Water Footprint Assessment – Helping businesses to understand water related risks and opportunities

Posted on September 22, 2011 by

Freshwater is the oil of 21st century and emerging as the next great challenge for the world’s businesses, governments and communities. There is enough freshwater available on the planet for current population of the world but it is distributed unevenly and that is the reason behind water stress and water scarcity in some regions of the world.

Businesses need to manage their water consumption thoroughly. Industries like paper and pulp dairy, beverage and power are particularly exposed to water risk because of its dependence on large quantities of water for production. The water sector is entering a period of unprecedented change and now is the time to reinvent business models, embrace new technology, and develop the solutions to the world’s water issues.

Businesses need to mitigate water risks in five major areas so that they can reduce negative impacts associated with water risks.

Water risks in five major areas

Understanding water footprint

The Water footprint of a business is defined as the total volume of freshwater that is used directly or indirectly to run and support the business. Business water accounting is increasingly regarded as an essential part of sustainable corporate performance accounting. As per the Water Footprint Organization (WFO), the water footprint helps to show the link that exists between our daily consumption of goods and the problems of water depletion and pollution that exist elsewhere, in the regions where our goods are produced. Nearly every product has a smaller or larger water footprint, which is of interest for both consumers that buy those products and businesses that produce, process, trade or sell those products in some stage of their supply chain. As per WFO estimates, the water footprint of Indian consumption was 987 billion m3/yr in the period 1997-2001, which means 980 m3/yr per capita.

The water footprint of a businessThe water footprint of a business  

The WF of a business unit consists of two parts- the operational water footprint and the supply-chain water footprint.

Operational water footprint: The operational water footprint is the amount of freshwater used at a specific business unit, i.e. the direct freshwater use.

Supply-chain water footprint: The supply-chain water footprint is the amount of freshwater used to produce all the goods and services that form the input of production at the specific business unit, i.e. the indirect freshwater use.

Types of water footprint

Types of water footprint can be categorized in blue, green and grey water footprint. These categories help to compare different water use patterns in the organization.

  • The blue water footprint: The blue water footprint refers to consumption of blue water resources (surface and groundwater) to produce the goods and services. ‘Consumption’ refers to loss of water from the available ground-surface water body in a catchment area. Losses occur when water evaporates, returns to another catchment area or the sea or is incorporated into a product.Types of water footprint
  • The green water footprint: The green water footprint refers to consumption of green water resources (rainwater stored in the soil as soil moisture) to produce the goods and services. This is mainly relevant for agricultural products (e.g. crops or trees), where it refers to the total rainwater evapotranspiration during crop growth (from fields and plants).
  • The grey water footprint: The green water footprint refers to pollution and is defined as the volume of freshwater that is required to assimilate the load of pollutants given natural background concentrations and existing ambient water quality standards.

Water footprint assessment methodology

There are standards and guidelines available to assess water footprint of the business and products. Presently following standards are majorly in use – The water footprint assessment manual, Alliance for water stewardship, Aquawareness, The CEO water mandate, Water neutral, ISO 14046 (It is currently under development), Global water tool by WBCSD and GEMI are currently available in the market for water footprint assessment.

With growing water crisis, companies need to assess to what extent they, and their suppliers, depend on water and how they can best manage the required processes and infrastructure. Following schematic shows how can an organization assess its water impacts and plan to mitigate it.

Most companies in India are not yet strategically managing water resources and have only undertaken temporary initiatives related to water use with apparently limited understanding of water’s materiality to business models. However, leading global players are undertaking initiatives to improve the efficiency of their operations like Diageo, SABMiller, Nestlé, Guinness Anchor Berhad and Carlsberg.

The first step towards managing water is to measure it because in business what gets measured gets managed. Analysing risk and opportunities associated with water allows organization to assess water related risks and opportunities driven by crucial natural resource i.e. water. Water footprint assessment is a tool to analyse it and also help to assess significant social and environmental impacts associated with water scarcity and its ability to manage those impacts.

Know more about Earth’s water distribution and Indian scenario

Know more about Water audit


UN Water, Business water footprint accounting – WFN, Responsible Investors

Posted in: Water