Water is the Next Carbon

At every sustainability conference I’ve been attending lately, I keep hearing about the importance of water and even how it trumps carbon.  That’s why this blog post is dedicated to one of our most critical resources.  “Water sustains agriculture and, thus, our food chain. Vast quantities of water are used to make the silicon chips that help power our computers and cell phones. Electric power plants depend heavily on water, and account for a staggering 39 percent of freshwater withdrawals in the United States. It could be said our economy runs on water.” ¹

Demand for water is projected to outstrip supply by a staggering 40 percent by 2030, and an estimated half the world’s population are likely to live in areas of high water stress by the same year.²

Do you know your water footprint?  The table below contains water footprint data for various industry sectors and was obtained from a report published by Ceres/Pacific Institute.¹

blue water footprint is the volume of freshwater that evaporated from the global blue water resources (surface water and ground water). green water footprint is the volume of freshwater evaporated from the global green water resources (rainwater stored in the soil as soil moisture). grey water footprint is the volume of polluted water, calculated as the volume of water that is required to dilute pollutants to such an extent that the quality of the water remains above agreed water quality standards Source: Ceres/Pacific Institute, “Water Scarcity and Climate Change, Growing Risk for Business and Investors,” 2009.

Do you have the tools for a water assessment?  The Ceres Aqua Gauge is designed to enable investors and companies to better understand water risks and the practices used to manage them. The Aqua Gauge can benefit a range of decision-makers across the investment value chain.

Specifically, it can help with:

• Self-assessment and strategy development
• Investor communications and engagement
• Supplier and industry engagement

Actions to Take Now

1. Perform a water risk assessment
2. Utilize the Ceres Aqua Gauge Tools
3. Develop a water strategy
4. Participate in the Carbon Disclosure Project (CDP) Water Project

References:

1. CERES/Pacific Institute, “Water Scarcity and Climate Change, Growing Risk for Business and Investors,” 2009. http://www.pacinst.org/reports/business_water_climate/full_report.pdf
2. CDP Water Disclosure https://www.cdproject.net/water
3. CDP Water Disclosure Global Report 2011 https://www.cdproject.net/CDPResults/CDP-Water-Disclosure-Global-Report-2011.pdf
4. Ceres Aqua Gauge http://www.ceres.org/issues/water/aqua-gauge/aqua-gauge
5. US EPA WaterSense http://www.epa.gov/watersense/index.html
6. Water Footprint Network http://www.waterfootprint.org/?page=files/home

EORM was among many companies in attendance at the recent 2012 GreenBiz Forum in San Francisco, CA.  The event “bring[s] together thought leaders and sustainability executives to define the trends, challenges and opportunities in sustainable business today.”  Here are five important messages about sustainability strategies from the industry experts’ presentations.

• There is still low-hanging fruit out there to be captured through resource efficiency in energy, carbon, materials, water and waste.  Resource inefficiencies allow for risk mitigation, cost reduction, and revenue growth.
• Vocabulary is important.  Sustainability messages should relate to the appropriate audience.   For example, if your executive team doesn’t relate to climate change, your programs should focus on the energy efficiency ROI benefits of climate mitigation instead.
• Employees are typically an untapped resource that should be used to drive innovation.  Many companies are trying a bottom-up approach and are engaging their employees on the sustainability conversation through contests, green teams, and award programs.
• Sustainability goals should be long-term and far-reaching.  One example of an ambitious sustainability goal is Adobe’s net zero goal.  The company achieved net zero through four steps: managing what it measures, reducing demand for electricity, investing in on site generation, and purchasing energy and carbon offsets.
• Sustainability goals should guide a company towards progress and don’t necessarily need to have a specific road map developed before adopting the goal.  Goals can be used as a sustainability compass and the path forward can be worked out over time.

Corporate sustainability is the balance between environmental, social and economic components in business decisions and has now become an expectation of customers, shareholders, employees, NGOs and other corporate stakeholders in most businesses.  Corporations that have implemented a robust sustainability program have seen benefits such as improved stakeholder perception, increased innovation, realized efficiencies and reduced business risk.

Most large, public companies have very mature sustainability programs and are further ahead of their suppliers with many moving beyond evaluation of their own operations by driving sustainability into their supply chains.  They accomplish this through publishing “Supplier Codes of Conduct”, distributing sustainability questionnaires, conducting supplier audits, establishing goals for suppliers and developing industry associations such as the Pharmaceutical Supply Chain Initiative (PSCI), Electronic Industry Citizenship Coalition (EICC), and International Council of Chemical Associations’ (ICCA) Responsible Care Initiative.

In order to meet customers’ growing sustainability demands, suppliers need to develop a sustainability strategy or risk losing business.  Two examples of customers with sustainability demands are Johnson & Johnson and Dell.  Suppliers to Johnson & Johnson need to publicly report at least two sustainability goals as part of the Company’s Healthy Future 2015[1] goals and Dell encourages all Tier 1 suppliers to publish a corporate responsibility report[2].

Strategy Best Practices

Successful sustainability strategies have leadership and structure.  An effective sustainability strategy should have global reach, focus on areas with the highest risk or greatest impacts and consider the environmental and social concerns throughout the organization.  Because of the wide reach of sustainability, it is critical to obtain executive and management support for the work to ensure effective cross-company integration, appropriate resource allocation and development of necessary budgets.  Research has shown that sustainability programs are both top-down and bottom-up developed, but that the most effective programs have top management accepting accountability for its success[3].

EORM’s Five Step Approach to Sustainability Strategy

EORM has found that a five step approach to developing a sustainability strategy can be effective.  The first step involves defining what is important to the company from an environmental, social, and economic standpoint.  One way this can be done is through engaging internal sustainability stakeholders in a conversation about why sustainability is important to the company.  The second step is to conduct an external assessment to analyze the competitive landscape and determine stakeholder interests to ensure the strategy addresses the appropriate market position on sustainability and meets stakeholder expectations.  The next step involves an internal assessment to audit the company’s current sustainability programs, policies, committees, and initiatives to take advantage of successful programs already in place and learn from failed initiatives.  The internal assessment will also help provide an estimate of baseline environmental and social impacts and risks.  The fourth step is to determine key targets and identify gaps.  Key targets should align with the findings from the internal and external assessment and address gaps between the current and desired state of sustainability.  The final step is to determine how the strategy will reach its key targets through the appropriate supporting structure and establishing roles and responsibilities.  Example steps in this phase include establishing a sustainability vision, policy, committee, and five-year work plan and obtaining executive buy-in.

EORM’s Five Step Approach to Sustainability Strategy

While searching for gifts for my family and friends, I stumbled across many great guides for having a green holiday.  Check them out here.  Happy Holidays!

• Reduce your holiday environmental footprint with these green guides.  One great tip is where to find tree recycling locations at Earth911
• Sierra Club’s Green Holiday Tips
• Natural Resources Defense Council Green Holiday Guide
• Give green gifts with these gift guides.   Check out the biodegradable watch in the green geeks section of the Tree Hugger one!
• Tree Hugger’s 2011 Green Gift Guide
• The Daily Green Gifts for Every Occasion
• Volunteer and donate.  There are lots of local organizations that can use an extra hand this time of year.  Here are some ideas to consider:
• Find a local food bank at Feeding America
• Donate to families in need in California at Family Giving Tree 
• Donate toys to needy children at Toys for Tots

Supply chain responsibility is gaining momentum. According to a recent Carbon Trust Advisory study on addressing carbon in global supply chains, half of multinationals will choose suppliers based on carbon emissions and 29% of suppliers are likely to lose their places on green supply chains if they do not have adequate performance records on carbon. The study also found that 40% of multinationals are currently addressing their indirect carbon emissions (supply chain), compared to 93% for direct emissions. Among the companies not addressing supply chain emissions, 42% said they would do so within the next year, and another 42% within the next two to three years.

How can you measure your supply chain emissions?  – On October 4, 2011, the GHG Protocol unveiled the Corporate Value Chain (scope 3) Standard in an effort to provide internationally agreed-upon approaches for companies to measure and report their supply chain emissions.  The Standard was developed with input from business leaders, NGOs, academics, and policymakers.

Resources

Carbon Trust Advisory study

GHG Protocol Corporate Value Chain (Scope 3) Standard

The California Transparency in Supply Chains Act (SB 657) is California’s law to require disclosure by large manufacturers and retailers of their efforts to abolish slavery and human trafficking in their supply chain. This act goes into effect on January 1, 2012.

Who is impacted?
Around 3,200 companies will be impacted by the act which is applicable to companies that:

• File their California taxes as a retailer or manufacturer.
• Do business in California as defined in the California Revenue and Taxation Code.
• Earn more than $100 million in worldwide gross receipts.

A National Trend?
California tends to lead the way with sustainability regulations which other states typically adopt soon after. Organizations from other states that take steps today to understand and comply will be better prepared.

What is required?
Companies need to disclose to “what extent, if any” they engage in the five activities:

• Verification – Engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery. The disclosure shall specify if the verification was not conducted by a third party.
• Auditing – Conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains. The disclosure shall specify if the verification was not an independent, unannounced audit.
• Certification – Requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business.
• Internal Accountability – Maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking.
• Training – Provides company employees and management, who have direct responsibility for supply chain management, training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.

Resources

California Transparency in Supply Chains Act (SB 657) Legislation

“Complying with The California Transparency in Supply Chains Act,” published in the August 2011 issue of Compliance & Ethics Professional