Two new reports from nonprofit advocacy organizations highlight global water risks and urge food and beverage companies to adopt more robust water stewardship practices at every point in the supply chain.
Published by Ceres, Feeding Ourselves Thirsty: How the Food Sector Is Managing Global Water Risks “ranks the nation’s 37 largest food companies on how effectively they are managing precious freshwater supplies.” Finding that packaged food and beverage companies outperformed the agricultural sector in their responses to water risks, the report estimates that “only 30 percent of the companies considered water risks as part of major business planning and investment decision-making,” while only 16 percent “have sustainable agriculture policies that address water.”
To help companies improve water efficiency, Ceres recommends, among other things, that global companies (i) analyze water risks for the entire supply chain, (ii) invest in projects that improve watershed health and (iii) disclose water risks and management plans to investors and other stakeholders. The report also calls on investors to evaluate corporate water risk “in terms of water dependence, security and response.”
As Ceres notes, “While most companies in the food sector are not directly involved in agricultural production, many are significantly exposed to agricultural water risks through their suppliers… [C]onsider that risk exposure is shaped by several factors, including the primary agricultural commodities the company buys, the level of water dependence and security associated with those commodities, as well as the sourcing model used by the company to procure agricultural inputs.”
Meanwhile, the World Wide Fund for Nature in the United Kingdom (WWF-UK) has released its own water-risk assessment, concluding that “many businesses don’t assess their water risk[s], let alone mitigate against them.” Titled From Risk to Resilience: Does Your Business Know Its Water Risk?, the study examines how companies approach “the management of the catchments in which they operate or source products from, both domestically and internationally.” According to WWF-UK, more than 80 percent by value of UK imports “have a ‘moderate’ level of water risk when risk is averaged across all sourcing countries,” and approximately 40 percent by value “come from countries that have hotspots of high water risk,” including China, the United States, Italy and Spain.
Offering recommendations for industry, government and investors, the report singles out the beverage sector for its approach to waterintensive supply chains. “Build ‘buy-in’ across the company on the business case for water stewardship,” states WWF-UK. “Ensure the company is complying with legislation, and implementing best practices related to water management. Without showing leadership with the aspects of water under the company’s direct control, there will be a lack of credibility when engaging in the more challenging aspects of water stewardship including with suppliers.”