January 30, 2013

“At the beginning of the twenty-first century, the Earth, with its diverse and abundant life forms, including over six billion humans, is facing a serious water crisis. All the signs suggest that it is getting worse and will continue to do so, unless corrective action is taken. This crisis is one of water governance, essentially caused by the ways in which we mismanage water”


Thus begins a recent UN report titled, “Water for People, Water for Life”. It describes the impending global water crisis as one the biggest crises that mankind will face in the next century. “Of all the social and natural crises we humans face, the water crisis is the one that lies at the heart of our survival and that of our planet Earth,” UNESCO Director General Koichiro Matsuura, whose agency hosted the study, says.


“No region will be spared from the impact of this crisis, which touches every facet of life from the health of children to the ability of nations to secure food for their citizens. Water supplies are falling while the demand is dramatically growing at an unsustainable rate. Over the next 20 years, the average supply of water worldwide per person is expected to drop by a third.”


The global water crisis is a real and immediate threat to all of us, and improving the way we manage our water supplies will only become more daunting over time given the combined pressures of rapid population growth, increasing demand, and the uncertainty inherent to climate change. The water crisis can only be averted through the concentrated efforts of all sectors to conserve water.

The Water Footprint

The concept of the water footprint was borne out of the need to conserve water. It has garnered international support from major companies, policymakers, NGOs and scientists as an important step toward solving the world’s ever increasing water problems.


Professor Arjen Y. Hoekstra, the creator of the water footprint concept says,“The interest in the water footprint is rooted in the recognition that the human impact on freshwater systems can ultimately be linked to human consumption, and that issues like water shortages and pollution can be better understood and addressed by considering production and supply chains as a whole”. “Water problems are often closely tied to the structure of the global economy”, he adds. “Not only governments, but also consumers, businesses and civil society communities can play a role in achieving a better management of water resources.”




Water Footprint and Businesses

The Water Footprint Network defines the corporate water footprint as the total volume of fresh water used directly and indirectly to run and support a business.


The water footprint of a business consists of two components:

  • The supply chain water footprint, which is the water used in a company’s own supply chain.

  • The operational water footprint, which is the water used by a business for production or manufacturing purposes and for supporting activities.

There is a growing clamour among the business community saying that ‘water is the new carbon’ in response to a heightened awareness that resources such as water are more critical and valuable to a company’ s operation and brand value than previously assumed. The issue with water is not really one of cost, although this will likely change as we begin to value water according to use and need, but instead has to do with a company’s license to operate and its supply chain. While water is a global issue, it is addressed locally in the communities in which companies operate. If a company mismanages a local water resource and negatively impacts a community, a flurry of negative press articles will quickly follow; this in turn, will create operational interruptions and erode brand value.


Considering and mitigating the water footprint of businesses is a way to reduce risk.

  • Physical risk: companies may increasingly face freshwater shortage in their supply chain or own operations.

  • Reputational risk: the corporate image of a company will be damaged when questions arise among the public about whether the company properly addresses issues of sustainable and equitable water use.

  • Regulatory risk: governmental interference and regulation in the area of water use will undoubtedly increase.

  • Financial risk: the above risks may translate into increased costs and/or reduced revenues.

The Coca Cola Company is the best example of a corporate leading the way on developing a “water footprint assessment” methodology through active participation in the Water Footprint Network. According to Coca Cola,  Water footprinting is helping it refine its approach to global water stewardship. The pilot studies have verified the importance of examining direct and indirect water use separately. The company is focusing first on operational water use by taking action to use water more efficiently and treat all manufacturing wastewater.

Cemex, one of the world’s largest building materials suppliers and cement producers, is another top company which is taking steps to mitigate its water footprint. The company has  developed a methodology to standardize water measurement and management across all of the company’s operations as it aims to minimize its water footprint and increase efficiency. The company will focus initially on measuring its footprint, and secondly on defining actions to increase its water efficiency and reduce its water use

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