According to a recent report from the Pacific Institute, a majority of companies do a poor job of assessing their water footprints across the entire business supply chain, leading to risks associated with water scarcity, E&E Daily reported.
Researchers at the Oakland, Calif.-based think tank surveyed 110 companies in 11 sectors and found that only 15% had approached water scarcity issues in a comprehensive manner. Sectors studied include the beverage, mining, food product, pharmaceutical and forestry industries.
The United Nations' CEO Water Mandate commissioned the report. The Water Mandate is a program established by the U.N. secretary general to help the private sector address the water resources management. The program is meant to prepare the business community for future water supply shortages.
The report found that most of the companies did not examine how water use affects them outside of their direct operations, ignoring overall supply-chain performance and regional or local effects of water use.
James Morrison, a program director at the institute and co-author of the report, said corporations should look at how their products consume water in other parts of the manufacturing process, not just in direct operations.
For example, he cited Levi Strauss & Co., which recently determined that most of the water use associated with making a pair of their 501 blue jeans was associated with cotton production, not direct manufacturing.
Levi Strauss "would be well served to think about where it's sourcing its cotton," Morrison said, taking steps to ensure efficiency.
"If I'm an investor, and I know this company has given thought to its water risk, I'm going to feel more comfortable that this company has thought strategically about this issue," Morrison said.
Source: E&E Daily