Identifying
water risks

Water risk and opportunity identification

Objectives:

The mapping exercise in the first step in the water stewardship progression gives an idea of whether water is directly or indirectly a key issue for the company in terms of responsibility. To this end, the company’s essential water risks and opportunities are identified. The risks may be associated with not only the company’s own operations and sites but also other actors and locations in the value chain. The risks and opportunities may, for instance, berelated to the availability of water, emissions into waters or employees’ access to safe drinking water and sanitation or the general status of water management in the company or its value chain.

Scope:

The company’s own operation locations and value chains, including subcontractors, in Finland and globally.

Linkages:

The company’s risk analyses, materiality analyses in which responsibility is emphasised, as well as management of value chains and procurements.

Guidelines and tools:

Guideline materials are offered by Alliance for Water Stewardship, UN Global Compact CEO Water Mandate ja WWF, among others. WWF Water Risk Filter ja WRI Aqueduct are versatile tools for mapping water risks and opportunities as well as identifying the most critical locations. The general examinations should be supplemented with information specific to each operation location and first-hand knowledge of the local circumstances.

Water risk assessment

More detailed assessment of water risks and opportunities as well as water-related impacts

Objectives:

The second step in the water stewardship progression focuses on assessing the water risks and opportunities identified as essential and describing, analysing and valuating them in more detail. Which are the concrete economic, social and environmental advantages or disadvantages of the water risks and opportunities identified as essential? Typical examples include continuity of production and positive or negative effects on the company’s reputation. The assessment helps the company to identify its concrete water-related costs and benefits and makes it possible to compare alternative raw materials, processes and products.

Scope:

The more detailed assessments should focus on the operation locations and value chains identified as the most critical in the first step.

Linkages:

The assessment should be linked to, and apply the same methods as, the company’s wider risk assessment and management practices. Water risks identified as essential are frequently linked to other areas of corporate responsibility, such as climate, human rights and biodiversity impacts. Due to international efforts to develop binding criteria for sustainable finance, water responsibility today also has closer links with the company’s investment and financing solutions.

Guidelines and tools:

For example, WWF Water Risk Filter and WRI Aqueduct help to both identify water risks and assess them in detail, whereas Ecolab Water Risk Monetizer assists with water risk valuations. It is advisable to incorporate these assessments in ISO 14001 and EMAS environmental management systems. ISO Water Footprint and Water Footprint Network offer methods for water footprint calculation and impact assessment.

Strategy

Incorporating water into strategy, targets and action

Objectives:

Water risk management as well as promoting waterstewardship and grasping the opportunities offered by it have the best chance of success if they are integrated into the company’s strategy as well as operative and risk management systems. Once the water risks and opportunities have been identified and assessed (Step 2), the company can define key priorities, objectives and actions.

The priorities and objectives may relate to, for example, sustainable water use in the company and a good status of waters in it surrounding catchments, employees’ and local communities’ access to safe drinking water and sanitation, or developing water resources management and governance in a selected catchment context. Water stewardship action may include, for example, technical improvements, training, improved practices, or catchment restoration and development projects .

Scope:

The company sets a strategic objective for water , ensuring that the management is committed to attaining it. Within the context of this strategy, specific water targets are set for the company and sites, including the value chains.In particular, the targets and measures should focus on areas and/or value chain parts flagged in the assessments of water risks and opportunities. While water stewardship measures include internal improvements, the preconditions for attaining the objectives usually include stakeholder cooperation and taking the local operating environment into consideration (see Step 4).

Linkages:

Water stewardship should be an elemental part of the company’s strategy and its operative and risk management systems (incl. ISO 14001, EMAS). The objectives the company sets should account for critical factors in both the company’s and its subcontractor’s sites of operation. Striving to identify shared objectives for the operation locations, the public sector and other water users and stakeholders is also important. The UN Sustainable Development Goals create a general framework for the objectives of water stewardship.

Guidelines and tools:

Guidelines for developing water stewardship strategies are offered by CEO Water Mandate ja World Business Council for Sustainable Development (WBCSD), among others. Guidelines and tools for setting water stewardship targets are provided by CEO Water Mandate, World Resources Institute (WRI) and WWF as well as the Science Based Targets Network.

Cooperation

Developing sustainable water use and governance with stakeholders

Objectives:

While the company’s internal improvements are at the core of water stewardship, cooperation with stakeholders is usually a precondition for managing the company’s water risks. Cooperation helps to achieve sustainable water use and management both in the company’s own and its subcontractors’ operation sites. Additionally, any opportunities associated with water almost always materialise through stakeholder cooperation. It is particularly important to work together with the public sector, which carries the primary responsibility for water resource management both in Finland and other countries. Striving to work together with partners who have sound knowledge of the local conditions, including non-governmental organisations and research institutes, is also advisable. It is crucial to take local communities and citizens into account and involve them in water stewardship projects from the start. This cooperation should be transparent and accountable.

Scope:

Stakeholder cooperation is particularly important in regions and/or parts of the value chain that were flagged in the assessments of the company’s water-related risks and opportunities.

Linkages:

Stakeholder cooperation on water stewardship can be integrated into the company’s other corporate social responsibility work. Water stewardhip work may play a key part in securing a ‘social licence to operate’ for the company.

Guidelines and tools:

Guidelines for stakeholder cooperation in the context of water stewardshipare are offered by CEO Water Mandate. Alliance for Water Stewardship International Water Stewardship Standard also lists principles and tools for developing water stewardship together with stakeholders.

Monitoring, evaluation and reporting

Monitoring, evaluation and reporting on water stewardship progression

Objectives:

Water stewardship should be developed in a transparent manner, the achievement of its objectives should be monitored continuously, and the monitoring results should be reported. Continuous improvement of water stewardship practices means that the monitoring results are evaluated frequently enough and that the activities are developed on this basis. To enable comparisons, it is appropriate to comply with international standards when monitoring and communicating about water stewardship.

Scope:

The status and progress of water stewardship should be monitored in line with the objectives defined in Step 3 for the part of the entire company as well as the theoperations locations and themes identified as critical.

Linkages:

Water stewardship monitoring should be integrated into the management systems and annual reporting of the company and its operation locations as well as the audits of its subcontractors.

Guidelines and tools:

Guidelines for the monitoring, evaluation and reporting of water stewardship are offered by CEO Water Mandate and by Climate Standards Disclosure Board (CSDB). Alliance for Water Stewardship International Water Stewardship Standard is a comprehensive water responsibility standard and certification system for developing and verifying businesses’ water responsibility. While a number of sustainability and responsibility standards, including UTZ, Global Gap, FSC, Fairtrade and Luomu, contain criteria relating to water, none of them cover water issues comprehensively. However, out of them the ISEAL Alliance listed standards are compatible with the AWS standard, and they are mutually complementary.

GRI 303: Water and Effluents the reporting standard covers the company’s water abstraction and consumption, emissions into waters and impact on regions afflicted by water stress and in the value chains. It is intended for use in general stakeholder communications. CDP Water Program offers an extensive reporting framework for a company’s water security and international benchmarking. It also looks at water issues relevant to the company’s economic capacity and profitability. The framework is intended for use in communication targeted at finance providers, investors and companies making large procurements, in particular.