Published on: 22.3.2023

Information produced by Finnish Environment Institute

Finnish companies set to become leaders in water stewardship by 2030 – what does it take?

A target has been set for Finnish companies to become leaders in water stewardship by 2030 as a part of the national implementation of the UN Sustainable Development Goals. Suvi Sojamo from the Finnish Environment Institute lists possible ways to achieve the 2030 target based on recent research findings and discusses their international applicability.

During the past decade water stewardship by businesses has aroused increasing international attention from private, public, and civil society actors alike. It builds on company water use that is socially and culturally equitable, environmentally sustainable, and economically beneficial, achieved through a stakeholder inclusive process that involves site- and catchment-based actions.

Water stewardship gaining momentum in Finland

In Finland, supporting water stewardship actions has been listed as one of the objectives of the Finnish International Water Strategy and water stewardship commitments and partnerships have been noted as its practical means. To support the implementation of the strategy, we drafted a roadmap with Finnish ministries, research institutes and WWF Finland in 2019 which sets a target for Finnish companies to become world leaders in water stewardship by 2030.

According to the roadmap’s vision:

In 2030, Finnish companies will follow and exemplify the best water stewardship practices and will have actively participated in their development in collaboration with national and international stakeholders. Companies will pay special attention to value chain management and sourcing of sustainable materials, in Finland and abroad. Company practices will build on research-based contextual assessments and target setting. Water stewardship will be part of company risk management but will also support the implementation of the UN Agenda2030. Leadership in water stewardship will be a competitive advantage for Finnish businesses.

However, even at the time of drafting the roadmap, it was evident that Finnish companies required further guidance and support to develop their water-related practices. Similarly to the global situation (see, e.g., here and here), while Finnish companies increasingly understand their water-related risks and opportunities, tangible action on the ground lags behind.

We were commissioned by the Finnish government to undertake further research to identify and develop ways to achieve the 2030 aims. The main recommendations of our Waterstewardship2030 project are presented below.

Pathways to leadership in water stewardship

Companies need to commit to water stewardship publicly

While increasing numbers of companies acknowledge the importance of water, public commitment to the advancement of their practices is crucial. Endorsing the UN Global Compact CEO Water Mandate speaks to a global audience. Finland has a national water stewardship commitment building on international principles and best practices, which is tailored to the needs of Finnish businesses. It brings together guidelines and tools for five steps of company water stewardship progression. For smaller businesses and local operators, committing to water stewardship as a part of the EU Water Framework Directive implementation and river basin management plans is a strong message of company willingness to contribute to water protection.

Public commitment enhances company transparency and accountability and opens opportunities for crucial stakeholder collaboration.

Companies need to follow international standards, set research-based targets, and verify their progress

Water stewardship plans and practices need to be based on robust knowledge and processes.
International water stewardship standards provide guidance for site-level assessment and development work and should at least be applied in high water-risk locations. Contextual and science-based target methods help in setting meaningful and measurable water targets that are based on best available knowledge and support public policy aims. Proceeding from the application of water stewardship standards to certification provides an opportunity to verify progress.

While site-level certification enables comparisons between sites, reporting on company-level progress via acknowledged disclosure frameworks such as GRI and CDP enables global ranking.

To date, two Finnish companies, Metsä Board and UPM, have made it to the CDP Water Program A-list. Getting onto the list should be on any nationally or internationally significant company’s agenda.

Water criteria should be incorporated into corporate due diligence legislation, state subsidies and ownership steering by the state

In a survey of Finnish companies, legislation and public policies featured as the most common driver of water stewardship development. Based on our analysis of Finnish and EU legislation, the incorporation of water criteria into the mandatory due diligence legislation currently in preparation in Finland and the EU would be necessary to hold companies liable for any water-related human rights or environmental violations in their international value chains.

A focus on international value chains is central as via them, depending on estimates, 50-80 percent of the total water consumption by Finnish industries and households is abroad, also in areas suffering from severe water-related problems. Besides introducing new legislation, the existing legislation would allow for more extensive incorporation of water-related criteria into various public subsidies available to companies, in public procurement, and through the ownership steering of companies by the state.

Legislation and other methods of public sector steering are crucial to level the playing field for different businesses of various kinds and sizes. It also seems to be necessary to direct action at the most challenging areas of water stewardship development, such as international value chains, as markets have not addressed their water-related problems.

NGOs and civil society receive more public support to act as watchdogs and equal stakeholders

NGOs have played a key role in Finland in raising awareness of water stewardship and exposing water-related violations in company locations in Finland and in value chains abroad. Internationally NGOs have been a key driving force in stewardship guideline and tool development. It is in the public interest to ensure continued support for their work. As emphasized in international findings as well (see e.g. here) NGOs and local civil society also need public support to be level players in water stewardship projects, especially in developing country contexts.

Research institutes need to step-up their game as knowledge providers and facilitators

Research institutes have a key role in providing a scientific foundation for corporate water stewardship action and for the evaluation of its justification in the first place. Supported by the public sector, researchers may also act as third-party facilitators in multi-stakeholder collaborations for shared water related aims.

Who you travel with on the water stewardship journey is as important as its destination

While the pathways listed above are tailored to the specific context of Finland, we hope they spur debate and feed into the development of water stewardship policies and practices beyond our borders as well.

Eventually, when aspiring for a leadership position there is no use in competing unless you have others participating in the race too. In the worst-case scenario, being a leader in water stewardship in 2030, be that Finnish companies and actors more broadly or someone else, means that you are not performing as badly as your peers. In the best-case scenario Finnish government, companies, and other actors will collaborate with other international frontrunners to scale up efforts and impact in accordance with the best available science and public policy aims.

For further discussion, get in touch with:
Suvi Sojamo, Senior Research Scientist, Finnish Environment Institute,
Antti Rautavaara, Head of International Water Affairs, Finnish Ministry for Agriculture and Forestry,