What is water footprinting, and why should it be an ESG priority?

As organizations embrace the ESG imperative, water footprinting is a term that’s creeping into the corporate consciousness. Positive environmental action demands that your approach embraces all aspects of sustainability, exploring areas that may have historically been lower-profile than, say, carbon footprints and greenhouse gas emissions.

Water footprinting is one of these areas.

What is water footprinting?

As with a carbon footprint, every individual and business will have a water footprint. Everything we consume, manufacture, use, buy or sell will use water in the process. Water usage can vary enormously between sectors. When looking at which industry has the highest water footprint, the paint and coating manufacturing industry was the most water-intensive industrial sector in the US in 2020, using 123 gallons per dollar output. Famously, it takes nearly 2000 gallons of water to make one pair of jeans.

The water footprint, or water footprinting, is the process of measuring the amount of water used to produce the goods and services we use. You can measure your business’s water footprint for a specific process or product. You can also measure your entire organization’s water footprint — even an entire country’s or continent’s.

Why does your water footprint matter?

Businesses worldwide are accepting their responsibilities around sustainability and environmental impact. ESG is fast becoming “the way we do things” rather than an overlay or afterthought; it’s expected that reputable businesses take steps to minimize their corporate footprint — and your water footprint is an intrinsic element of that.

Activities and processes vary hugely in the amount of water they use. The process to produce one kilogram of beef requires approximately 15,000 liters of water, for example, while a 150-gram soy burger produced in the Netherlands takes about 160 liters.

And your accountability on water footprinting doesn’t end with your own operations. Understanding the water footprint of your supply chain is also vital — sometimes referred to as “direct” and “indirect” water use. A large percentage of your water footprint might exist beyond your corporate — or even country — borders. About 10% of the Chinese water footprint, for instance, falls outside China.

With shareholders becoming more activist over ESG issues, your ESG policy must be as comprehensive as it can be. This means that calculating your water footprint is an essential element of a fully-rounded approach to ESG.

Calculating your business water footprint enables you to identify where your operations or supply chain are dependent on water and to what extent.

The green, blue and grey water footprints

There are three water footprints: green, blue and grey. What makes a blue, green or grey water footprint?

• The green water footprint is water from precipitation. It is stored in the root zone of the soil and is evaporated, transpired or incorporated by plants. It is most relevant to the horticultural, agricultural and forestry industries.
• The blue water footprint is surface water or groundwater water that is consumed by — in other words, evaporated or incorporated into a crop — during the cultivation process.
• The grey water footprint is the fresh water needed to bring water that has been polluted up to safe water quality standards.

Measuring these footprints will give an organization a comprehensive picture of its overall water footprint.

How to calculate your water footprint?

In recent years, organizations have become accustomed to measuring their carbon footprints to comply with global carbon emissions legislation. Carbon footprints, though, can be easier to calculate than water footprints. Because water is a resource rather than an emission, issues such as supply and scarcity must be taken into account to put water footprint into context.

Steps in Calculating a Water Footprint

Step 1: Calculate how much water is used to produce a product or service in your supply chain

Step 2: Carry out an impact assessment. What does it mean to use this amount of water? In the context of local supply and demand, what impact does it have? Using a liter of water in an area where clean water is at a premium will have more impact than doing the same in an area where it is freely available. This second step can be contentious. Whereas there is a set methodology for calculating carbon emissions, the ways that water impact is measured can be more subjective.

Different methods for calculating water footprint

When calculating your water footprint, it’s important to carry out a life-cycle assessment (LCA) — a systematic and phased approach to the use of water throughout the life-cycle of the processes, products or services you provide.

Within this, there are two accepted methods for calculating a water footprint: midpoint methods and endpoint methods. Midpoint methods measure impact, while endpoint methods go a step further and include an indicator that measures the damage done via an individual or organization’s actions.

Midpoint methods

Different midpoint methods for measuring water footprints use different scarcity equations — the calculation used to define how rare a commodity water is. The two main scarcity equations used are:

• Withdrawal to availability (WTA) ratio: How much water is withdrawn locally via industrial processes compared to how much is available
• Consumption to availability (CTA) ratio: As above, but includes only water that is totally removed from the water source as a result of the process (as opposed to water temporarily removed and then returned)

The endpoint method

Similarly, different endpoint methods for calculating water footprints use different scarcity equations when evaluating how much damage has been done. Some methods focus only on the impact on human health, while others also consider the impact on ecosystems and other resources.

International standard on water footprinting

In 2014, the ISO published ISO 14046: Water footprint: Principles, requirements, and Guidelines. The international standard sets out principles and requirements for calculating a water footprint and is a helpful reference for any organization starting its water footprinting journey.

Water footprinting made simple

Water footprints are growing more critical as organizations widen the scope of their ESG strategies. Robust data and reporting are as crucial for water footprints as carbon ones.

With water consumption, not just an ESG indicator, but a substantial cost for many businesses, there are significant benefits to calculating and taking steps to reduce your water footprint.

To do this successfully, you need accurate and clear dashboards that show water consumption in a granular and comprehensive way.

Trend analysis can help you determine how your water footprint is evolving and, if needed, build a business case for investment in water use reduction strategies and technologies. Top-level aggregation — to engage senior leadership with “big picture” water footprint data — combined with the ability to drill down into the detail, is vital. With water footprinting potentially more complex than other ESG measures, it’s essential that your users have an intuitive experience.

The best water footprinting solutions deliver alerts if there are gaps in your data sources, prompting action where needed, with audit-standard reporting instantly available.

Take the next step to conquer water footprinting as part of your strategy to set, monitor and achieve your ESG goals. Find out more about the ways Diligent’s Modern ESG approach can help.