Chara Sifaki from CDP and Allen Townsend from WWF, who lead the Science Based Targets Network’s (SBTN) Freshwater Hub, address some of the common questions about freshwater science-based targets for companies, soon to be released as part of the first science-based targets for nature.
Before we dive in, can you first define freshwater science-based targets for companies?
The science is clear. Overexploitation, climate change and mismanagement of resources have resulted in a global water crisis. The Global Commission on the Economics of Water just released a report advising supply will soon exceed demand with the prospect of a 40% global shortfall in freshwater supply by 2030. More and more companies are seeing the business value in engaging in corporate water stewardship to address their impacts on freshwater and manage the significant associated risks.
As part of science-based targets for nature, the freshwater targets are specific, measurable and time-bound targets that companies can set to reduce their impact on freshwater resources. These targets are informed by the latest science and are designed to help companies contribute to global sustainability goals, including the UN SDGs and Global Biodiversity Framework.
What is covered in the first version of freshwater SBTs for companies, and what will be included in future releases?
The first version of freshwater science-based targets helps companies address some of the critical impacts they have relating to freshwater quantity and quality, including surface water flows and groundwater levels (if local models and thresholds are available), along with nutrient pollution (phosphorus and nitrogen). However, toxic chemicals and other water quality parameters and groundwater levels derived from global models are not currently included but will be in future releases.
Through these targets, corporate actions to maintain or improve freshwater quantity and quality will effectively support biodiversity and nature’s ability to provide essential services.
Biodiversity and societal needs are also considered during the target-setting process, such as accounting for the needs of species in terms of environmental flow requirements and setting water quality thresholds to avoid impacts on freshwater species and ecosystems. In sum, while biodiversity and nature’s contribution to people do not appear explicitly as part of the freshwater target setting methods, they are embedded implicitly throughout.
One important point to note is that this version of freshwater science-based targets applies only to a company’s direct operations and upstream value chain. The downstream part of the value chain cannot currently be subject to target-setting in this version, as guidance to assess the impact of downstream activities is still under development by the Freshwater Hub and SBTN. However, we anticipate future iterations will include this aspect.
How have the freshwater SBTs been developed and what have been some key insights?
SBTN’s Freshwater Hub is a collaborative effort led by CDP and WWF, along with Pacific Institute, World Resources Institute, and The Nature Conservancy – authors of some of the leading frameworks, tools, methods and guidance for water impact assessment, management, and reporting. The hub is also supported with technical expertise from Limnotech, Earth Genome, Future H2O, and Quantis.
In addition, water experts have participated in the Freshwater Hub Technical and Practitioner Advisory Groups, provided technical advice, and reviewed the freshwater guidance. General Mills, Procter & Gamble and Suntory piloted the methods in various parts of their value chains in 2022.
Through the corporate pilots, we uncovered key insights regarding feasibility related to data availability and stakeholder consultation. First, we learned that these methods are best suited for companies that know or can estimate the location of their direct operations and upstream value chain activities. This information is required so that pressures on water quantity and quality in specific basins can be identified. Regarding stakeholder consultation for model selection or development of a local model, it was apparent during the pilots that the process can vary basin by basin depending on data availability. To support local stakeholder engagement which is critical to ensure companies are both setting and implementing effective and equitable science-based targets, SBTN will be providing complementary stakeholder engagement guidance (along with the version 1 target-setting methods) to include human rights protections and engagement and consultation with Indigenous people and local communities.
The insights from these pilot projects helped improve the target-setting guidance, which was further reviewed by over 40 SBTN partners and SBTN’s Corporate Engagement Program members during an internal technical consultation and by over 60 organizations during the public consultation, both in 2022.
Overall, the multi-stakeholder, multi-year consultation process has helped us balance scientific rigor and feasibility.
We have sought to elevate the locally relevant science, expertise and models while recognizing that global models may represent the best available science for companies to use in a given location at present.
Can you put this first release of freshwater targets in context and explain how they relate to other existing guidance, initiatives and standards that help companies with their water stewardship?
In response to the global water crisis, the growing amount of guidance and frameworks aimed at helping companies reduce their impacts and manage their risks could potentially demobilize corporate action, the opposite of what we are all intending.
One of our core design principles is to ensure that our methods and guidance are consistent with best practices in water stewardship and complementary to existing initiatives and standards. Our cross-partner team collaborates closely with the Taskforce on Nature-related Financial Disclosures (TNFD), Alliance for Water Stewardship (AWS), Global Reporting Initiative (GRI), and other partners. By working together, and coalescing around a common set of guidelines we can collectively endorse, we intend to enable more companies to more efficiently achieve their water stewardship goals. By enabling companies to move quickly through their water stewardship journey, together we can increase the corporate sector’s contributions toward a more sustainable and resilient future for all.
With this in mind, SBTN and AWS, have also taken the initiative to help orient companies on the landscape of water target-setting approaches and provide guidance for engagement across these approaches. As a result of this effort, we have produced a roadmap for companies to help them engage with each corporate water target-setting approach along their water stewardship journey. This roadmap was previewed at the UN 2023 Water Conference during our official side event – “Setting water targets: a roadmap for companies” – on March 23, 2023.
If a company already manages its water footprint through targets, why should it set a freshwater science-based target?
While setting water targets is a good first step for a company to manage its water footprint, science-based targets offer additional benefits.
By definition, these targets are designed to push companies beyond business-as-usual and drive innovation and accountability in their water stewardship journey.
The SBTN approach ensures that companies first take a step back to comprehensively assess and prioritize their environmental impacts across freshwater, land, ocean and biodiversity.
If their material impacts include freshwater, by setting freshwater science-based targets, a company can be sure that its water management efforts are aligned to global sustainability goals such as the Global Biodiversity Framework and are based on credible and evidence-based science. Companies setting freshwater science-based targets can be more confident that they are doing enough to address their contributions toward water-related impacts.
In addition, freshwater science-based targets may be more ambitious than other water targets and help a company drive significant progress toward reducing water use, improving water quality and building business resilience. Our guidance specifies the amount of the company’s direct operations and upstream value chain activities that must be covered through spatially explicit targets in priority basins to support biodiversity and people. They also have the potential to enhance water management and security and facilitate collective action.
Investors, customers, and other stakeholders are also increasingly interested in a company’s sustainability efforts. Setting credible and ambitious freshwater targets can help companies demonstrate their commitment to sustainable water management.
Overall, setting freshwater science-based targets can help a company achieve a more comprehensive and impactful water management strategy that contributes to the larger sustainability agenda, drives innovation, and strengthens its risk management, including reputational and regulatory risks, all of which contribute towards a more resilient business.
Why does the initial freshwater target-setting methodology focus on individual company actions? Isn’t collective action across basins required for target attainment?
Ultimately, collective action is necessary in order to achieve the environmental outcomes that SBTs relate to: water security and improved water quality for biodiversity and people. However, this target setting methodology is designed for use by companies, and assumes that target setting will occur at the level of an individual company.
Companies are expected to set targets at the scale at which they are able to make decisions. The process of setting and achieving these individual targets is designed to unlock action throughout the basins and economic systems that companies operate within. In conducting their initial impact assessments and collecting baseline data to set targets, companies are required to work with upstream actors in their supply chain, and are recommended to engage suppliers in target setting directly when they are better suited to manage ground-level impacts.
To meet their targets, companies will need to work with basin-level stakeholders as allies for successful implementation and enduring change on the ground.
The complementary stakeholder engagement guidance we will be providing as part of the first release will help companies build on existing environmental knowledge, set targets that are aligned with local needs, and establish the basis for a collaborative relationship during target implementation and beyond.
In subsequent releases, SBTN’s “Act” and “Track” steps – the final two steps in our 5-step target-setting framework – will provide detailed guidance on implementing targets and tracking progress to achieve targets. These will provide practical response options for companies that are aligned with existing approaches, metrics, and indicators that are sensitive to actions both at the company and basin level, facilitating collective action in basins where many companies are co-located.
Any final words?
The Earth Commission will soon be releasing ground-breaking science on the Earth System Boundaries: the scientific limits that define a safe and just future for both nature and people. This is the urgent and necessary direction of travel that all actors need to drive towards and as part of our work within the Science Based Targets Network we are helping to equip companies with measurable, actionable and time-bound freshwater targets to do so. When companies set science-based targets on freshwater quantity and quality they will align with both the science and actions needed to move towards staying within these safe and just boundaries.
The freshwater targets will also be available in a few weeks as part of the first release of science-based targets for nature. For a preview of the freshwater targets and to understand how they fit within the broader corporate water stewardship journey, you can view the recording of our official side event on March 23 at the UN 2023 Water Conference in New York.