Water
Business Case
Financial resilience
Investing in water efficiency reduces costs beyond the price of the water itself, including treatment, purification, heating and wastewater processing. Companies supporting supplier water efficiency programs consistently report meaningful reductions in water-related operating costs.
Legal and regulatory compliance
Companies with verified water stewardship practices and supplier engagement programs are positioned ahead of requirements and face less compliance risk.
Operational continuity
Stable sourcing communities and sustainable livelihoods
Strategy & Planning
Assessment
Identify procurement categories and sourcing regions with elevated water risk, using tools such as ENCORE, WWF Water Risk Filter and WRI Aqueduct, based on factors such as water stress levels at supplier operating locations, sector water intensity, supplier dependency on shared or over-extracted water sources and history of water-related violations or incidents in the region.
Conduct detailed water risk assessments for priority sourcing regions, evaluating basin-level water stress, supplier water intensity, shared water resource dependencies and the gap between current supplier water practices and the expectations set in your water stewardship policy. For supply chains sourcing from water-stressed regions with indigenous or local community presence, verify that supplier water extraction does not infringe on customary community water rights and that FPIC has been obtained where required.
Conduct comprehensive water risk and opportunity assessment across all procurement categories, identifying remaining gaps in water stewardship coverage and basin-level dependencies.
Policy
Establish water stewardship policy covering basic expectations for efficient water use, water quality and pollution prevention.
Establish prohibited practices list covering harmful water practices for suppliers (e.g., untreated discharge, illegal extraction, depletion of shared aquifers) and require water‑balance transparency for suppliers.
Commit to sourcing only from suppliers meeting verified water stewardship standards and require suppliers to demonstrate water positive or water neutral outcomes in priority basins.
Targets
Set targets for percentage of suppliers in water-intensive or water-stressed categories assessed on water management practices.
Set target for percentage of sourcing from water-stressed regions covered by water stewardship programs and water‑intensity reduction targets (e.g., m³ per tonne product) per category.
Set target for 100% of suppliers in water-stressed regions to have context-based water targets.
Supplier Selection
Screening
Include water management questions in RFIs such as the below, excluding suppliers with recent serious water violations (illegal discharge, permit breaches, contamination incidents):
- existence of water management policy or commitment
- water sources and withdrawal volumes
- water use efficiency measures
- wastewater treatment and discharge practices
- operations in water-stressed basins
- third-party certifications held (e.g., AWS)
- recent violations or non-compliance incidents related to water
- grievance mechanisms for reporting water-related concerns
Request detailed information on water practices relevant to sourced products (e.g., irrigation methods, water recycling rates, effluent quality, water balance statements).
Require third-party certification (e.g., AWS), independent audit results or source‑verified water‑stress maps, linking each facility to basin conditions, demonstrating water stewardship as a prerequisite to apply for RFP.
Selection
Give preference to suppliers with water stewardship certifications or programs.
Score bids based on water performance, with higher scores for suppliers:
- exceeding regulatory requirements
- demonstrating third-party audited water management systems
- engaging with water conservation programs
- operating in jurisdictional or landscape programmes (regions tracking water at scale)
- operating at zero‑liquid‑discharge (ZLD) or with closed‑loop systems where category‑appropriate
Select suppliers investing in water recycling, rainwater harvesting or closed-loop systems.
Contracts
Include contractual clauses requiring compliance with basic water stewardship practices and prohibiting water-related violations.
Include clauses on:
- alignment with water-recycling minimum thresholds (for high-impact suppliers)
- notification to buyer of any water-related violations, permit changes or incidents
- buyer right to audit water practices and terminate for serious water breaches
Require the following:
- water improvement plans with measurable targets
- requirements for suppliers to cascade water‑requirements to Tier‑2/Tier‑3 suppliers
- independent water‑quality testing annually, conducted by accredited laboratories
Supplier Engagement
Goal Setting
Communicate water stewardship expectations and policy requirements to relevant suppliers and establish joint action plans with suppliers for achieving water improvement plans.
Set specific, time-bound water improvement targets with suppliers, such as reducing water consumption intensity by defined percentages, achieving wastewater treatment standards, implementing water recycling systems or obtaining water stewardship certification.
Develop multi-year water transition roadmaps with strategic suppliers and set goals with Tier 1 suppliers on cascading water stewardship requirements to their own suppliers.
Capacity Building
Share water management best practice guidelines and resources with suppliers.
Provide training on water stewardship fundamentals, including efficiency, pollution prevention and basin awareness.
Provide advanced training to suppliers on context-based water target setting, basin-level stewardship and building water management capacity within their own supply chains.
Data
Support suppliers with collecting baseline water data to understand current practices and exposure to water stress, including:
- water‑dependency mapping, identifying critical water inputs across processes
- total water withdrawal volumes by source (surface, groundwater, municipal)
- water consumption and discharge volumes
- wastewater treatment methods and discharge quality
- water recycling and reuse rates
- water stress level at operating locations
- any history of water-related violations or incidents
Establish regular water data reporting from suppliers on agreed metrics (withdrawal, consumption, discharge, intensity).
Create shared platforms for water monitoring data and benchmarking across supplier base.
Certifications
Share information on relevant water certification pathways and their requirements.
Support suppliers with achieving and maintaining recognized water certifications.
Require certification (AWS or equivalent verified water stewardship standard) for strategic suppliers in water-stressed regions and support Tier 2 suppliers in achieving certification. Where AWS certification is the Advanced-level target, support suppliers in beginning the basin-level stakeholder engagement processes required for certification, including engagement with local communities, water authorities and other basin stakeholders.
Advisory
Provide guidance to suppliers on identifying water risks in their operations and basic water efficiency improvements, such as leak detection and repair programs, water metering and monitoring systems, wastewater treatment upgrades, rainwater harvesting and water recycling in production processes.
Provide technical expertise on water efficiency improvements and treatment technologies relevant to supplier operations.
Consult and work with suppliers on embedding water stewardship into their own procurement practices and supplier engagement programs.
Financial Support
Fund supplier access to water assessment tools, efficiency improvement resources and water stewardship training materials.
Finance projects to restore and build resilience in local aquifers and watersheds or -co-invest in supplier water infrastructure improvements (e.g., treatment systems, recycling equipment, irrigation upgrades).
Provide commercial incentives to suppliers for improvements in water conservation performance, such as price, volume, duration, preferred supplier status or premium payment models linked to verified water improvement outcomes.
Audits
Require suppliers to complete self-assessment questionnaires on water management practices, covering:
- water monitoring practices (leak detection and repair, tracking of water efficiency, regulatory compliance)
- water withdrawal sources and extraction practices (including overextraction)
- water consumption volumes
- water discharge practices and volumes
- wastewater treatment practices, hazardous material management and water pollution prevention
- water recycling and replenishment practices
- any history of water-related incidents or violations
Conduct supplier water assessments or audits to verify practices and identify improvement opportunities.
Implement third-party audit programs covering water use, discharge quality and basin impact.
Project Partnerships & Innovation
Launch pilot projects with suppliers to trial water-saving technologies or practices.
Scale pilots to create joint projects to monitor and upgrade equipment to improve water use efficiency, e.g. by implementing closed-loop water systems or work with partners on watershed restoration or replenishment projects in shared sourcing basins.
Partner with industry groups to run supplier innovation challenges for water efficiency, recycling or pollution reduction solutions.
Continuous Improvement
Metrics
Track the following:
- percentage of sourcing / spend in categories with significant water risks or water-stressed regions
- number / Percentage of suppliers with formal water management policies
- supplier participation in buyer water conservation programs
Track progress indicators such as:
- aggregated supplier water impact (water consumption by area, water recycled, water stored) by quality and quantity
- number of suppliers engaged in water improvement programs
- aggregated supplier progress against water reduction targets
Track indicators such as:
- water outcome improvements over time across supplier base (absolute reductions, intensity improvements)
- water replenishment or restoration volumes achieved through supplier partnerships
- percentage of strategic suppliers with cascaded water stewardship requirements
Scorecards
Introduce basic water criteria into supplier evaluation forms covering water policy, efficiency measures and compliance history.
Integrate water KPIs into supplier performance reviews and require corrective action plans for suppliers with water audit failures or incidents.
Weigh water performance in supplier scorecards covering water consumption intensity trends, recycling rates, discharge quality, certification status, corrective action completion and basin-level stewardship participation, with top performers receiving preferential weighting in tenders and bottom performers required to submit improvement plans.
Impact Verification
Gather feedback from suppliers on effectiveness of water engagement programs and feasibility of water stewardship requirements.
Assess whether supplier engagement initiatives are delivering measurable water improvements across priority sourcing regions, based on metered water data and basin-level water stress indicators (e.g., WRI Aqueduct scores, AWS basin assessments) to provide independent verification of water improvement claims.
Verify water claims through independent audits and metered data and calculate water-related risk reduction and cost avoidance from stewardship investments.
Sources consulted
- https://ceowatermandate.org/toolbox/
- https://www.youtube.com/watch?v=W2BPV3HIRQs
- https://spp.earth/wp-content/uploads/2025/01/Bemari-Toolkit-Day-0-Business-Wate…
- https://wwf.panda.org/wwf_news/?5301466/WWF-guidance-for-companies-on-Net-Posit…
- https://www.ceres.org/resources/reports/global-assessment-private-sector-impact…
- https://wwf.panda.org/?9851966/Advancing-water-stewardship-through-supplier-col…