Water Risks Near Boiling Point

October 27, 2015 12:00 PM
 
Water Risks Near Boiling Point

Agribusiness must amp up sustainability, report says 

It’s no secret farmers and agribusinesses require vast amounts of water to remain viable. That’s why the agriculture industry needs to seriously evaluate its use of the resource, notes nonprofit sustainability group Ceres.

“While a small number of companies are taking wide-ranging actions to manage water risks across their operations and supply chains, most have a long way to go,” a new report from the organization states. Published this spring under the title “Feeding Ourselves Thirsty: How the Food Sector is Managing Global Water Risks,” it benchmarks water risk, dependence and security for 37 major food companies including Coca-Cola and Kellogg.

The report points to a growing challenge for top operators, who face pressure from dry conditions, limited groundwater supplies, end users and policymakers to improve water management. Producers should be prepared to act and explain how they will address those concerns. 

“Water may be cheap, but it is not limitless,” says Brooke Barton, senior director of the water program at Ceres. “Water risks are already having negative effects on the food sector.” Many food companies acknowledge water risks, but not all of them act on those risks. 

Incentives To Change. That represents a disconnect, Barton says. She predicts more companies will incentivize farmers to engage in water sustainability management practices in the future. Those solutions need to be sought out sooner rather than later, argues Jay Famiglietti, hydrologist with University of California, Irvine. He says the Ceres roadmap is a start.

“Ag and food production as we know it in the U.S. is perhaps at a far greater risk than we even realize,” Famiglietti points out. “It’s time for the industry to shoulder the responsibility of leading the way 
to water sustainability.”

The report scores food-sector companies on water risk management, direct operations, manufacturing supply chain and agricultural supply chain. The ranking on a scale from 0 to 100 is based on information from financial statements, sustainability reports and more.

High-scoring companies include Unilever (70), Coca-Cola (67), Nestle (64), PepsiCo (55) and Kellogg (54). Yet nearly a third of companies scored 10 or below.

“We all enjoy the illusion of infinite [water] supply and pay virtually nothing,” says Muhtar Kent, CEO of Coca-Cola. “We must acknowledge the true costs of protecting, treating and delivering water and develop models that reflect that cost.”  

Key Farming Regions Face Groundwater Crisis 

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Groundwater basins are overused worldwide, the nonprofit sustainability group Ceres cautions in a new report, threatening surface water and ecosystems.

5 Ways To Improve Water Sustainability 

1. Increase board oversight and understanding of material water risks.

2. Conduct robust water risk analysis.

3. Address watershed-level risks.

4. Tackle water risks and impacts in agricultural supply chains.

5. Improve disclosure.

 

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