Water Risk in Agricultural Supply Chains
Voluntary agricultural sustainability standards are one key approach that companies have employed to deliver on sustainable sourcing commitments, including addressing water concerns. However, the degree of coverage on water issues by various agricultural sustainability standards varies considerably.
Indeed, traditionally, many agricultural sustainability standards have restricted water criteria to efficient use and minimizing both soil erosion and nutrient runoff. As the collective understanding of water stewardship has emerged, there has been a growing appreciation that it takes more than on-site action to adequately mitigate basin and operational water risks.
This new report from WWF and Edeka, Germany’s largest retailer, assessed 25 different agricultural sustainability standards and represents a follow up on a report published in 2015. The analysis shows several key conclusions:
- Of the four water stewardship outcomes, water quality continues to be the best covered aspect of water stewardship, followed by water balance, important water-related areas and governance;
- The most consistently well-covered issues are: water efficiency, effluent management and legal compliance;
- Conversely, participation in water governance, indirect water use assessment, collective action, climate change resilience and aquatic invasive species remain the most poorly covered issues;
- The ongoing lack of coverage of core concepts in water stewardship (e.g. collective action, water governance and consideration of future water risks) suggests that for most agricultural sustainability standards, there is still a lot of room for improvement;
- Organic standards have comparable coverage in the four water stewardship outcomes in terms of water quality, but generally have weaker coverage of water balance, water governance and important water-related areas when compared to conventional agricultural sustainability standards; and,
- Modest, but positive, progress has been made since 2015 in including water stewardship elements in those standards that have been updated.
Looking ahead, we offer the following recommendations for agricultural sustainability standard systems:
1. Develop supplementary water stewardship guidance and training
2. Integrate water stewardship into standard requirements, including addressing gaps/missing elements, strengthening wording to create more robust requirements2, exploring new and progressive concepts, and complementing efficiency measures with cumulative basin impact approaches
3. Enhance standard systems collaboration, via mutual recognition, add-ons, and service provision
Furthermore, for companies with significant agricultural supply chains, we offer the following recommendations:
1. Know your water risk and use credible standards, but make sure the standards you employ are fit for purpose as you seek to mitigate your water risks
2. Accelerate sector collaboration to advance water stewardship in standards 3. Engage and disclose on water stewardship in agriculture
Water stewardship remains a material concern to companies and investors that largely manifests in agricultural supply chains. Without a strong response, communities, nature and business interests all suffer in the long term.
The use of agricultural sustainability standards, when accompanied by robust water stewardship requirements, offers a pathway to address this concern. Adopting the recommendations above, we believe that standards can be a powerful mechanism to achieve stronger farming systems for the planet and people alike.