedinthematerialityassessment.
REPORTINGHOWSTAKEHOLDERENGAGEMENTINFORMEDTHEMATE-RIALITyASSESSMENT
Finally,acompanyexplainshowitengagedstakeholderstosupportthemateriality
assessmentprocess.Specifically,thecompanydescribeswhichspecificstakeholdergroups
wereengaged,howthiswasdone(e.g.,throughlocalwaterforums,unsolicitedmessages,
workinggroups,etc.),andwhatthekeyoutcomesofthatengagementwereandhow
thecompanyaddressedthem.Thecompanycanalsoreportthelessonslearnedandthe
stakeholderengagementplanforthenextreportingcycle.
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29SECTION4DefiningWhattoReport
SECTION 5 Detailed Disclosure
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30 Corporate Water Disclosure Guidelines
SECTION 5 Detailed Disclosure
UNDERSTANDING AND LINKING COMPONENTS OF THE FRAMEWORK
ThissectionprovidesguidanceontheDetailedDisclosurepillaroftheDisclosureFramework.Thispillarcomprisesthe11informationareasthatshouldideallybeaddressedinacompanyswaterdisclosure.Theframeworkisnotintendedtoindicatewhatelementsofcorporatewatermanagementanddisclosurearemostimportantortheorderinwhichcompaniesshouldaddressthem.Rather,itoffersawaytocategorizeandunderstandthemanytypesofwater-relatedinformationthatcompaniesreport.
FiGure 6: Corporate Water Disclosure Framework
DETAILED DISCLOSURE
External impacts
Policies, governanceand targets
Current state Implications Response
Def
inin
g W
ha
t to
Rep
or
t
External engagement
Business risks
Performance Internal actions
Compliance
Context
Co
mpa
ny
Wa
ter
Pr
ofi
le
Business opportunities
Linkages across sustainability issues (e.g., food, energy)
Connections between sections and subsections
BASICANDADVANCEDREPORTING
Theguidanceprovidedinthissectionisdividedintobasicandadvancedpractices.Whilebasicpracticeprovidesagoodstartingpointforcompanieswithlimitedexperienceinwatermanagement,advancedpracticerepresentsthefullrangeofinformationthatcompaniesideallyreport.However,somecompanies,dependingontheirsizeandtheimportanceofwatertothebusinessandstakeholders,maynotdeemitnecessaryorvaluabletoimplementthisfullrangeofpractices.
Advancedpracticesareinclusiveofbasicpractices.Inotherwords,advancedreportersdisclosepracticeslistedinbothbasicandadvancedcategories.Somecompanies,particularlySMEsorthoseforwhichwaterisonlymarginallysignificant,mayopttofocusonreportingtheinformationsuggestedforCompanyWaterProfiles(seeSection3),anddisregardbasicandadvancedpracticesaltogether.Infact,somebasicpracticesareincludedasProfileMetricsinSection3:CompanyWaterProfile.Table3summarizesthebasicandadvanceddisclosurepracticesdiscussedinthissection.
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Compilation of Connected
Reporting Tables
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31SECTION5DetailedDisclosure
taBle 3: Summary of Basic and Advanced Reporting Practices
SUBSECTION BASIC ADVANCED
CuRRENT STA
TE
ContextHigh-levelassessmentofbasins
acrossaportfolio
Detailed,location-specificassessmentofbasinswherewaterchallengesarepronounced
High-levelassessmentofbasinsinwhichkeyvaluechainactorsarelocated
Performance
Totalandpercentageofwithdrawalsinwater-stressedorwater-scarceareas
Percentoffacilitiesadheringtorelevantwaterqualitystandards
Averagewaterintensityinwater-stressedorwater-scarceareas(asappropriate)
PercentoffacilitieswithfullyfunctioningWASHservicesforallworkers
Location-specificperformancedata:
- Waterwithdrawalsbysourcetype
- Waterintensity
- Waterconsumption
- Waterdischargebydestinationtype
- Waterperformanceinthevaluechain
Compliance Percentoffacilitieswithawater-
relatedregulatorycomplianceviolation
Adoptionofinternaland/orvoluntarysustainabilitystandards
Water-relatedregulatorycomplianceviolationsinthevaluechain
IMPlICATIONS
Business risksHigh-levelassessmentofrisksata
portfoliolevel
Detailedassessmentofrisksbasedonextensive,location-specificanalysisatthefacilitylevel
Valuechainrisks
Business opportunities
High-levelassessmentofopportunities
Detailedassessmentofopportunities
Valuechainopportunities
External impacts
N/A(legalcomplianceusedasproxy)
Impactsonwateravailability,waterquality,andaccesstowaterresourcesandWASHservices(includinghuman-rights-relatedimpacts)
Prioritizingimpacts
RESPONSE
Policies, governance, and targets
Commitmenttowaterstewardshipandhumanrightstowaterandsanitation
Goalsandtargets
Policies,strategies,andgovernance
Respectingthehumanrightstowaterandsanitation
Internal actions Improvementsindirectoperations Productinnovation
Valuechainprioritization,engagement,andimprovements
External engagement
Participationinglobalinitiatives
Consumer/publicengagementandawarenessbuilding
Policyadvocacy
Place-basedcollectiveaction
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32 Corporate Water Disclosure Guidelines
GEOGRAPHIC/GEOPOLITICALSCALEOFREPORTING
ManyaspectsofDetailedDisclosurecallforcompaniestoreportactions,risks,impacts,etc.,forspecificgeographicorgeopoliticalregions,asopposedtotheirglobaloperations.Forexample,acompanymightreportthatitfaceswater risk duetoineffectivewatergovernanceinaspecificcountry,orperhapsdiscussthewateruseefficiencyofallitsfacilitiesinaspecificriverbasin.Themostappropriateandhelpfulscaleforaregiondependsonavarietyoffactors,includingtheavailabilityofdata,theintendedaudience,andthenatureofthechallengefacedoractionimplemented.Belowisalistgeographicandgeopoliticalscalesatwhichwater-relatedinformationcanbereportedandadescriptionofwheneachmightbemostappropriateanduseful.
River basins.Companiesattimesreportattheriver basinlevelwhenawater-relatedchallengeoractionisinresponsetohydrologicalorenvironmentalissuesthatfaceanentireriverbasin.InAppendixC,wedescribeandprovidealinktoaninteractivedatabasethatofferscommonnomenclatureandboundarydelineationsfortheworldsriverbasins.
Subbasins. Sincewater-relatedchallengescanvarywidelyacrossentireriverbasis,themostinsightfulwater-relatedreportingaggregatesdatabysubbasin.Suchgranularreportingallowsaudiencestounderstandwherespecificallythemostaccuratewater-relatedchallengesareoccurringandhowresponsescanandshouldvaryindifferentpartsofoneriverbasin.
Aquifers. Attimes,water-relatedchallengesandresponsesarefocusedaroundgroundwatersourcesratherthansurface water.Intheseinstances,companiesmaywanttoreportusingaquiferboundariesasopposedtoriverbasins.
Geopolitical. Companiescanalsoreportwater-relatedinformationaroundnationalboundaries.Thisisparticularlysalientwhenwater-relatedchallengesareduetogovernanceissuesorpoliticalconflict.Reportingcanalsobedoneatthestate,province,ormunicipalitylevels.
CONNECTIONSBETWEENSECTIONSANDSUBSECTIONS
Oneofthemostimportantaspectsofeffectivewaterdisclosurerelatestoacompanysabilitytomakeconnectionsamongtheinformationareas(thesectionsandsubsections)withintheDisclosureFramework.Insomeinstancestheconnectionsareinherentandaremadeautomatically.Forinstance,itisnotpossibleforacompanytomeaningfullyconveybusinessrisksoropportunitieswithoutlinkingbacktothecompanyswaterperformanceandoperatingcontext.Inotherinstances,makingtheconnectionsaddsrelevanceandmeaningtotheinformationprovided.Forinstance,responsestrategiesshouldexplicitlyaddressthewater-relatedrisks,impacts,andopportunitiesthecompanyhasidentifiedasmaterial.
Throughoutthissection,tableslabeledConnected Reportingprovideexamplesofhowacompanymightdemonstratehowdifferenttypesofwater-relatedinformationrelatetooneanother.
DETAILED DISCLOSURE
External impacts
Policies, governanceand targets
Current state Implications Response
Def
inin
g W
ha
t to
Rep
or
t
External engagement
Business risks
Performance Internal actions
Compliance
Context
Co
mpa
ny
Wa
ter
Pr
ofi
le
Business opportunities
Linkages across sustainability issues (e.g., food, energy)
Connections between sections and subsections
Click here
Interactive Database of the Worlds River
Basins
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33SECTION5DetailedDisclosure
LINKAGESACROSSSUSTAINABILITyISSUES15
Thoughpracticeinthisareaisquitenascent,companiesalsoendeavortoconsiderandreportthelinkagesbetweenwaterandothersustainabilitytopics,suchasfoodproduction,energyuse,landuse,andclimatechange.Figure5highlightssomeofthesecorelinkages.
FiGure 7: The Water-Energy-Food Nexus
15ResourcesforlearningmoreabouttheseimportantlinkagesincludetheGermangovernmentsWater,Energy,andFoodSecurityResourcePlatform,theWorldEconomicForumsWaterSecurity:TheWater-Energy-Food-ClimateNexusreport,WorldBanksThirstyEnergy,andtheInternationalInstituteforSustainableDevelopmentsreportTheWaterEnergyFoodSecurityNexus:TowardsaPracticalPlanningandDecision-SupportFrameworkforLandscapeInvestmentandRiskManagement.
DETAILED DISCLOSURE
External impacts
Policies, governanceand targets
Current state Implications Response
Def
inin
g W
ha
t to
Rep
or
t
External engagement
Business risks
Performance Internal actions
Compliance
Context
Co
mpa
ny
Wa
ter
Pr
ofi
le
Business opportunities
Linkages across sustainability issues (e.g., food, energy)
Connections between sections and subsections
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34 Corporate Water Disclosure Guidelines
examples of linkages and trade-offs across sustainability issuesLinkagesandtrade-offsacrosssustainabilityissuespotentiallyaffecteachofthethreemajorsectionsofDetailedDisclosure.Examplesofthepossiblewater-relatedlinkagesandtrade-offscompaniescanreport,dependingontheirrelevancetothecompanyanditsstakeholders,areasfollows:
1. Current statethe extent to which water-related challenges contribute to other corporate sustainability issues, including: ThewaterusedtogenerateenergyonwhichthecompanyreliesWastewaterdischargeresultingfromthegenerationofenergyonwhichthecompanyrelies
2. Implicationshow other sustainability challenges may affect the companys ap-proach to water management and corporate risk assessment, including:ThepotentialeffectsofdroughtonacompanysaccesstoenergyThepotentialeffectsoflandusedecisions(e.g.,deforestation,agriculturalpractices)onrunoffandthereforethecompanysaccesstowaterThepotentialeffectsofupstreamagriculturalrunoffonthecompanysaccesstocleanwater
3. Responsethe suitability and value of water-related response strategies (depending on the extent to which they create undesirable trade-offs):TheenergyrequirementsandgreenhousegasemissionsofwastewatertreatmentandwaterrecyclingsystemsThewateruseimplicationsofdifferentcropsandcropvarietiesTheenergyimplicationsofdifferentirrigationoptionsThewateruseimplicationsofalternativeenergysources
Theabovelistrepresentsexamplesoflinkagesthatcompaniesmightreport.Formanycompanies,reportingthisfullrangeoflinkagesisneitherpossiblenorappropriate.
Ataminimum,audiencesshouldunderstandhowwaterisinextricablylinkedtotheseotherchallengesandhowcompaniesmustconsiderwatermanagementinthecontextofothersustainabilityissues.Morerobustreportingmightincludeadescriptionoftheeffectsofsuchlinkagesonwater-relatedbusinessrisksandhowconsiderationsrelatedtosustainabilitytrade-offs16informspecificcorporatestrategies.
16PwCsTotalImpactMeasurementandManagementframeworkincorporatesnonfinancialconsiderationsintobusi-nessdecisionswhilemodelingtheinherenttrade-offsbetweendifferenttechnologiesandmanagementstrategies.
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35SECTION5DetailedDisclosure
ASSESSING THE CURRENT STATE
Thissectiondescribestheinformationthatcompaniescanusetoassessandreportthecurrentstateoftheirwatermanagement.Thisinformationspansthreecategories:context,performance,andcompliance.Unlessclearlynotedotherwise,CurrentStatedatashouldbeconsistentwiththereporting periodoftheoveralldisclosuredocument.Companiesalsoconsiderreportinghistoricdatasoastobuildanunderstandingofhowthesituationhaschangedovertime.Disclosingatleastthreeyearsofhistoricdataisnecessarytoallowdisclosureaudiencestomeaningfullyassesstrends.
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36 Corporate Water Disclosure Guidelines
OVERVIEW
Waterisauniquelycomplicatedresourceforcompaniestomanageandreportbecauseitsvalue,availability,andqualityvarysignificantlydependingonlocation.Acriticalcomponentofthewaterdisclosureprocessisassessingandreportinghowlocation-specificfactorsrelatetothebusinessanditsstakeholders.
Water scarcityandwater stressarethemostcommoncontextualfactorsusedtomeasureacompanyssusceptibilitytowater-relatedbusinessrisksaswellasthelikelihoodofitscreatingnegativeimpactsinaspecificlocation.Thoughavarietyofdefinitionsexist,withinthecontextofcorporatewaterstewardship,17water scarcity referstothevolumetricabundance,orlackthereof,offreshwaterresources.Water stress referstotheability,orlackthereof,tomeetthehumanandecologicaldemandforfreshwater.Stresscomprisesthreeprimarycomponents:availability,quality,andaccessibility.
Thissectionoffersinsightandresourcesforhowacompanycanassesswater-relatedbasinconditionsandreportthedegreetowhichitoperatesinwater-stressedorhigh-riskareas.Italsodescribesavarietyofcontextualfactorsandbasinconditionsthatcanexposeacompanytowater risksorincreasethelikelihoodofnegativeimpacts.
Thetablebelowprovidesasummaryofinformationcollectedandassessedatbasicandadvancedlevelsofdisclosurepractice.EachinformationareadiscussedinSection5featuresatablesimilartotheoneonthenextpage.
CONTENT SCOPE FORMAT
Basic Profile metric: High-levelassessmentof
basinsacrossaportfolioCompanywide
Tabularandnarrative;quantitative
Advanced (includesbasic
reporting)
Detailed,location-specificassessmentofbasinswherewaterchallengesarepronounced
Location-specific Tabular;quantitative
High-levelassessmentofbasinsinwhichkeyvaluechainactorsarelocated
Valuechain Narrative;quantitative
17AspartofthedevelopmentoftheseGuidelines,theMandateSecretariatcollaboratedwithseveralotherorganiza-tionswithexpertiseincorporatewaterstewardshiptodevelopasharedunderstandingofthetermswater scarcity,water stress,water risk,andwater risk for businesswithinthecontextofcorporatewaterstewardship.AppendixBsummarizestheinitialoutcomesofthisongoingcollaborativeprocess.
ConteXt
DETAILED DISCLOSURE
External impacts
Policies, governanceand targets
Current state Implications Response
Def
inin
g W
ha
t to
Rep
or
t
External engagement
Business risks
Performance Internal actions
Compliance
Context
Co
mpa
ny
Wa
ter
Pr
ofi
le
Business opportunities
Linkages across sustainability issues (e.g., food, energy)
Connections between sections and subsections
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37SECTION5DetailedDisclosure
BASIC
High-level assessment of basins across a portfolioBasicreportersassessatahighleveltheextenttowhichtheiroperationsarelocatedinwater-stressedorhigh-riskregions.ThisinformationservesasakeycomponentformanyofthecompanywidemetricsdescribedintheensuingPerformancesection.Suchanassessmentalsohelpscompaniesidentifyandreportwater-relatedhot spotswheresustainablewatermanagementpracticesmaybeprioritized.
Manycompaniesusetheirowninternalknowledgeofthebasinswheretheyoperatetoassesshotspots.Therearealsoanumberofexternaldatasetsthatcanassistcompaniesinthisprocess.Manyareaccessibleandrelevanteventocompanieswithquitelimitedwatermanagementpracticesandwater-relateddata.Somecompaniesmakeuseofthesedatasetstomakethesecalculationsthemselves.Othersusefreeweb-basedtoolsthatusethesedatasetstoconductthesecalculationsforthem;theseinclude
WBCSDGlobalWaterTool
WRIAqueductWaterRiskAtlas
WWF-DEGWaterRiskFilter(QuickView)
WFNWaterFootprintAssessmentTool
Whenreportingonthistopic,companiesshouldindicatethespecifictoolormethodologytheyused.
ForD: sustainaBilitY 2012/13
Ford used the Global Water Tool developed by the World Business Council for Sustainable Development (WBCSD) to evaluate which of our operations are projected to be in water-scarce regions by 2025. According to the analysis, approximately 26 percent of our operations are projected to be in such regions (defined as areas of extreme scarcity or scarcity).
Our facilities in Mexico are located in water-stressed regions; our manufacturing facility in Cuautitlan, Mexico, for example, is already subject to water-withdrawal limitations. Several of our facilities in our Asia Pacific and Africa region are in areas that are currently water-stressed, or are expected to be in the near future.
Click here
Overview of assessment tools
and their underlying methodologies
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ADVANCED
Whereasbasicpracticehelpsdeterminewhichbasinsarehot spots,advancedpracticepertainstotheassessmentofandreportingontheconditionsinspecificbasins,especiallyhotspots,tobetterunderstandwhattypesofresponsestrategiesaremoststrategicforeachlocation.Aspartofthisprocess,companiesconsiderawiderangeoffactorsincludingbutnotlimitedtowaterstressthathavebearingontheirexposuretoriskandlikelihoodtocreatenegativeimpactsinaspecificplace.Advancedreportingonthistopicalsoincludesadiscussionofthebasincontextsinwhichkeyvaluechainactorsoperate.
Detailed, location-specific assessment of basins where water challenges are pronouncedAssessingvariouscontextualfactorsinspecifichotspots
enablescompaniestoformulateanuanceddepictionoftherisksandimpacts
inthoseareasandultimatelytodeterminethemostappropriateandeffectiveresponsestrategies.Reportingonthistopicinvolvestwokeyelements:thedriversandtherelativeseverityofkeywater-relatedchallenges.
DriversAdvanceddisclosersdescribethedriverscontributingtowater-relatedchallengesinthatbasin,potentiallyincluded:
WaterscarcityandwaterstressPoorambientwater qualityRegulatoryuncertaintyInsufficientinfrastructureInadequateaccesstowaterandWASHservicesDroughtFloodingClimatechangeChangingdemographicsLimitedmanagementcapacityEcosystemvulnerabilityTotal basin availabilitySupplyvariabilityCulturalandreligiousvaluesMediaawareness
Click here
Overview of the data-sets and tools that can identify and assess the drivers of water related challenges
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39SECTION5DetailedDisclosure
Severity of challengesInaddition,companiesdescribetheseverityoftheidentifieddrivers.ThistypeofassessmentcanbeconductedusingthedatasetsandtoolsdescribedunderBasicpractice.Additionaltoolsthatinvolveahigherdegreeofsophisticationarealsoavailable,including:
GEMILocalWaterTool
WWF-DEGWaterRiskFilter(FullAssessment)
WFNWaterFootprintAssessmentTool
High-level assessment of basins in which key value chain actors are locatedAdvancedreporterssharecontextualdatarelatedtokeyvaluechainactors,mostcommonlysuppliers.Companiescandescribeahigh-levelcharacterizationoftheextenttowhichbasinsinwhichkeyvaluechainactorsarelocatedarewaterstressedorotherwiseathighriskbyusingoneoftheonlinetoolslistedaboveoracompanysownproprietaryanalysis.
Hess Corporation: 2013 Corporate sustainaBilitY report
Our Seminole Gas Processing (SGP) plant in West Texas is our biggest single water user, accounting for 59 percent of our usage in 2013. The SGP plant uses water mainly for process cooling and sourc-es it from a Hess owned and operated groundwater well field that withdraws from the Ogallala Aquifer.
SGP is located within a region where baseline water stress is categorized as high risk based on evaluations we have conducted using the World Resources Institutes Aque-duct water risk mapping tool. Water demand in the region is driven primarily by agricultur-al uses.
Additional Information is available at the Texas Water Development Board website (www.twdb.texas.gov).
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40 Corporate Water Disclosure Guidelines
perFormanCe
OVERVIEW
Understandingwaterperformance(howmuchwatercompaniesuse,howefficientlytheyuseit,andsoon)helpscompaniesadoptmoresustainablewatermanagementpracticesthatminimizenegativeimpacts(orcreatepositiveimpacts),mitigatewater-relatedbusinessrisks,andcaptureopportunities.Italsoenablesstakeholders tobetterunderstandsuchissuesandtomakedecisionsaccordingly.
Thissectionprovidesguidancetohelpcompaniesdescribetheirwaterperformanceinquantitative,geographicallyexplicittermsthatallowdisclosureaudiencestounderstandhowacompanywithdraws,consumes,anddischargeswaterresources.Itisdesignedtogohandinhandwiththeprevioussectiononcontext.
CONTENT SCOPE FORMAT
Basic
Profile metric: Waterwithdrawalsinwater-stressedorwater-scarceareas
Profile metric: Percentoffacilitiesadheringtorelevantwaterqualitystandards
Profile metric: Averagewaterintensityinwater-stressedorwater-scarceareas(asappropriate)
PercentoffacilitieswithfullyfunctioningWASHservicesforallworkers
Companywide
Tabular;quantitative
Advanced (includesbasicreporting)
Waterwithdrawalsbysourcetype
Waterintensity
Waterconsumption
Waterdischargebydestinationtype
Location-specific
Waterperformanceinthevaluechain Valuechain
DETAILED DISCLOSURE
External impacts
Policies, governanceand targets
Current state Implications Response
Def
inin
g W
ha
t to
Rep
or
t
External engagement
Business risks
Performance Internal actions
Compliance
Context
Co
mpa
ny
Wa
ter
Pr
ofi
le
Business opportunities
Linkages across sustainability issues (e.g., food, energy)
Connections between sections and subsections
Click here
framework to help companies display this information
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41SECTION5DetailedDisclosure
BASIC
Companiesrelativelynewtowaterdisclosureshouldfocusoncollectingandreportingcompanywideperformancedataonwater withdrawalsandwater intensityinwater-stressedareas,theirprovisionofWASHservicesintheirdirectoperations,andtheiradherencetorelevantwater qualitystandards.
Total and percentage of withdrawals located in water-stressed or water-scarce areasCompanywidewaterwithdrawalsareoftenthefirstandonlywatermetricthatcompaniesdisclose.Giventhatwithdrawalswillpresentdifferentrisksandimpactsdependingontheconditionsinwhichtheyoccur,basicdisclosersshouldreportthevolumeandpercentageoftheirwithdrawalsthatoccurinwater-scarceorwater-stressedareas.CompaniescanusetheprocessdescribedaboveintheContextsubsectiontoassesswater scarcityandwater stress.Thesefigurescanprovideadditionalinsightintothecompanysriskwhencomparedwiththeirwaterwithdrawalsoccurringinnon-water-scarceornon-water-stressedareas.Whenable,manycompaniesalsofinditvaluabletoreportwater consumptiondatainadditiontowithdrawalstoprovidefurtherinsightintotheirimpacts.
Percent of facilities adhering to relevant water quality standardsBecausewaterqualityisinformedandinfluencedbyavarietyofparameters(e.g.,BOD,COD,levelsofphosphorousandheavymetals,temperature,etc.),meaningfulquantificationandreportingonthisissueisoftenelusive.Basicreportersmanagethischallengebyreportingthepercentoftheirfacilitiesadheringtooneofthefollowingtypesofwaterqualitystandardsorbenchmarks:
Sector-specificindustrialwastewaterstandard
Internallydevelopedwastewaterqualitystandard
Universalindustrialwastewaterstandard(notyetdeveloped)
Primary,secondary,ortertiarytreatment18
18Wastewatertreatmentisoftencategorizedintothreelevelsofimprovingquality:primary,secondary,andtertiary.TheWorldBankoffersadescriptionoftheselevelsoftreatmenthere.Thisap-proachisoftenhelpfulwhensector-specificorinternallydevelopedstandardsarenotavailable.
BaXter: 2013 sustainaBilitY report
Water issues vary signifi-cantly by location. Baxter used the World Business Council for Sustainable Development (WBCSD) Global Water Tool in 2012 to evaluate the availabil-ity of renewable water resources at Baxters 51 largest water-consuming locations, which repre-sent more than 96% of the companys total water use. Twelve of those sites are lo-cated in water-scarce* ar-eas, 11 in water-stressed* areas and 28 in water-suf-ficient areas.
(Availability of renewable water supplies evaluated using the World Business Council for Sustainable Development Global Water Tool. Water-scarce areas have less than 1,000 cubic meters of renewable wa-ter supply per person per year. Water-stressed areas have at least 1,000 cubic meters but less than 1,700 cubic meters. Water-suf-ficient areas have at least 1,700 cubic meters.)
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42 Corporate Water Disclosure Guidelines
Doingsoallowsdisclosureaudiencestounderstandtheextenttowhichacompanyistakingactiontominimizepollutionrelatedtountreatedorinsufficientlytreatedwastewaterdischargedfromtheirfacilities.
Whenreportingcomplianceagainstaspecificwastewaterstandard,itisessentialthatacompanydescribeswhichparametersareassessedandthethresholdsrequiredtoachievecompliancewitheachparameter.Inthiscontext,complianceisachievedwhenthesethresholdsaremet,regardlessofwhethertreatmentoccursatwastewatertreatmentplantsatthecompanysownfacilitiesoratsharedormunicipaltreatmentplants,solongasthestandardbeingmetisbasedaroundanotionofdonoharm.Forexample,acompanymightreportthat80percentofitsfacilitiesadheretoaninternallydevelopedwastewaterstandard,andthendescribethenatureofthatstandard.
Average water intensity in water-stressed or water-scarce areasCompanywidewaterintensityprovidesinsightintotheefficiencyofacompanyswateruse.Improvementsinintensityovertimeareastrongindicationthatthecompanyistakingmeaningfulstepstoimproveitswatermanagement.Efficiencyismostimportantinwater-scarceandwater-stressedareas,wherecompaniesaremostlikelytofacerisksorcreateimpacts.Companiesshouldthereforereporttheiraveragewaterwithdrawalintensityinwater-stressedareas.
Onewaytoreportintensityisbyusingproduct water intensity (waterwithdrawalperunitof
product).Thisisameaningfulmetricforcompaniesinsectorswithdiscreteproductoutputs
suchasthefood,beverage,orautomobileindustries.However,itisnotasrelevantfor
companieswithdiversifiedproductportfoliosorcompaniesinservice-orientedsectors.These
companiesmaypreferinsteadtousefinancial water intensity (waterwithdrawalperdollar
revenue).
Aswithwaterwithdrawals,dataonwaterintensityinwater-scarceorwater-stressedareas
areparticularlymeaningfulwhenpresentedinconjunctionwiththeintensityofequivalent
facilitiesinnon-water-scarceandnon-water-stressedareas.Somecompaniesfindvaluein
reportingtheirwater consumptionintensityinadditiontotheirwaterwithdrawalintensity.
Percent of facilities with fully functioning WASH services for all workers ProvidingconsistentaccesstoadequateWASHservicesintheworkplace19forallworkersiscriticalinavoidinghumanrightsimpactsandfulfillingthecorporateresponsibilitytorespecthumanrights.Companiescanreportthisissuebyenumeratingthepercentofowned-and-operatedfacilitiesthatofferaccesstofullyfunctioningandconsistentlymaintaineddrinkingwaterandsanitationservicestoallworkers.
19TheWorldBusinessCouncilforSustainableDevelopmentsWASHattheWorkplacewebsiteprovidesavarietyofresourcesthathelpcompaniesensuretheysufficientlyprovideWASHservicesintheiroper-ations.
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43SECTION5DetailedDisclosure
ADVANCED
Companiesatanadvancedlevelofdisclosurepracticeprovideawiderangeoflocation-specificdatathatprovideinsightintotheperformanceofspecificfacilitiesandthecontextsinwhichtheyoperate,aswellasperformanceintheirvaluechain.
location-specific performance dataAdvancedreportersprovideinformationontheirwaterperformanceinspecificgeographiclocations(seeGeographic/geopoliticalscaleofreportingonpage34).Sincemanylargecompanieshavedozens,ifnothundreds,offacilitiesacrosstheworld,companiesmaychoosetoreportdataonlyforthehotspotslistedintheirhigh-levelassessmentofbasins(seeSection5:Context).
intel: 2013 Corporate responsiBilitY report
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44 Corporate Water Disclosure Guidelines
Location-specificperformancedataincludethefollowing:
Water withdrawals by source typeSomeadvanceddisclosersbreakdownwithdrawaldataaccordingtosourcetype,includingsurfacewater,groundwater(renewableandnonrenewable),municipal water,recycled water,runoff,saltwater,andwastewater.Thislevelofdetailcanbeimportant.Forexample,pullingwaterfromanoverdrawnaquiferhassignificantlydifferentconsequencesonlocalwaterstressthandoeswithdrawingwaterfromothersources,suchastheocean.Distinguishingbetweensourcetypesallowsaudiencestobetterunderstandtherisksandimpactsassociatedwithacompanyswaterperformance.
Water intensityIdeally,anadvanceddiscloseralsoprovidesthewater intensityofitsoperationsinspecificbasins.
Water consumption Waterconsumption,inmanycases,generatesgreaternegativeimpactsthanwithdrawals.Forthisreason,anadvanceddiscloserreportsconsumptioninadditiontowithdrawals.
Water discharge by destination typeCompaniesarealsowellservedtoreporttheirwater discharge onalocation-specificbasis.Dischargehastwokeycomponents:quantityandquality.Quantityisimportantbecausecompaniesmustbeable
Click here
How to report advanced context and performance
information
olam: Corporate responsiBilitY & sustainaBilitY report 2013
This year we completed the first water footprint of Olams busi-ness, encompassing our 55 Tier 1 facilities, our own plantations, concessions and farms, as well as our farmer suppliers. The water consumption this year at our 55 Tier 1 facilities was measured as 4.6 million m. Olams company farms and plantations had a water footprint measuring approximately 350 million m, largely from our almond orchards and rice farm.Water consumption last year by Olams farmer suppliers was esti-mated6 at 26.3 billion m per year, comprising 25 billion m of rain-water and 1.3 billion m of surface and ground water. Olams great-est business-related water impacts and risks therefore clearly exist in our upstream supply chain rather than in our direct operations.
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45SECTION5DetailedDisclosure
nike, inC. FY12/13 sustainaBle Business perFormanCe summarY
In FY13, 793 material vendors and contract fac-tories tracked and report-ed their water use and dis-charge to the NIKE Water Program. Of 260 facilities discharging more than 50m3/day in FY13, 48% met NIKE water quality guidelines (which require compliance with all lo-cal regulations and NIKE guidelines, whichever are more stringent), and an-other 47% were compliant with local regulations.
The remaining 5% needed improvement. The higher percentage needing im-provement in FY13 (com-pared with the 1% noted in our FY10/11 report) is due to the expansion of the NIKE Water Program beyond apparel material vendors to include foot-wear materials suppliers for the first time.
toquantifythevolumesofpollutedwaterdischargedtoreceivingbodiesinordertounderstandtheirnegativeimpacts.Manyadvanceddisclosersreportthevolumeofwaterdischargedcompanywideandonalocation-specificbasis.Somebreakdownthedischargedatafurtherbyspecifyingdestinationtype,includinggroundwater,sewers,andsurfacewater.Thislevelofdetailhelpsinterestedaudiencesunderstandthespecificwaterbodiesthatacompanymaybeaffecting.Destination-typedatacanbereportedasapercentageoflocation-specificdischarge.
Qualityisalsoakeycomponentofdischargebutverydifficulttodisclosemeaningfully.Dischargewaterqualityvariessignificantlybyindustry.Forexample,companiesinthefoodandbeveragesectoroftendischargehighlevelsofBOD,COD,nitrogen,andphosphorus.Meanwhile,companiesintheextractivesindustryareusuallymoreconcernedwithparameterssuchastotaldissolvedsolids(TDS)orheavymetals.Advanceddisclosersunderstandtheparametersofconcernintheirindustryandfocustheirwaterqualitydisclosureonthosemetrics,alongwithinformationrel