Water is a crucial resource for every business, whether you sell food, electronics, clothing or other consumer items. A business’s water footprint is a measurement of the total water consumed to produce the goods and services it provides. It is a combination of the water that goes into the production and manufacturing of a product or service and the water used throughout the supply chain, as well as during the use of the product.

Understanding your water footprint is to understand where water is important to your business and how it relates to the products you are making.

The World Economic Forum’s Global Risks 2015 Report listed water crises as the highest impact global risk. Until now, water has been treated as a free raw material. Today, companies are starting to realise that mismanagement of water can damage their brand, their credibility, their credit rating and their insurance costs.

Unless you know how much water you are using – and how much is available in the river basins in which you and your suppliers operate – it is impossible to know whether you are using it sustainably or whether your business could face water-related business risk.

The water footprint enables companies to find out where and when water is used in their business. The water footprint of a company includes its direct (operational) water footprint and its indirect (supply-chain) water footprint.

The direct water footprint represents the water footprint resulting from the operations of the enterprise under consideration, i.e., activities directly related to production or manufacturing and from overhead (supporting services) activities, e.g. the water footprint of offices, canteens or horticulture. The indirect water footprint represents the water footprint of the inputs and products used in the production activities of a company.

Water Footprint Assessment of a business offers a new perspective for developing a well-informed corporate water strategy. Companies have traditionally focused on water use in their operations, not in their supply chain. Many companies will discover that their supply chain water footprint is much larger than their operational water footprint. As a result, companies may conclude that it is prudent to not only reduce their operational water use but to also address water risks associated with their supply chain water footprint.

According to Carbon Disclosure Project’s (CDP) Global Water Report 2014, two-thirds of the world’s largest companies report exposure to water related business risk that could generate a substantive change in their business, operations or revenue.

It is not enough to know your water footprint. It is as crucial for any business to know the water footprint of the regions and river basins where their operational and supply chain water footprints land. Water scarcity or pollution can disrupt or halt production, cause problems within the supply chain, lead to conflict with other water users, such as farmers or communities in the area, and damage corporate reputations.

Understanding the cumulative picture of water consumption and pollution can help identify water-related business risks and the strategic actions required to achieve sustainable water use and water resource efficiency.

Leading companies around the world are realising they must manage these risks by putting the water footprint on their agendas, just as they do their carbon footprint. Front runners that disclose their water footprints before others do, that set clear targets to reduce their water footprint, and pay special attention to those areas where problems of water scarcity and pollution are most critical, can turn these risks into a competitive advantage and become leaders in water stewardship.

In fact, businesses can play a central role in solving the world’s water problems. Find out more about Water Stewardship and how your company can become a water steward.

Calculate your company’s water footprint

Whether you are a partner or not, we invite you to use our free Water Footprint Assessment tool to get an insight into how you use water and to see how we can help.

Apply Water Footprint Assessment to a product, facility or to your entire company. Calculate the green, blue and grey direct and indirect water footprint and explore the sustainability of the different components to prioritise where action should be taken.