Today, people around the world identify water issues as the most serious sustainability challenges facing our planet.

A 2009 GlobeScan and Circle of Blue survey of 32,000 people from 15 countries found that more than 90 percent perceived “water pollution” and “freshwater shortage” as serious problems. As striking, the survey found that concerns about access to water and water pollution have outpaced concerns about other well-recognized sustainability challenges, such as global climate change, natural resource depletion, and biodiversity loss.

In recent years, a comparatively small but growing number of business leaders have likewise identified water as a key strategic concern and priority. Virtually all companies rely on water resources to some extent; indeed, for many, business would be impossible without water. More to the point, the ways in which companies—and others—use (or abuse) this increasingly precious resource can have significant implications with respect to access and availability, regulatory risk, and corporate reputation.

These understandings provide the basic underpinnings for a number of emerging and growing corporate water-related initiatives, including the UN Global Compact’s CEO Water Mandate. At the heart of the CEO Water Mandate—which today includes approximately 70 companies from a range of sectors—lies a relatively new concept: sustainable water management (SWM). At its most basic level, SWM is the management of water resources by a range of stakeholders, including business, which holistically addresses equity, the economy, and the environment in ways that help maintain the supply and quality of water for a variety of needs over the long term.

For companies, the concept of SWM has important implications with respect to corporate water policy development and implementation. It implies that companies, in order to strive toward water security, must look far beyond their fence lines and engage with a spectrum of water stakeholders—including supply chain partners, public authorities, civil society, and other interests—to help ensure the healthy and long-term stewardship of a given water catchment, river basin, or watershed. Put another way, it means that a business enterprise must truly relate its “water footprint” to the overall health and welfare of the surrounding economy, community, and environment and ecosystem. Such a contextual approach rests on the notion of “shared risk” for all stakeholders in a defined water space—most usually at an extremely local level, as this is where water issues often play out.

In the same way that common problems pose risks to business, society, and governments, joint efforts to reduce risks can emerge through common understanding, strategies, and solutions. As such, shared risk provides a strong argument for key stakeholders to cooperate and collaborate to promote SWM.

This was the major theme at the recent working conference of the CEO Water Mandate in South Africa, where more than 100 leaders from business, finance, government, civil society, the United Nations, and other interests gathered to discuss moving from shared risks to “shared action.”

The conference was especially noteworthy with respect to its focus on public water policy. It is widely understood that public water policy occurs at all levels of government. The overarching legislative framework is typically developed at the national or state/provincial level, whereas management and operational aspects are implemented at the local or catchment level.

Numerous elements of public water policy are increasingly understood to be of key relevance to business activities, and include: water supply and infrastructure; water delivery; water resource protection; water rights and allocation; water pricing and pollution control; and sanitation services.

While these elements are all considered crucial aspects of public water policy, their existence and effective application vary enormously across the world. In some cases, particularly in less developed countries, enormous irregularities and distortions exist, and may be compounded by a lack of capacities. In the worst cases, there is outright governance failure, including corruption. In other instances, governance and public capacities and policies may exist, but resource constraints hamper effective implementation.

Corporate engagement with public policy has traditionally been understood as direct policy advocacy and lobbying. At the CEO Water Mandate conference in South Africa, a new paradigm was proposed, however—namely, that corporate engagement in public policy should involve interaction with government entities (at all levels), local communities, and or/civil society with the goals of advancing two objectives: 1) responsible internal management of water resources within direct operations and supply chain in line with policy imperatives, most notably legal compliance; and 2) the sustainable and equitable management of the catchment in which companies and their suppliers operate.

This new paradigm and related core principles are contained in the CEO Water Mandate’s new “Guide to Responsible Business Engagement with Water Policy,” which was officially released during the conference in South Africa.

In addition to laying out a set of core principles (see sidebar), as well as a number of specific corporate case examples, the Guide identifies five primary scales for water policy engagement:

  1. Internal operational or supply chain management. Companies facilitate internal and supplier actions that comply with regulatory specifications and are in line with broader water policy objectives (e.g., proactive pollution control).
  2. Local engagement. Companies work with municipalities, communities, and other stakeholders to make operational improvements to preserve environmental quality and ensure the reliability and adequacy of local water supplies and sanitation.
  3. Regional, catchment-scale integrated water resource management. Companies engage with water management authorities and other stakeholders to support effective water allocation, pollution control, and other water resource issues.
  4. National dialogues and policy advocacy. Companies, in collaboration with other stakeholders, become involved with water and related policy development and oversight to ensure that appropriate legislation and institutional arrangements are in place and functional.
  5. Global initiatives. Companies engage with governments, inter-governmental organizations (e.g., the UN), bilateral and multilateral development agencies, and non-governmental organizations on water advocacy and collective action efforts.

It is important to stress that the management of water is a government mandate. This responsibility was further reinforced by the recent resolutions by the UN General Assembly and UN Human Rights Council, recognizing access to safe water and adequate sanitation as basic human rights.

At the same time, it is also clear that water-related risks are shared between government, business interests, and communities. Shared risks demand shared action. This is arguably the only path to true sustainability.