Why You Should Worry about Water in Your Supply Chain

What is the next critical environmental supply chain issue? Water. The linkage between water and business was a hot topic at the August 2009 Stockholm World Water Week. Bjorn Stigson, president of the World Business Council for Sustainable Development, singled out supply-chain water use for specific attention. As fresh water becomes more scarce and supplies uncertain, how companies use water and where it comes from will increasingly affect their business risks and opportunities.

Consider how global brewer SABMiller is evaluating its supply-chain water use. In August, the company, in collaboration with the World Wildlife Fund, released a landmark report titled Water Footprinting: Identifying & Addressing Water Risks in the Value Chain. The study evaluated the water footprint of the entire value chain for SABMiller’s beers in South Africa and the Czech Republic, from crop cultivation and processing to brewing and distribution, while highlighting both direct and indirect water use. As one would expect, the footprint is dominated by the agricultural component. SABMiller now understands which parts of its supply chain could be threatened by water scarcity or poor water quality in the future, and is better positioned to develop strategies to address these challenges.

Supply chain water footprinting is not just confined to the beverage sector. Borealis (a plastics materials provider) and Uponor (a plumbing and heating systems company) have initiated a study of the water footprint in the plastics value chain, from raw materials to plumbing and water systems installed in a home. The goal is to reduce resource use in product design and manufacturing in addition to developing water-efficient products.

Although the process and protocols for determining a company’s water footprint are not as well developed as carbon accounting, procedures are quickly being refined and multinational companies are making business decisions based upon preliminary evaluations. Energy, water and carbon footprinting across the entire supply chain are essential in evaluating business risk. The time to start measuring the amount of water in your supply chain is now, before water becomes a business constraint to operation and growth.

Is your company evaluating its supply chain water use?

William Sarni is founder and CEO of DOMANI and has 30 years of experience in providing sustainability and environmental consulting services to private and public sector enterprises.