Context, collaboration and science: Why P&G’s new water strategy is a sign of wider change in corporate water stewardship

Pictured: The Bear River in North America. Image: P&G

The FMCG major unveiled its new water ambitions late last week, with the headline-grabbing ambition being the restoration of more water than the business’ operations consume in 18 water-stressed regions across seven countries. Regions in which P&G owns or operates manufacturing facilities have been selected, Helias tells edie, as they are deemed to be dealing with ‘chronic’ water stress by scientists and are listed as such in the World Resources Initiative’s (WRI’s) aqueduct atlas.

Six restoration projects supported by P&G will take place within the Bear River Basin catchment, which serves Utah and Idaho, to name one of the chosen regions. There, decades of warming temperatures, over-development and over-abstraction by businesses have been compounded by high residential water use due to low water prices, depleting this ecologically unique catchment to the extent that water stress is now classed as ‘severe’ by local authorities.

Product manufacturing and product use are the two water use ‘hotspots’ in P&G’s value chain, life-cycle analyses have confirmed, with 100% of products requiring fresh water to manufacture and 70% requiring water to be added by customers in use (think of shampoos, dish soaps and laundry products). Calculating water use at these points will be essential to ensuring that restoration levels are adequate. It bears noting that the business will seek to restore more water than consumed at the consumer level in two locations, to begin with – Los Angeles and Mexico City – before making additional commitments. These two cities account for more than half of the total water consumption in the use of branded products across all 18 target areas.

A word of caution. Helias noted that water restoration is not a simple matter of accounting. There is a “wide range of solutions” which can be implemented, she said, “from protecting existing ecosystems, to replenishing groundwater, to reducing the amount of water diverted from the watershed, to improving water quality”. The resulting benefits will vary depending on a range of context-specific factors

“Depending on the landscape, not every solution will be relevant,” Helias elaborated. “This is why we are working with experts on the ground, communities, civil society and other corporations. Which solutions are best can be very different to what we first expect when starting a project. You may think a big nature conservation effort is needed, but this is not always the case.”

Indeed, what would the use of investing in a major nature restoration scheme be, without efforts to stop future over-abstraction or over-development which would damage the ecosystem?

Getting your own house in order

For Helias, who spoke with edie via video call from her home in Switzerland, it is important to highlight that setting ambitious restoration goals is predicated on reducing water consumption and maximising efficiency in the first instance. She visualises the firm’s water strategy as having “three prongs” – “reducing our own footprint, enabling others to reduce theirs and partnering for wider impact”. Restoration falls into this third category.

Regarding the first ‘prong’, P&G recorded a 25% improvement in water efficiency in manufacturing between 2010 and 2021. Projects which contributed to progress included the scaling of water recycling, with 3.1 million litres of water having been recycled in-house in 2021. The aim is to increase this to five billion litres by 2025.

As already noted by Helias, reducing the amount of water used by P&G’s consumers will also be critical if the company wants to make a material impact on water stewardship across its whole value chain. The business is one of three – alongside Suntory and General Mills – to spearhead the private sector’s involvement in WRI’s collaborative effort to develop a science-based targets framework for water targets, as with the framework for business emissions.

Work to quantify the exact water footprint of customer-level product use is ongoing, Helias said, as is work to finalise the WRI’s framework. She was unable to confirm when the framework’s broader launch is happening but stated: “Right now, I think we have enough; we feel very good about the goals, we know how to track progress, we have an underlining methodology that is very solid. Hopefully, this will be in line with the final methodology when it is released. We don’t want to let perfection get in the way of progress.”

The pilot methodology is based on the WRI’s existing Volumetric Water Benefit Accounting framework, with additional requirements being proposed and developed by a wide range of other stakeholders including WWF and Environmental Resources Management.

Coming back to the need to reduce consumer water consumption, P&G’s projects in Los Angeles and Mexico City are not its first. The firm announced in 2020 that it would participate as a founding member in the 50L Home Coalition – a public-private collaboration with the aim of reducing domestic water use in water-stressed urban regions to 50 litres or fewer, per home, per day. This scheme is coupling communication with consumers with product innovation (for example, concentrated and solid-format products), regulatory, policy and infrastructure engagement.

The Coalition has continued to expand over the 18 months. Notable additions have included Mayor Kate Gallego of Phoenix, Arizona, becoming chair, and new corporate support from the likes of Ikea and Grundfos.

Context-based approach

In the past, many corporate water strategies had been sweeping, promising a time-bound, numerical reduction in either water intensity or absolute water use on a global scale. As explained, it has been challenging to determine whether these targets have been science-based or simply based on what a business deems achievable or easy to communicate.

But the dial is shifting towards a more nuanced approach. P&G has described its approach as the “first-of-its-kind”, but several other businesses with high water footprints have been setting context-based targets for reducing water consumption and investing in restoration in recent years. Among the businesses targeting water-stressed areas as a priority are brewers Diago and AB InBev, and fashion firm Levi Strauss.

The need for science-based business approaches to climate has become ever more broadly recognised. At the time of this feature’s publication, 3,169 companies are registered as taking some kind of action through the Science-Based Targets Initiative (SBTi).

For Helias, as businesses look towards extending this framing and adopting science-based approaches to water stewardship, awareness is growing in boardrooms that “water is not like climate – it’s a very local issue”.

This will have already been crystal clear to large, water-intensive businesses with value chains in the world’s extremely water-stressed areas, which are home to a quarter of the global population. One example: Mexico City is sinking at an alarming rate of 50cm each year, causing fractures to the ground. The primary cause is the poor planning of the Grand Canal in the first instance and its subsequent over-exploitation, with the issue being made worse due to climate change.

It is arguably somewhat tragic that it has taken the crystallisation of physical water risks to this extent to really accelerate collaborative action. Nonetheless, there is concensus in the environmental science space that there is still a window of time in which to tackle the key causes of water stress, improving outcomes for people and nature in the short term and creating the foundations for a sustainable future.

This window is closing fast and action needs to be collaborative and joined-up. Local authorities do not necessarily have all the funding needed to act alone, and neither will NGOs, academics or citizens’ groups. Businesses can bring capital and resources, but may not have in-house expertise and may be distrusted by citizens if they act alone.

“It’s very important that we have both the private and public sector on side,” Helias argued.

“Context-based approaches mean that, by definition, we’ll be working with new types of stakeholders that we do not usually work with – local governments, on-the-ground experts and so on. They will be very much regarded as experts on local challenges.”