Science and context: Inside Diageo's refreshed Water Blueprint
With water and sanitation at the core of sustainable development, edie speaks with one of the world's largest drinks businesses to explore how it is accelerating progress towards achieving Sustainable Development Goal (SDG) 6: Clean Water and Sanitation for All.
The urgency of the global water crisis has never been clearer: the UN now estimates that 1.2 billion people – one-fifth of the world’s population – are affected by water stress. The Global Water Institute, meanwhile, estimates that 700 million people in 43 countries are suffering the effects of water scarcity, with UNESCO predicting that this figure will rise to 1.8 billion by 2025 if no action is taken.
The good news in light of this bleak picture is that the business community seems to be taking heed of the scale of the problem, with new research by climate disclosure organisation CDP revealing a trend towards business leaders stepping up to the challenge of tackling water issues. That research found that 2,025 of the world’s largest corporations – representing more than $20.3trn in market capital – are now reporting their water footprint through CDP, up from 1,200 corporates three years ago.
Diageo is one of the 2,025. The alcoholic beverage giant, whose brands include Smirnoff, Gordon’s and Guinness, is, in fact, one of the world’s most proactive and purpose-driven corporations when it comes to tackling water scarcity and improving efficiencies.
The London-based firm, which has facilities in all six inhabited continents, has pledged to improve water efficiency across its operations by 50% by 2020, and to return 100% of its wastewater to the environment safely by the same deadline. It has also set a 2020 goal of replenishing the amount of water used in its final products across its water-stressed areas of operation, whilst aligning its overarching sustainability strategy with the SDGs.
Speaking exclusively to edie from the World Water Week Conference in Stockholm last week, Diageo’s head of water, environment and agriculture Michael Alexander explained that the collective business appetite for acting on water challenges had grown “exponentially” over the past five years as the issue has become so “business-critical” across industry.
“We have spent many years improving our reporting, improving our processes and making commitments to collaboration, but there is a strong feeling in the corporate sustainability sector that now is the time to really take action on water,” Alexander said. “None of us are big enough in our own right to do it alone, and we know there is now a very high expectation from business in this area, so there is a strong feeling of urgency to collectively respond to SDG 6.”
Alexander’s emphasis on the role of collaboration is hardly surprising, given that Diageo has become widely known for its work in collaborating with local authorities, governments and even rivals in order to drive sustainability action. The company is one of the founding members of the Business Alliance for Water and Climate Change, for example, and has been working in partnership with non-profit WaterAid to support global policies and practices that promote access to clean water. Moreover, its collaborative Water of Life programme has provided 10 million people in Africa with access to clean water and sanitation since its launch in 2007.
Alexander’s affirmations come at a time when Diageo is reaffirming and realigning its own commitment to water stewardship. Having recently invested in three new water recovery and recycling programmes at its facilities in India – a move that has already led to a 35% reduction in water extraction – the company this summer updated its Water Blueprint.
The update was the first to be made since the Blueprint launched in 2015, with the refreshed document placing an even greater focus on water and gender and the effects of climate change on water. The new strategy also notably includes a pledge to take a “scientific, context-based approach to water stewardship”, using independently collected and analysed data to prioritise action at breweries and distilleries in water-scarce regions.
For Alexander, the update to the Blueprint is not only a reflection of how water best-practice has changed in the past three years, but it also serves to highlight how action on water is being embedded into Diageo’s core business strategy.
As for the inclusion of those terms “scientific” and “context-based”, Alexander explained that Diageo is beginning to map different trajectories and targets for its 150 breweries and distilleries based on which water catchments they extract from, and which environmental challenges they face. Indeed, the firm has 41 facilities in water-stressed areas, producing a third of its product by volume annually.
“’Science-based’ for water simply can’t be the same as for carbon, because context is key,” Alexander said. “What is sustainable for a facility in Scotland – which is not classed as a water-stressed area – will be widely different from what best practice looks like for one of our breweries in Kampala.”
Under the new science-based water management approach, the water use trajectories of each facility will be mapped using independently collected data, with a dedicated team of analysts, hydrologists and other experts measuring incoming and outgoing water in the catchment area and accurately tracking how much is accounted for by the company’s operations. The approach will also see researchers monitor key associated factors such as biodiversity, water pollution and sedimentation, with Alexander claiming that data teams will be working “continuously” to improve accuracy and standardisation.
“Data, processes, standardisation and codification across our business is really fundamental to ensuring efficient and sustainable operations – and water is no different from anything else,” Alexander asserted.
Putting a price on water
Diageo’s revamped and refreshed approach to water stewardship is being seen in similar forms across industry, as a growing number of businesses seek to find more innovative ways to build the business case for tackling water stress and sanitation issues. To that point, CDP recently found that 53 large businesses within its reporting cohort have placed an "internal price on water" to justify funding decisions. Those to have taken such a step – including Diageo – had developed methods of accounting for costs associated with water that are typically absent from pricing and decision making.
Several think tanks have concluded that such a move to place an internal price on natural resources such as water should be combined with conservation approaches to align business actions and environmental protection. Indeed, that has been the case for Diageo, which as an example recently invested £4.4m in a wastewater treatment facility at its Uganda brewery in Kampala, enabling the company to return higher-quality water to nearby Lake Victoria than that which it extracts. Alexander claims that investment has proved to be a “win-win” for the company and the environment, enabling Diageo to generate its own biogas while improving sanitation for the 30 million people living within the catchment area.
Again, it seems that other corporates are making similar headway in committing equally sizeable investments to drive sustainability beyond their own operations, with CDP estimating that large businesses collectively invested more than $23bn in water security measures last year.
Questions on whether this corporate action will be enough to meet the overarching aim of SDG 6 remain, however, with Global Water Intelligence (GWI) estimating that total worldwide investments into water infrastructure must reach £342bn ($449bn) each year between 2018 and 2030 for the Goal to be achieved.
Nonetheless, Alexander remains optimistic. He notes a growing trend towards corporate transparency on the issue, compounded by a mounting desire to collaborate with other stakeholders to create maximum impact. These trends are evidenced by the fact that 145 companies have now signed the UN Global Compact’s CEO Water Mandate, while 49 are members of the Business Alliance for Water and Climate.
“Five years ago, people were more reticent to share the bad news along with the good news, Alexander said. “But I think there’s a real feeling of honesty and transparency now – gone is the time of everyone talking about how brilliant their company is, which is where I think we have made big progress,” he concludes.
“Business can’t be seen to be in control of everything around the partnership on a watershed, because that’s not what water stewardship is about. Instead, it’s appropriate for it to be multi-stakeholder and independently managed.”
edie recently rounded up seven ways that the business community is progressing water stewardship efforts worldwide. Read that article in full here.