The UK Ministry of Defence (MoD) has just announced that it will set targets for its contractors to reduce water consumption across the MoD's estate of 260 main defence establishments, 140 training sites and 49,000 military homes, by 2016. The MoD currently uses around 17.5 billion litres of water each year, and this initiative is one of a number of actions intended to reduce water use by 7%.
The MoD is one of the first large organisations in the world to set out this requirement for its suppliers, but others are sure to follow. The problem, as outlined by Defra is "…because of our need to adapt to climate change, our water intensive lifestyle and other pressures such as changing land use, we need to find ways of using water much more efficiently and sustainably if we are to continue to enjoy high standards and constant supply."
In recent research conducted by the Carbon Trust in the UK, USA, South Korea, China and Brazil, 93% of international businesses leaders agreed that carbon emissions are a priority risk to the ability to compete effectively, but fewer than half of those surveyed agreed that they needed to take action on water. Only one in seven of those businesses had set a target on water reduction, or publicly reported on water performance. This absence of plans and planning should concern both shareholders and professional advisers.
The Carbon Trust believes there are important roles for the accounting profession in sustainable development. One of these is to ensure that the risks in not having a strategy for managing resources are properly understood by management. A critical step is to ensure that an organisation has in place a policy to collect data on its resources use so that, at a point in the future, the organisation is able to examine the data, and understand the trends and exposure to risk. An organisation's ability to measure and account for the water it uses and discharges in its own operations, and the water embedded in its supply chain, is an important component in understanding the business risks of increasing water scarcity.
Effective and accurate accounting of water use and its impacts will increasingly take place alongside other sustainability metrics, such as corporate carbon footprints, informing best practice corporate sustainability strategy.
To help drive the move to a resource-efficient economy the Carbon Trust has just launched the new Carbon Trust Standard for Water. This is the first international certification to recognise organisations that have measured, managed and reduced their direct water use, in the same way that the Carbon Trust Standard encourages carbon reduction. The first companies to achieve this new certification are Sainsbury's, Coca-Cola European Partners, Berendsen and Branston.
The Carbon Trust Water Standard requires organisations to provide at least two years of data on water abstraction. It also requires completion of qualitative reporting to assess the organisation's grip on water governance, water accounting and water management.
The advantages of reducing water use are simple and clear. Reduction cuts water costs, and shows that an organisation is concerned about water scarcity and wishes to reduce its impact on the environment. Those organisations that can achieve the certification are able to claim the reputational benefits that come from being independently certified, and recognised as leaders within their sectors in managing a dwindling resource.
The MoD has provided a clear lead in water management. Other organisations in the UK and elsewhere are taking firm action to manage their water, finding innovative ways of reducing their consumption. Many more need to follow their lead.
1. Source "Future Water; The Government's water strategy for England, February 2008"
2. 475 telephone interviews among C-level executives, October 2012