Can sustainability standards help agricultural companies tackle water risk?
Water risk is an issue that faces many agricultural supply chains and one that has risen up the corporate agenda in recent years. Along with warnings from the World Economic Forum about the impact of water crises on the global economy and companies disclosing huge water-related losses to CDP, consumers are also increasingly demanding that their products are safe and sustainable for people and the planet.
In response, retailers as well as food and beverage companies are responding with sustainable supply chain commitments to ensure their inputs are responsibly sourced. Such commitments are often implemented through agricultural sustainability standards. However, the extent to which these various standards cover water — let alone the many facets of water (quality, quantity, governance, ecosystems, etc.) — varies considerably.
In 2015, WWF issued a report on this very issue. Entitled “Strengthening water stewardship in agricultural sustainability standards: framing collaborative solutions to mitigate water risks”, the report reviewed over twenty different standards to assess coverage of various water stewardship issues. Fast forward two years and we have decided to revisit the report. The reason: our experience along with data gathered by CDP, Ecolab and GreenBiz all point to the same general conclusion — not enough companies are doing nearly enough.
1) In 2016, CDP reported that while the previous two years had seen an increase in the number of companies engaged in water disclosure and mapping water risk via tools like the Water Risk Filter, for the vast majority of companies, water risk continued to be a blind spot. Revisiting the report lets us re-issue our call to action.
2) These findings are mirrored by those from Ecolab and GreenBiz, which just last week released survey results (below) indicating that while 47% of consumer goods companies ranked water as their top issue, for 67% of retailers, water was their lowest priority. Revisiting the report with Edeka — Germany’s largest retailer — as a partner is a powerful call to action for the sector.
3) Even for those companies that do recognize the importance of water and are doing something about it, the majority of the responses still tend to be inwardly focused on water use efficiency and minimizing effluent discharge. While important, they are an insufficient response to address impacts and do not even touch upon dependencies. Revisiting the report allows us to remind companies that response goes beyond mitigating impacts.
4) Through Ceres’ Feeding Ourselves Thirsty and our combined efforts on the AgWater Challenge, it is evident that corporate commitments and actions are not accounting for context and dependencies to anything like the extent required. Moreover, the bilateral conversations we had with people during AgWater made it evident that companies were applying agricultural standards thinking they covered issues that they actually did not. For example, many companies believed organic standards addressed water scarcity issues when they don’t. Revisiting the report lets us clarify these misunderstandings.
5) Our own experience in working with data on risk exposure versus risk response in the Water Risk Filter (which has informed a new risk mitigation tool coming in January 2018) has reinforced the belief that mitigation responses must be tailored to the specific water risk profile facing a given site. One-size-fits-all approaches rarely work when it comes to water.
6) Finally, drawing from the 2015 report — which was specifically intended to help strengthen the water stewardship criteria of agricultural sustainability standards — WWF has been an active advocate for improvements in the standard systems. Accordingly, for those standards that had revised their systems, we were interested to see how they had improved over the past 2 years.
The updated report reviews the coverage of some 25 different agricultural sustainability standards, including flagging where there is robust coverage as well as where there are gaps. It also highlights not only where standards have improved, but also some of the best examples from across all of the standards in an effort to collate “best practices”. By combining a water risk assessment, which highlights what you ought to consider paying attention to when it comes to water, with the report’s findings, it enables companies to understand whether a given agricultural sustainability standard is capable of addressing a given grower’s unique water risk circumstances or not. And if not, it provides a list of the action areas needed to tackle the gaps.
The report, released October 31st at the Alliance for Water Stewardship’s (AWS) Forum as it is in keeping with AWS’s mission. Water stewardship is not only about addressing site-level actions, but also about engaging others in the catchment to address shared water challenges. In addition, WWF believes that AWS has a unique opportunity to harness the information to complement other agricultural sustainability standards — to “plug the gaps” and ensure rigorous water stewardship coverage. Indeed, we will be hosting a session on this exact topic at this year’s event.
Standards are a powerful mechanism to drive sustainability requirements in agricultural supply chains and this is true for water as well. As we work with retail partners like Edeka (but also other AWS members like M&S and Woolworths), we must ensure that selected approaches are fit for purpose (and where not, fill the gaps). Ultimately, water stewardship is not only the only way to ensure shareholder value preservation (and creation), it is also the best way for companies to help ensure that our shared freshwater basins provide an opportunity for both nature and humans to thrive.
