Dive Brief:

• A new initiative launched Thursday aims to develop standardized guidance for how companies should assess and manage water risks across their organizations.
• The initiative is led by sustainability standards organization SCS Global Services, World Resources Institute, World Wildlife Fund and the CEO Water Mandate, according to an April 30 press release.
• The goal of the initiative is to create a shared language and methodology for how companies measure and manage water resource risks and impacts across their company. While water-related frameworks exist, they don’t share a language which limits comparability.

Dive Insight:

The groups are developing the “Corporate Guidance for Assessing Water Scopes 1-3 in Value Chains” to help manage growing water stress on the planet. Over half the global population — around 4 billion people — live under “highly water-stressed conditions” for at least a month each year, the World Resources Institute found in 2023. WRI estimates that $70 trillion will be exposed to “high water stress” by 2050, or approximately one-third of the global gross domestic product.

The goal is that final guidance would connect to existing disclosures like those from CDP (formerly Carbon Disclosure Project) and the Alliance for Water Stewardship. The group was formed, in part, because of the recognition of the gap in standardized language to measure corporate water impacts, SCS Global Services’ Executive Director of Standards and Assurances Victoria Norman said in an interview this week.

“There is a gap in the landscape of reporting frameworks,” Norman told ESG Dive. “Everyone is reporting on different things using the same terms [that mean] different things or using different terms to mean the same thing, making comparisons impossible and making tracking progress and performance impossible as well. And we're at a time in our climate crisis where we need results.”

The group plans to develop the guidance during the next 18 months, with a plan to open a public comment period in month 12, according to the release. The coalition plans to release the final guidance in the fourth quarter of 2027.

“For many companies, the greatest water risks and impacts lie in their supply chain or in the end use of their products, yet attention remains stubbornly focused on direct operations,” WRI Director of Corporate Water Engagement and Acting Global Water Lead Sara Walker said in the release. “This guidance will help companies identify and act on the most effective levers to unlock positive water impacts — and greater resilience — across the value chain."

The name “Water Scopes 1-3” is designed to use similar nomenclature as the Greenhouse Gas Protocol, but Lauren Enright, water stewardship program manager for SCS Global Services, told ESG Dive that the group is not looking to create a new “protocol” or “standard” for companies to comply with. The goal is to develop a “foundational block” for water stewardship frameworks and create “shared understanding for communication and for action and for performance monitoring,” Norman said.

However, the group is using similar language to the GHG Protocol because there is a growing understanding among C-suites and stakeholders of what those scopes mean in terms of their operations. Scope 1 for water would refer to direct water use within operations, scope 2 would look at the intersection of water and energy use and scope 3 would refer to water risks and impacts within the supply chain, Enright said.

“It's really about raising water stewardship to a level of investor accountability, so it trickles down into all the stakeholders,” Enright said.