11.3.5 Corporate reporting requirements and water use reporting tools

In line with civil society's call for responsible business conduct, commencing 2005, large companies in the EU are obliged to report in their annual report on their environmental impact (and employee matters) relating to their global business activities (EU Modernisation Directive, 2003; Lambooy and Van Vliet, 2008).1 The obligation includes providing 'quantitative data, in absolute terms, for emissions and consumption of (...) water (...) for the reporting period together with comparative data for the previous reporting period. These figures should preferably be expressed in physical units rather than in monetary terms' (EU Commission Recommendation, article 1/Annex 4.2(d)). Although reference is made to the ' business operations of the company', and to costs of steps related to the 'avoidance of waste, the protection of soil and of surface water and groundwater (. ) and the protection of biodiversity and landscape', the EU legislation does, however, not provide technical tools on how to measure impact on water.

Guidelines on environmental reporting are offered among others by the GRI, which has pioneered the development of the world'smostwidelyused sustainability reporting framework. This framework sets out the principles and performance indicators that organisations can use to measure and report on their economic, environmental, and social performance (GRI, 2008). The current third generation reporting guidelines, the GRI G3, provide for an extensive chapter on environmental performance reporting. Freshwater use is one of the key issues. GRI advises companies to report on (i) their direct water withdrawal from all available sources such as surface, ground and rain water, waste water from other organisations and freshwater supplies from municipalities, which can all be measured from water bills and meters and calculations derived from other available water data (Environment Indicator Protocol, EN8);

and (ii) water sources significantly affected by the withdrawal of water, and the percentage and total volume of water recycled and reused respectively (EN9 and EN10). However, reporting on water use is not mandatory if a company applies the G3 GRI application level of C.2 Moreover, companies normally only report on their own, annual, direct water use and do not take into account indirect water use, i.e. water used in supply chain.

The Global Water Tool introduced by WBCSD also includes supply chain concerns. It is a web-based software water diagnostic tool to map water use and to assess the risks associated with water availability relative to global operations and extended supply chains. The six main questions are: how many of your sites are in extremely water-scarce areas? Which sites are at greatest risk? How will that look in the future? How many of your employees live in countries that lack access to improved water and sanitation? How many of your suppliers are in water scarce areas now? And lastly, how many will be so in 2025? The answers need to include staff presence, industrial use of water, and the supply chain. The answers are compared with validated water and sanitation availability information - on a country and watershed basis, by allowing the calculation of water consumption and efficiency and establishing relative water risks in a company's portfolio to prioritise action - including more detailed assessment. The Global Water Tool calculates water withdrawal from fresh and non-freshwater sources (m3/year), fresh and non-freshwater discharge by receiving bodies (m3/year), and the total water consumption of a company calculated as the sum of withdrawals minus discharges. Based on these figures, the tool provides GRI water indicators, inventories, risk and performance metrics and geographic mapping and enables effective communication with internal and external stakeholders on a company's water issues (WBCSD, 2007).

Another tool concerns the ' Business Water Footprint' which enables a company to calculate its total water consumption per year and/or per product. In 2002, this concept was developed for calculating corporate freshwater consumption (Hoekstra, 2003). It was further developed in 2008 for individual and national consumption comparisons (Gerbens-Leenes and Hoekstra, 2008). Similar to the carbon footprint, the business unit water footprint (BWF) is defined as the total volume of freshwater that is used, directly and indirectly, per year to produce the goods and services delivered by a specific unit (WBCSD, 2007). The water footprint per product can be derived from this, and shows water use from the consumer's perspective. It reveals how much water is needed to produce e.g. a cup of coffee or a T-shirt. The water footprint also shows how dependent many countries and businesses are on the water resources in other countries for the production of raw materials or end products (Hoekstra and Chapagain, 2008). As indicated, the BWF takes the supply chain into consideration. The BWF consists of the operational and the supply-chain water footprint. The first is the amount of freshwater used at a specific business unit. The latter is the amount offreshwater used to produce all the goods and services that form the input of production at the specific business unit, i.e. the indirect use. The water footprint concept distinguishes between three different kinds of freshwater footprints: blue water concerns freshwater that evaporated from surface water and groundwater; green water relates to evaporated rainwater stored in the soil as soil moisture; and grey water is polluted water (WBCSD, 2007). The BWF is calculated in six consecutive steps. In particular, this process shows the production step in which the most water is used. This makes it easier to adequately address freshwater consumption (Gerbens-Leenes and Hoekstra, 2008). Water footprinting is geographically explicit, indicating the location of water withdrawal or discharge and it can also provide a standard for comparing and benchmarking water use with industry peers. By way of illustration, Table 11.1 provides a comparison between various industry sectors of the water footprint of their value chain. The water footprinting methodology is continually being developed, disseminated, and supported by the Water Footprint Network, a nascent non-profit entity working to promote water stewardship through the advancement of the concept and methodology of water footprinting (Water Footprint, 2008, p. 80-81).