Toolbox for Setting Enterprise Water Targets

The following toolbox provides resources to aid companies in setting robust enterprise water targets that effectively address local shared water challenges. With these tools, companies can make changes in the ways and places that matter most across their value chains. These are open-source tools with applicability for global portfolios, rather than sector-specific or geographic-specific resources.

This Toolbox is part of Corporate Water Stewardship within Freshwater. Reach out to Sara Walker for more information.

This Toolbox is part of Corporate Water Stewardship within Freshwater. Reach out to Sara Walker for more information.

In response to growing threats to water supplies due to climate change, growing populations, rising water demand and weak governance, many companies are setting enterprise-wide contextual water targets in priority locations across their value chains. However, setting water targets that respond to local contexts has proved challenging for many companies, as water is not an equally material issue across corporate value chains. Impacts and dependencies on water vary by sector and throughout a single enterprise. Environmental, social, governance and economic conditions can also vary widely across catchments.

The following toolbox provides resources to aid companies in setting robust enterprise water targets that effectively address local shared water challenges. With these tools, companies can make changes in the ways and places that matter most across their value chains. These are open-source tools with applicability for global portfolios, rather than sector-specific or geographic-specific resources.

This toolbox follows the approach of Setting Enterprise Water Targets: A Guide for Companies, which outlines three steps:

Step 1: Assess Water Materiality and Prioritize Sections of the Value Chain

Assessing water materiality and prioritizing sections of the value chain ensure that enterprise targets address water-related risks in the places that matter most. Material issues have direct or indirect impacts on an organization’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large. To determine if water is a material issue, companies should evaluate impacts and dependencies on water resources across the value chain. Different sections of the value chain may have different impacts and dependencies, and companies should prioritize those sections for which water is most material to set targets.

Mapping Company Impacts and Dependencies on Water Across the Value Chain

For each section of the value chain, a company can ask two questions to assess water materiality:

• Dependencies on water resources: To what extent is this section of the value chain likely to be affected by water challenges because of its dependencies on water quantity or quality?
• Impacts on water resources: To what extent do the activities in this section of the value chain contribute to shared water challenges?

Water materiality is high in those sections with high dependencies or impacts on water resources.

The following resources, water footprint tools and lifecycle assessments can help companies determine water materiality across their value chains:

EarthStat serves geographic datasets that help solve the challenge of feeding a growing global population while reducing agriculture’s impact on the environment. It includes datasets on cropland and pasture area, greenhouse gas (GHG) emissions, water depletion, nutrient application and other agricultural impacts on the environment, making it a valuable tool for companies looking to assess the water materiality of agricultural operations and supply chains.

ENCORE guides users in understanding how businesses across all sectors rely on nature and shows the risks businesses face when the environment is degraded. ENCORE allows companies to identify the materiality of dependencies on 21 ecosystem services for the production processes of 167 sub-industries. It also identifies the natural capital assets underpinning each ecosystem service and the potential drivers of environmental change that could influence their business performance.

FAOStat provides access to food and agriculture data for over 245 countries and territories and covers all FAO regional groupings from 1961 to the present. With datasets on water access, agricultural production and water resources, and the use of inputs such as fertilizers, the database is another valuable tool for companies to assess water quantity and quality impacts and dependencies as they relate to the agricultural sector.

GeoFootprint combines data from satellite imagery with environmental metrics to visualize and simulate the environmental footprints of key commodity crops on an interactive world map. Granular visibility — down to 10×10 km — allows users to understand the impacts of their sourcing decisions, identify the location-specific factors contributing to their environmental footprint, and model interventions to reduce it.

Global Reporting Initiative’s Standards create a common language for organizations — large or small, private or public — to report on their sustainability impacts in a consistent and credible way. This enhances global comparability and enables organizations to be transparent and accountable. The Standards help organizations understand and disclose their impacts in a way that meets the needs of multiple stakeholders.

Natural Capital Protocol is a framework designed to help generate trusted, credible and actionable information that enables companies to identify, measure and value their impacts and dependencies on natural capital. The protocol builds on approaches that already exist to help businesses measure and value natural capital. It describes how to differentiate between activities and compartmentalize them into different portions of the value chain.

SASB Materiality Map is an interactive tool that allows companies to identify the environmental, social and governance (ESG) topics that are most material to their operations and value chains, as well as most important to investors. SASB Standards identify the subset of ESG issues (including water/wastewater management) most relevant to financial performance in 77 industries, making it a useful tool for businesses to understand material issues that are likely to impact their financial condition or operation performance.

Water Footprint Assessment Manual contains the global standard for “water footprint assessment” developed and maintained by the Water Footprint Network. For companies looking to further assess and understand their water footprints, the manual covers a comprehensive set of definitions and methods for water footprint accounting; shows how water footprints are calculated for individual processes, products and businesses; and includes methods for water footprint sustainability assessment and water footprint response.

Water Footprint Assessment Tool is an online web application that provides clear insight into how water is appropriated for human uses and the impacts resulting from those uses. The tool’s geographic and production assessments assist companies in calculating and mapping water footprints across their operations and supply chains, assessing the sustainability of their footprints in a river basin and identifying strategic actions to improve the sustainability, efficiency and equitability of water use.

WaterStat, the world’s most comprehensive water footprint database, helps companies across a range of sectors assess water impacts and dependencies. All datasets come from peer-reviewed research and are based on the Global Water Footprint Assessment Standard. WaterStat’s datasets include statistics on the water footprints of crops, derived crop products, biofuels, livestock products and industrial products; statistics on international virtual water trade flows; and unique datasets showing global blue water scarcity on a monthly basis.

Step 2: Assess Water-Related Risks and Prioritize Locations

Companies should screen for water-related risks and shared water challenges at each location in the sections of the value chain selected in Step 1. Gaining access to location information outside a company’s direct operations can be challenging. Companies are encouraged to:

• Begin with what is known, such as suppliers with which the company has a direct relationship.
• Focus on what is most important to accelerate action where it matters most, such as by starting high-volume, high-impact or high-expenditure items.
• Engage with actors across the value chain to obtain missing information.
• Leverage what is known to close information gaps, such as through proxy locations or third-party data.
• Consult and engage peer organizations, industry associations or third-party experts.

Screening for Water-Related Risk Across Locations

Water-related risk can originate from company dependencies or impacts on water resources. To determine if water-related risks at a given location have reached a material threshold and should be prioritized for setting targets, a company must first determine:

• Which shared water challenges are the highest threat to a company’s access to needed water resources?
• Which shared water challenges are driven by a company’s impact on water resources?

Existing open-source tools can help by mapping sourcing regions, suppliers, manufacturing facilities and markets against globally comparable information on shared water challenges. Companies may have to conduct internal validation before confirming the high-priority shared water challenges at each location.

Aqueduct Water Risk Atlas, the main tool of World Resources Institute’s Aqueduct platform is a mapping tool that helps companies, investors, governments and other users understand where and how water risks and opportunities are emerging worldwide. The Aqueduct Water Risk Atlas allows companies to assess physical water quality and quantity risks, as well as regulatory and reputational risks that may affect business operations and supply chains in hydrological basins across the globe.

Aqueduct Food is another tool in WRI’s Aqueduct data platform that combines WRI's global data on water risks with agriculture and food security data. This tool illustrates water‐related threats to and opportunities for food security and how these dynamics may develop over time. It is particularly useful for companies with agricultural operations and/or supply chains to assess threats such as water stress and drought risk across locations.

Freshwater Health Index provides a baseline diagnosis of a basin’s health along ecological and social dimensions. It is focused on three main components: ecosystem vitality, ecosystem services, and governance and stakeholders. Each of these components is assessed with a suite of measurable indicators that are aggregated into an overall index that can help companies evaluate water risks across locations.

GEMI Local Water Tool helps companies and organizations evaluate the external impacts, business risks, opportunities and management plans related to water use and discharge at a specific site or operation. The tool helps companies determine which locations face the greatest water risks. It provides a common and consistent visualization platform, as well as interconnectivity between global and local water risk assessments and a uniform approach between site assessments.

GEMStat is a global freshwater quality database that provides companies with scientifically-sound data and information on the state and trend of global inland water quality. The growing database contains millions of entries which monitor chemical, physical and biological water quality parameters for rivers, lakes, reservoirs, wetlands and groundwater systems globally. The water quality status of freshwater bodies worldwide can be visualized through water quality classification maps to facilitate comparisons between locations.

Global database of diffuse riverine nitrogen and phosphorus loads and yields provides a database of calculated non-point nitrogen and phosphorus yields (kg/ha/yr) in 1,421 catchments around world, allowing companies to assess nutrient impacts on water quality at various locations globally. The researchers developed a global model that defines whether particular areas have nutrient concentrations at unacceptable levels in terms of supporting excessive algal growth and specifies whether the limiting nutrient of concern is nitrogen or phosphorus.

Global Environmental Flows Information System (GEMIS) provides information related to environmental flows for current conditions and different Environmental Management Classes (EMCs) of a river system. GEMIS can help companies determine water-stressed regions of the world where rivers do not have enough water to support human and ecological well-being.

Integrated Model to Assess the Global Environment — Global Nutrient Model (IMAGE-GNM) is a global distributed, spatially-explicit model that describes nitrogen and phosphorus delivery to surface water, transport and in-stream retention in rivers, lakes, wetlands and reservoirs. IMAGE-GNM is another useful tool for companies to assess nutrient impacts on water quality across locations and inform which locations to prioritize for target setting.

Water Risk Filter, from the World Wildlife Fund, helps companies prioritize action to address water risks for enhancing business resilience and contributing to a sustainable future. It allows companies to explore physical, regulatory and reputational water risks from now into the future, assess water risks across business operations and supply chains, value how water risk can financially impact a business, and respond to mitigate water risks and enhance resilience.

SWAT+ is a small watershed-to-river basin-scale model to simulate the quality and quantity of surface and groundwater and predict the environmental impact of land use, land management practices and climate change. SWAT+ is widely used in assessing soil erosion prevention and control, non-point source pollution control and regional management in watersheds, and can be used by companies to assess water risks across a portfolio of locations.

Prioritizing Locations by Business Relevance and Exposure to Water-Related Risks

Companies with very large portfolios of locations may benefit from establishing criteria to categorize and group locations based on business relevance and exposure to water-related risks. This process can help distinguish between sites and set water targets of varying ambition and scope across locations. Each company should decide how best to categorize its locations on the basis of its industry, portfolio footprint and geographic distribution. However, it is important to establish criteria that relate to the catchment’s shared water challenges and the company’s dependencies and impacts on water resources.

• Cool Farm Tool’s water use metrics provide crop irrigation requirements and blue and green water footprints, helping businesses assess the water used for crop production, ensure efficiency and evaluate water-related risks. The tool covers virtually all crops and livestock globally, except crops grown in non-soil media (e.g., greenhouses or hydroponically).
• Water Footprint Assessment Manual contains the global standard for “water footprint assessment” developed and maintained by the Water Footprint Network. For companies looking to further assess and develop a robust understanding of their water footprints, the manual covers a comprehensive set of definitions and methods for water footprint accounting; shows how water footprints are calculated for individual processes, products and businesses; and includes methods for water footprint sustainability assessment and water footprint response.
• Water Risk Monetizer is an easy-to-use tool designed to help businesses quantify in monetary terms the water risks related to availability and quality. The Water Risk Monetizer can help businesses understand the full value of water to their operation; identify locations of greatest risk based on water quantity, quality and growth projections; prioritize water conservation and reuse investments based on site-specific water risks; and support the development of a successful corporate water strategy.

Step 3: Set and Disclose Enterprise Water Targets

After screening for water materiality and risks across the value chain and portfolio of locations, companies should set water targets for the sections of the value chain identified in Step 1 to address the water-related risks and shared water challenges at the locations identified in Step 2. This will help water targets deliver both business value through reducing risk and social value through reducing shared water challenges.

Set Targets that Drive Action at the Local Level

There are two main ways that companies can set targets. First, a company can set outcome-oriented targets that specify, either quantitatively or qualitatively, what it aims to achieve. Second, a company can specify the processes it intends to use to reduce risk and address shared water challenges. Both can effectively reduce water-related risk if they drive actions that respond to the local watershed context in ways that are at least proportional to a company’s contributions to the local shared water challenges. When setting enterprise water targets, companies should also assess opportunities to contribute to existing corporate and public sector efforts and collective action initiatives.

The following resources can help companies set enterprise water targets that drive action:

• A global overview of national regulations and standards for drinking-water quality, from the World Health Organization, provides a global overview summarizing information from 104 countries and territories on values specified in national drinking water quality standards. The document includes an assessment of the health risks presented by the various microbial, chemical, radiological and physical contaminants that may be present in drinking water. Where applicable, it derives maximum concentration guideline values for these hazardous constituents. Companies can consult these standards when setting targets for water quality.
• Ecosystem Health Report Cards, developed by The World Wildlife Fund and the University of Maryland’s Center for Environmental Science, assess water quantity and quality; ecological, management and governance; health and nutrition; and economic, social and cultural dimensions of basins around the world. The report cards identify what is most important to the diverse water users in a given basin, create a common understanding of the basin’s health and foster a shared vision for its future.
• Sustainable Development Goal (SDG) 6 on water and sanitation, adopted by United Nations Member States as part of the 2030 Agenda for Sustainable Development, provides a blueprint for ensuring availability and sustainable management of water and sanitation for all. It covers access to drinking water, sanitation and hygiene, water quality and quantity, integrated water resources management and the protection of water-related ecosystems. Enterprise water targets can align with SDG 6 targets and drive meaningful progress toward reaching this goal.
• WaterGAP is a global freshwater model that computes water flows and storages, water withdrawals and consumptive uses on all continents. It is applied to assess the human-freshwater system under the impact of global change and quantifies human use of both groundwater and surface water on all land areas of the Earth. It is a useful tool for companies setting water quantity targets.

Developing Implementation Strategies, Then Measuring and Reporting Progress Toward Targets

Companies should develop an implementation strategy and plan to identify, assign metrics to and secure the required resources to meet their enterprise water targets. Companies should:

• Define and use specific metrics linked to a detailed plan of actions to be taken, with buy-in from internal and external stakeholders.
• Collaborate with other stakeholders to accelerate achievement of desired conditions.
• Deliver co-benefits through water-related interventions that contribute to other priorities, such as economic and social needs or environmental priorities.
• Revisit targets and the implementation strategy periodically to ensure both remain relevant to addressing the most critical challenges.
• Account for and communicate progress toward meeting the targets using credible methods.

The following resources can help companies measure and report progress toward targets:

• Volumetric Water Benefit Accounting: A Method For Implementing and Valuing Water Stewardship Activities provides a common method for assessing the benefits of water stewardship activities in a comparable way, ensuring they address current or projected water challenges and contribute to public policy priorities. This WRI publication empowers companies with a comprehensive, standardized and science-based methodology to calculate and valuate the benefits of water stewardship activities, helping companies measure and report progress toward their targets and thereby enabling businesses to better tackle shared water risks at catchment-scale.

• Alliance for Water Stewardship (AWS) is a global membership collaboration comprising businesses, NGOs and the public sector. Its International Water Stewardship Standard, or AWS Standard, offers a credible, globally-applicable framework for water users to understand their water use and impacts and work collaboratively and transparently with others for sustainable water management. The standard can help companies set and implement targets that lead to improved water governance, sustainable water balance, good water quality, healthy status of important water-related areas and access to water, sanitation and hygiene for all.
• GeoFootprint combines data from satellite imagery with environmental metrics to visualize and simulate the environmental footprints of key commodity crops on an interactive world map. Granular visibility — down to 10×10 km — allows users to understand the impacts of their sourcing decisions, identify the location-specific factors contributing to their environmental footprint and model interventions to reduce it.
• Guide to Water-Related Collective Action focuses on water-related collective action and targets for companies relatively new to external engagement on water issues. The guide supports the internal discussion and analysis needed to define collective action needs and intentions in a manner that leaves the company well-prepared to initiate external-party discussions and collective action activities. When implementing enterprise water targets, companies may use the guide to develop strategies that drive collective action among stakeholders in priority watersheds.
• InVEST Software Platform is a suite of open-source software models that map and value goods and services from nature, allowing companies to balance environmental and economic goals and develop effective implementation strategies. The toolset includes distinct ecosystem service models designed for terrestrial, freshwater, marine and coastal ecosystems, enabling companies to assess quantified tradeoffs associated with alternative management choices and decide how and where to invest in natural capital to ensure that their supply chains are sustainable and secure.
• Restoration Opportunities Optimization Tool (ROOT) is a tool to perform optimization and tradeoff analysis that can help companies develop effective strategies for implementation. It uses information about potential impact of restoration or management change activities together with spatial prioritization or service-shed maps to identify key areas for ecosystem service provision. Multi-objective analysis allows users to consider how to best manage tradeoffs between different project goals.

• Water Risk Monetizer is an easy-to-use tool designed to help businesses quantify in monetary terms the water risks related to availability and quality. The Water Risk Monetizer can help businesses understand the full value of water to their operation; identify locations of greatest risk based on water quantity, quality and growth projections; prioritize water conservation and reuse investments based on site-specific water risks; and support the development of a successful corporate water strategy.

Guidance Documents

Setting Enterprise Water Targets: A Guide for Companies and Setting Site Water Targets Informed by Catchment Context provide useful guidance for companies to set meaningful water targets at the enterprise and site level. This toolbox is mainly directed at companies requiring a robust water target at the enterprise level, particularly those with many sites in their direct operations or broader value chain. Companies can also set targets at the individual site level. Facility-level targets informed by local catchment contexts can complement existing corporate water stewardship efforts and enterprise-level targets.

Guidance and methodologies to set meaningful targets at both enterprise and site level include:

• Setting Enterprise Water Targets: A Guide for Companies introduces a three-step process (along which this toolbox is organized) that companies can follow to set water targets at the enterprise level that address the most material water-related risks in the places that matter the most to their value chain. This publication helps companies do their part to address shared water challenges and focus their efforts in the right high-priority places.
• Setting Site Water Targets Informed by Catchment Context supports companies in setting effective site water targets that are informed by catchment context. This guide introduces three critical elements for setting effective site water targets that 1. align with the priority water challenges within the catchment; 2. reflect the site’s contribution to the water challenge(s) and desired catchment condition(s); and 3. support company efforts to reduce exposure to water risk, capitalize on opportunities and contribute to overall catchment water security.

Case Studies

The following case studies document how companies have applied the above methodologies to set robust enterprise- and site-level water targets:

• Developing Enterprise Water Targets Informed by Local Contexts: Cargill’s Approach: This paper documents how WRI and Cargill implemented Setting Enterprise Water Targets: A Guide for Companies. The guidance serves as a high-level framework with substantial flexibility in how each step is implemented. This case study provides other companies with an example of setting enterprise water targets and a deeper understanding of the importance of enterprise-wide contextual water targets.
• Setting Site Water Targets Informed by Catchment Context: BHP’s Approach: This case study shares BHP’s approach to setting context-based water targets (CBWTs). The study applies three principles for setting site water targets that reflect the catchment context: the targets should be meaningful, site- and catchment-relevant, and risk- and opportunity-based. The paper is not intended as a standalone document, but rather as a practical resource to illustrate how a major resources company is operationalizing these principles to set site-level CBWTs.