Water usage in food production... is water the new carbon?

Water governance will be a much discussed issue in 2008. The food and drink sector is at the forefront of many voluntary initiatives in the area but it will need to continue to lead as well as be responsive to emerging developments.

‘Water is the new carbon’ has become an oft-repeated comment about the water resource management issues facing society at large. The actual quote is attributed to Carter Roberts, President and CEO of the World Wildlife Fund – US, at a conference in July 2007, but what exactly will it mean in practice?

There is undoubtedly a growing recognition that water is a resource that must be better managed going forward. Experiencing drought and severe flooding reminds us all of the power of water or lack of it. But water governance is not just about addressing the effects of climate change.

2007 saw a number of developments in the area of water governance with particular impacts on, and often involving or led by, the food and drink sector. Whilst the concepts underpinning balancing water use may not be as well defined yet as those surrounding carbon, developments are moving rapidly and 2008 will undoubtedly bring more. In particular, the need to gather more detailed and reliable information on water use in order to underpin an analysis of how to reduce an organisation’s ‘water footprint’ has been identified as a key issue.

Water governance and the wider context

Global initiatives to address the issues surrounding sustainable water management are beginning to be combined with clear and more targeted legislative requirements and policy initiatives at the national and European level. These are complemented by numerous voluntary initiatives and action taken by industry – many led by the food and drink sector.

The figures on the importance of water to poverty alleviation and human and ecosystem health are familiar and remain compelling. According to the United Nations Development Programme (UNDP), over one billion people lack access to water and over 2.4 billion lack access to sanitation. Whilst the areas most affected by this are Africa (water) and Asia (sanitation), water shortages are no longer considered to be an issue with limited relevance to other parts of the world. Even England has very recently experienced legal restrictions on use of water in certain areas of the country.

There is, of course, a link between water resources and the effects of climate change and it is this part of the picture that tends to be particularly visible. Although the issues surrounding management of water resources are in many respects free-standing, water resource issues need to fit in with other environmental initiatives including those that address climate change.

The UNDP has a Water Governance focus area which emphasises an integrated approach to water resource management and which has organised some seminal events. The UNDP defines water governance as the range of political, social, economic, and administrative systems that are in place to develop and manage water resources and the delivery of water services at different levels of society.

Corporate reporting of environmental performance and commitments going forward is in many cases required or at the very least expected. One of the key performance indicators that readers of those reports, whatever format is followed, will expect to see included is water consumption – with a commitment to future reduction in consumption.

Voluntary industry initiatives

2007 saw two well-publicised industry initiatives with particular relevance to water resource management issues. These types of initiatives invariably attract some criticism as an attempt by industry to avoid a more onerous legislative requirement to take action. That ignores their immense value in raising awareness of the issues and setting a benchmark for what is to be expected of participants in the sector.

Food and Drink Federation – The environment - making a real difference and the 2008 Federation House Commitment

In 2006, Defra introduced the Food Industry Sustainability Strategy. It encouraged the food industry to voluntarily tackle its environmental impacts and suggested an industry-wide absolute target for reduction in water use by 2020.

Whilst not limited to water issues, the ‘five-fold environmental ambition’ programme launched in October 2007 by the Food and Drink Federation sets out actions in five priority areas where federation members can make the biggest difference to improving the environment. In addition to commitments in the areas of reduction of carbon dioxide emissions, reduction and ultimate elimination of food and packaging waste to landfill, reduction in the levels of packaging and environmental standards in transport practices, there is a commitment to ‘making significant reductions in water use to help reduce stress on the nation’s water supplies.’

The more specific goal, subject to conservation of water not compromising food safety and hygiene, is an industry wide target to reduce water use, outside of that embedded in products themselves, by 20% by 2020 measured against a 2007 baseline. Central to achieving this goal will be the new Federation House Commitment (“FHC”) on reduction of water usage by companies in the food and drink industry. Announced by the Federation on 28 January 2008, the Food and Drink Federation worked with Envirowise, the government’s expert advisor to business on resource efficiency, to develop the FHC. The basic pledge made by companies who become members of the FHC is to review on-site water use including, within six months of signing, developing and then delivering a “cost-saving water reduction action plan.” Envirowise will act as an independent administrator of the FHC and members must report annually to them on water and cost savings made.

The CEO Water Mandate

The CEOs of six corporations, involved in the UN’s much wider Global Compact corporate citizenship initiative, launched this water specific initiative during July 2007. The mandate was developed in partnership with the UN Global Compact and the Government of Sweden. At the launch, the six initial signatories noted that ‘the private sector have an important stake in helping to address the water challenge faced by the world today’ and the Water Mandate asks companies to make progress in six areas.

The Mandate is intended to be voluntary and aspirational but nonetheless be a commitment to action. The basic scheme involves the signatories making ‘pledges’ in the six key areas identified: direct operations; supply chain and watershed management; collective action; public policy; community engagement and transparency. Chief Executive Officers of companies in the food and drink sector are signatories along with other sectors, including water service companies involved in infrastructure and supply. The initiative is open to companies of all sizes and from all sectors and since the launch, there have been a number of new signatories.

The Mandate requires, inter alia, setting water conservation and wastewater treatment targets and including water sustainability considerations in business decision making such as facility siting and production processes. This will then tie in with the transparency pledge. Many organisations already report information on water takings as well as any pollutant and contaminant releases associated with operations, so this may not be a particularly onerous part of the pledge.

The Water Mandate has not been without its critics. Criticisms note the lack of clear commitment on how companies will be held accountable for any actions they claim they will make. A concern whether ‘water dependent industries’ should be taking the lead in water policy making through legislative initiatives will undoubtedly be addressed going forward as awareness of the need for and ways to achieve better water governance become better understood and more widely expected.

European developments

‘Water efficiencies must be at the core of our policies…Water saving behaviours by European citizens and industry must be actively encouraged and promoted.’ Stavros Dimas, Environment Commissioner, 18 July 2007.

A July 2007 Communication from the European Commission entitled ‘Water Scarcity and Droughts’ identified an initial set of policy options to be taken at European, national and regional levels to address the issue of water scarcity. The Communication identified putting the right price on water with a ‘user pays’ principle becoming the rule as being at the heart of the various policy options.

Although the discussion has not yet produced new legislation with the primary purpose to encourage improved water governance, there is already a very large body of existing legislation which deals with quality of water resources and water supplied for human consumption. Legislation such as the Water Framework Directive and the Integrated Pollution and Prevention Control Directive (which applies to some manufacturers in the food and drink sector) can also provide a means of addressing water usage in production processes.

At their 30 October meeting in Luxembourg, the European Environment ministers asked the Commission to present a follow-up report in 2008, including deadlines for the implementation of the measures identified in the communication, and to review and further develop the evolving EU strategy for water scarcity and droughts by 2012. The ministers also highlighted the fundamental problem of ineffective water management, which influences water scarcity and can induce additional impacts when a drought occurs. In this context, the Council called for a more common approach to drought risk assessment and drought management planning.

New UK Water Strategy for 2008

Defra aim to publish a new water strategy in early 2008. "Future Water" will influence the policy framework for how water is supplied, consumed and utilised.

The Environment Agency is the main regulator for the management of water resources in England and Wales. Their mandate extends to regulating abstraction of water, environmental monitoring, regulation of certain industries through the Pollution Prevention Control (PPC) regime and planning for future water needs. The Environment Agency is also the body which brings prosecutions for causing water pollution and has powers to seek to have water pollution remedied.

The Environment Agency has a published Water Resources Strategy. During 2007, the Agency consulted on a new strategy and expects to publish the final version during 2008.

In addition to the wider issues associated with water stress in parts of the country and management of resources, the Environment Agency has indicated that by 2009, it hopes to be able to publish league tables of industrial firms based on resource efficiency. There is already a pollution inventory providing data for food and drink manufacturing and an index showing the physical quantities of water, energy and materials used by site per unit of output over a particular year may not be far off. Commercial issues, such as information on production rates, will need to be addressed if such an inventory is put in place, but that would not stop the information being used to focus on products causing the greatest environmental damage.