Responsible Engagement on Water Policy

August 17, 2009

As the CEO Water Mandate prepares for its fourth working conference as part of World Water Week in Stockholm this week, we believe it is important to reflect on the broader context in which water resides—specifically, its role as a global security issue, and its relation to other critical environmental and social issues.

Water is a proverbial lightning rod issue. Unlike climate change, which represents a great global externality resulting from a great global market failure, water is decidedly local. The uneven distribution of water resources—combined with poor water governance and ill-developed frameworks around rights and responsibilities—raises important issues around fair and equitable water access. Indeed, at the UN we increasingly speak of the notion of “water poverty;” this is not just a rhetorical device, but a concept that ties water into the broader context of security issues.

These security issues are also critical business issues. Achieving security in any of these areas—climate, water, food, health, and the economy—can mean the difference between prosperity or chaos for nations, societies, and economies around the world. “Securitizing” these issues elevates them to their appropriate importance within global governance concerns.

It is equally important to examine the connectivity of the various sustainability issues. For example, there is consensus that climate change will have a major impact on fresh water, which is vital for life as well as for the functioning of business and industry. But few governments, UN agencies, or private sector organizations are effectively integrating their climate and water strategies. A recent white paper issued by the UN Global Compact and the Pacific Institute explores this topic.

To extend this example, water availability is highly correlated with development and economic growth, including its link to food security. (There is also an important but largely unexplored water-energy nexus—as significant amounts of water are used to create energy, while significant amounts of energy are used to treat and deliver water.) Where water is scarce, social unrest and even violent conflict can be the terrible results. Clearly, these are not outcomes conducive to creating healthy and stable business and investment markets.

The CEO Water Mandate and its endorsers and stakeholders plan to address these key issues with a recently developed work stream on responsible corporate engagement in public policy. Introduced at the mandate’s third working conference in Istanbul last March, the objective of this work stream is to provide principles, practical steps, and case examples that can facilitate companies’ responsible engagement with water policy in a manner that reduces business risks while simultaneously advancing policy goals and positively impacting nearby communities and ecosystems.

This heady mission aims to cover water-resource protection, allocation among sectors, distribution, use regulation, infrastructure, and pricing.

Recognizing the concerns some groups have regarding corporate engagement in public policy generally, and with respect to water specifically, the mandate will seek to set down common principles related to stakeholder engagement, a human-rights-based approach, and transparency. Potential areas to be explored will include the importance of civil society participation in policy discussions; conducting human rights impact assessments in relation to the development of business operations and facilities; and supply chain disclosure as part of standard water reporting. (The draft outline of this project is open for public comment at

This contested and controversial space must be approached with a high degree of sensitivity. As WWF noted in its recent report “Understanding Water Risks,” decisions related to water public policy can be fraught: “The question of ‘who decides’ how to respond is critical, with a need for coordinated responses led by national governments and supported by companies, environmental agencies, provincial and local governments, and end users, in order to avoid risks of water scarcity being transferred onto those communities and individuals who are politically marginalized and least equipped to cope with them.”

For these and related reasons, the CEO Water Mandate has codified a transparency policy, whereby corporate endorsers of the initiative are required to report publicly on the six core elements of the mandate:

  1. Direct operations
  2. Supply chain and watershed management
  3. Collective action
  4. Public policy
  5. Community engagement
  6. Transparency

Companies that do not comply risk being publicly delisted from the program. (The first batch of these communications on water progress are due in October.)

Another work stream of the mandate also focuses on corporate water disclosure, highlighting the need for better reporting. Released by the UN Global Compact and the Pacific Institute in March 2009, “Water Disclosure 2.0” presents a state-of-play with respect to current water-reporting practices, offering an analysis of 110 companies across 11 water-intensive sectors. The study makes for sobering reading:

  • On average, the companies and industries surveyed met only 30 percent of the 20 criteria against which they were assessed.
  • Most of the mandate’s six elements were vastly underreported, particularly public policy, supply chain, and collective action.
  • Seventy percent of companies claiming to use the GRI G3 indicators had indexes that inaccurately portrayed their actual data.

The CEO Water Mandate intends to build on this work by developing greater guidance, especially with respect to some of the initiative’s “process-oriented” dimensions, including public policy, supply chain and watershed management, community engagement, and collective action.

Building private sector engagement with the CEO Water Mandate has been slow, but it is clear that growth will likely be steady. For many companies, engagement in the CEO Water Mandate can seem daunting, given the breadth of the initiative’s core elements, as well as the reporting requirement. However, it is important to note that the mandate, like its parent, the UN Global Compact, represents a learning and continuous improvement platform. It exists to help companies stretch into new and important areas.

It is our hope that in the coming years, the notion of “water stewardship”—as opposed to the more narrow “water management”—will be embraced by all societal actors, including the business community. This approach will entail wider responsibilities for all global and local stakeholders. But by rising to these new responsibilities and by working together, we can protect this life-sustaining and business-sustaining resource for the benefit of all.

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