The Water Risk Filter is not what it used to be...
Back then it represented the first tool to globally map and measure water risk, although other tools were in the mix – WBCSD’s Global Water Tool (which mapped various global water layers) and WRI’s Aqueduct (which at the time mapped select basins, but soon provided a similar basin water risk assessment to the Water Risk Filter).
Fast forward to today and all three tools still exist, but the landscape has changed considerably.
Not only has there been a massive growth in the number of companies aware of (and measuring) their water risk, but the tools themselves have evolved considerably. The Water Risk Filter is now on version 4.0 (and about to undergo a significant shift as it moves to version 5.0), while Aqueduct is about to launch version 3.0.
Mostly notably, there is now a growing appreciation (certainly amongst us tool developers!) that these tools are indeed different and offer users different benefits – something you’ll hear more about in the coming months as we work with WRI to outline how our tools overlap and differ.
This week is the annual “all things water” Stockholm World Water Week. Amongst the many sessions, WWF and WRI co-hosted a session on water risk tools. Since not everyone has the opportunity to get to Stockholm, I thought I’d share some of the things that were raised in the session – a session which gave me the chance to really reflect on water risk assessments and think about what we’ve learned (and how we’re taking that forward).
What have we (tool developers) learned about water risk assessments?
My presentation in Stockholm flagged six things (and profiled a few of the new, upcoming features of the Water Risk Filter 5.0 – although the improvements are far more significant than a simple number change suggests)
- Assessing water risk is a global and local process: As noted, back in 2012, WRI began their journey by looking at detailed basin data for a select number of basins – after all, water is a local issue and high-resolution data is important to inform action on the ground. Yet we both quickly realized that for a company, prioritizing mitigation of water risks is very much a global exercise. There is the need to consider water data (and its availability) at different scales from global to local.
Over the past year, WWF has begun to develop high-resolution water risk data sets for various countries and basins, including the UK and South Africa. In the next few months, we will launch high-resolution data sets for another 10 million km2 covering the lower Mekong, Spain, Colombia and Brazil.
- Water risk is both basin and operational: Water risk assessments have largely been based on the risks faced by a facility stemming from the basin. However, water risk is not only a function of dependencies from the basin, but also the potential impacts on the basin (there’s a solid report from BIER here that outlines this in more depth).
Uniquely, the Water Risk Filter has, since its inception, looked at both basin water risk and operational water risk. As we move forward with version 5.0, we are upgrading and improving both our basin and operational water risk data sets to provide what we believe to be the best water risk data available.
- Water risk is about assessment and mitigation: WWF’s Water Stewardship Ladder has always indicated that awareness of water risk and impact is only part of the journey towards actions both internal and external. However, historically, water risk tools have largely remained in the sphere of assessment only. With the upgraded version of the Water Risk Filter, that will shift.
Soon the Water Risk Filter will be able to identify specific recommendations, based on unique basin and operational water risk exposure scores, to mitigate risks. Furthermore, these actions can be sorted and organized not only by facility (what the site manager should plan to do) versus corporate (what corporate HQ can do to support its operations), but also by level of sophistication (are you just starting your stewardship journey or quite advanced?).
Lastly, the mitigation actions are also tagged against various stewardship frameworks allowing users to understand how they would comply with other frameworks (e.g., Ceres’s Aqua Gauge, or AWS’s Water Stewardship Standard) as well as find information through common terminology with the CEO Water Mandate’s Water Stewardship Toolkit.
- Water risk models should be considered in combination: Water risk is a concept that relies upon a large amount of modelled data. Like any model, there are assumptions that make the output somewhat subjective. Indeed, much of our global science to assess planetary processes, such as climate change impacts and mitigation, depends upon modelling. To date, many users have treated water risk as a single data set, yet interpretation should be encouraged more as assessing a set of modelled scenarios (as is done for estimating future climate, economic growth, populations, etc.).
Accordingly, we encourage companies to use not only the Water Risk Filter, but also the other tools that are out there like Aqueduct. Both offer robust, peer-reviewed approaches, but the results do differ. Without a clear answer as to which is more accurate (since there is, and will likely never be, an answer to that), it is better to have a sense of both. As we look forward to 2018 and beyond, we are seeking out opportunities to work together more closely with WRI and explore how to use our tools in a combined fashion.
- Water risk = context (& can help move towards context-based water targets): At the end of the day, a basin water risk assessment is really an assessment of context. Recently, WWF, along with CDP, The Nature Conservancy, the UN Global Compact’s CEO Water Mandate, and WRI put out a paper the put forth the case for corporate context-based water targets. The paper also outlined a step-wise pathway that might be required to gradually shift thinking from business as usual, to an approach that considers water conditions, en route to a more formalized context-based water target approach.
In this regard, tools like the Water Risk Filter can help to inform a very site-specific approach. In other words, the Water Risk Filter can begin to indicate to companies: “Which sites should have a target set on water quality, quantity, or both?” or “Does this site need an efficiency target, and if so, how progressive ought such a target be?”
- Water risk is ultimately about value: Since the Water Risk Filter was established in conjunction with DEG, the German Development Bank, gaining a better sense of how much financial impact water risk could have on a company was of interest. In 2015, WWF and IFC put forth a framework that began to tie together the notions of water risk, water stewardship and valuation. Since that time, numerous efforts have begun to explore this notion, and the idea of “stress testing” has become much more well established in the banking sector as it relates to carbon impacts. As financial institutions turn their attention increasingly to water as well, the ability to assess the degree to which water risk could affect financials becomes increasingly important.
Accordingly, in the coming months, WWF will develop an off-line (and ultimately on-line) tool capable of combining water risk, financial data, and responses to gain a better sense of the value exposed to water risk.