Water Risk Issues Approach Boiling Point

It’s no secret that the agriculture and food production industries require vast amounts of water to remain viable. That prompted Ceres, a nonprofit sustainability group, to research and release findings on water risk, dependence and security

benchmarks for 37 major food companies. The report, “Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks,” was published May 7.

According to the report, 70% of the world’s freshwater is used to irrigate crops and raise animals. Currently, one-third of total food production is in areas of high or extremely high water stress, or competition. The report also identifies five important “water risk drivers” that affect the current state of water security in the food sector.

1. Growing competition for water
2. Weak regulation
3. Aging and inadequate water infrastructure
4. Water pollution
5. Climate change

The report also scores food sector companies based on four categories, including how they manage water risk, direct operations, manufacturing supply chain and agricultural supply chain. Companies were scored on a 0-100 point scale based on information that includes company financial statements, corporate sustainability reports and 2014 CDP water survey responses.

The group’s findings? “While a small number of companies are taking wide-ranging actions to manage water risks across their operations and supply chains, most have a long way to go,” according to the report.

Companies with the highest scores include Unilever (70), Coca-Cola (67), Nestle (64), PepsiCo (55) and Kellogg (54). However, 11 of the 37 companies scored 10 or below.

The report lays down five recommendations for companies to improve water sustainability efforts in their operations:

1. Increase board oversight and understanding of material water risks.
2. Conduct robust water risk analysis.
3. Address watershed-level risks.
4. Tackle water risks and impacts in agricultural supply chains.
5. Improve disclosure.

“We all enjoy the illusion of infinite [water] supply and pay virtually nothing,” says CEO chairman Muhtar Kent. “We must acknowledge the true costs of protecting, treating and delivering water, and develop models that reflect that cost. We must begin to value water as the essential and precious resource it is.”

Brooke Barton, senior director of the water program at Ceres, agrees – “Water may be cheap, but it is not limitless,” she says. “Water risks are already having negative effects on the food sector.”

There’s currently a disconnect between many food sector companies acknowledging these risks and acting upon them, Barton says. She predicts more companies will incentivize farmers for engaging in water sustainability management practices, as one example.

Jay Famiglietti, hydrologist with UC Irvine, says solutions need to be sought out sooner rather than later. He says the roadmap laid out in the Ceres report is a great place to start.

“Ag and food production as we know it in the U.S. is perhaps at a far greater risk than we even realize,” he says.

Famiglietti says the food industry needs to step up its role in environmental stewardship.

“It’s time for the industry to shoulder the responsibility of leading the way to water sustainability,” he says.