By 2030, the UN predicts demand for water will outstrip supply by 40%, with nearly two-thirds of all water consumption going into producing ingredients for corporate supply chains, from food to chemicals. As water scarcity emerges as the primary impact of climate change, it now presents profound challenges across multiple sectors, from agriculture to energy production.
This finite resource must now take a more central role in corporate sustainability discussions. Companies must accelerate action in water stewardship; beyond sustainability concerns, water scarcity and pollution can also significantly impact profits.
Corporate acknowledgement, then action
Given the central role that water plays in all our lives, any company that compromises its availability or cleanliness risks serious reputational damage. Non-governmental organisations, such as Surfers Against Sewage and Greenpeace, regularly compile reports on water-related issues and publish company-level data. Mandatory disclosures are also approaching, such as the European Union Corporate Sustainability Reporting Directive (CSRD) and the associated European Sustainability Reporting Standards (ESRS) on Water & Marine Resources.
Voluntary actions are an effective way to prepare for these upcoming compliance obligations, demonstrating a proactive approach in this high-profile area. Last year, Tetra Pak was among 4,815 companies disclosing water-related data through CDP, the world’s largest global water disclosure mechanism. This was up 23% since 2022, in line with the private sector’s increasing acknowledgment of its critical role in achieving a water secure world.
A holistic response
Understanding the scale of the water problem requires consideration of the entire supply chain, as evidenced by the fact that companies which include their supply chain in risk assessments are seven times more likely to report water-related risks.
As with all strategies, target setting is fundamental to a forward-looking action plan. Third party frameworks, such as the Science-Based Targets Network’s (SBTN) goals for nature, allow companies to publicly demonstrate their long-term commitment to water security. Transparent targets must be paired with regular audits, to promote both corporate action and public trust.
Many large companies are already taking steps in this direction, using the latest technology to reduce their reliance on freshwater supplies. PepsiCo’s harnessing of these technologies – such as capturing vapour released during cooking and converting it into drinking-quality water - has contributed to achieving water efficiency in high water risk areas ahead of the company’s target date.
Truly understanding water usage is a complex endeavour. Companies must create holistic water management strategies to address highly localised water issues, recognising that water resources are often managed in a fragmented way.
In working with Quantis to assess water risks, Tetra Pak found most of its water consumption came from upstream purchases. This finding helped to form the company’s ‘Approach to Nature’ – a robust framework outlining Tetra Pak’s contribution to halting and reversing nature loss and enhancing water security. Importantly, the approach also includes specific goals to reduce negative impacts on local water resources and to address shared water challenges in at-risk basins. In doing so, these localised measures help tackle global water security.
Collaboration and innovation
Progress on more established sustainability issues, such as the drive towards net zero, has shown the importance of collaboration. These lessons are being applied to water with initiatives such as The Water Resilience Coalition, which brings together 35 global companies aiming to push water resilience to the top of corporate agendas. To date, there are over 20 collective action projects underway to build water resilience in 15 water-stressed river basins.
As an end-to-end solutions provider, Tetra Pak is well placed to work with manufacturers to reduce their water usage, resulting in both environmental and financial benefits. For example, Liquats Vegetals, a plant-based beverage producer in Catalonia, installed a water filtering station for filling machines and saved 12.9 million litres of water in 2023.
Deploying new technology can also help manufacturers step up to the challenge. The Internet of Things can equip factories with smart sensors to continuously monitor and report on water usage, allowing manufacturers to quickly identify leaks and inefficiencies. While not yet widespread, a trial of this technology in a UK beverage factory led to an 11% reduction in daily water usage.
First mover advantage
Innovating to reduce reliance on natural resources also creates business advantages. Unilever’s ‘Sunlight’ dishwashing liquid, which uses much less water than standard washing liquid, has outpaced category growth by more than 20% in water-scarce markets. Similarly, Nestlé, with funding from the Swiss Agency for Development and Cooperation, has trained around 50,000 farmers on best irrigation practices in Vietnam, saving 50 million cubic metres of water annually and generating over US$8 million in the local economy of smallholder coffee growers.
Progress towards global net zero has picked up speed, but it has taken many years to reach this point. We must learn from this: we do not have the luxury of time when it comes to water. Indeed, there is a cost to inaction, with research highlighting that the cost of mitigating supply chain water risk is almost three times cheaper than that of impact.
Water security has not yet reached the stage of maturity that sustainability focus areas such as climate and biodiversity have, in terms of both commitments and actions. While these problems are by no means ‘fixed’, the private sector must now make room in its sustainability strategy for water. The clock is ticking, and the cost of delay – both financial and environmental – is too high to ignore.
In other news, AB World Foods has recalled several batches of tahini due to the presence of Salmonella.
