Rio+20 in the Rear View: Companies Call for Better Water Governance

WRI's experts will continue to provide commentary and analysis of the results of the Rio+20 conference through our series, "Rio+20 in the Rear View." For more posts in this series, see here and here.

Since the close of the Rio +20 conference last week, participants, experts, and observers the world over have tried to determine what, if any, real outcomes were achieved. Amidst all of the controversy and frustration over commitments and lack of progress, something significant did happen at Rio: Forty-five major companies representing hundreds of billions of dollars in annual revenue called for “much greater action by Governments” to achieve global water security.

These major companies endorse the U.N.’s Global Compact CEO Water Mandate, an initiative designed to assist companies in the development, implementation, and disclosure of water sustainability policies and practices. Their recent call at Rio+20 for better water governance is an important step forward for water protection—after all, it’s not every day that such a wide array of leading corporations asks governments to assert more control. It’s an indicator that water scarcity is creating widespread risks that are too complex for even the most powerful of companies to manage alone.

Collective Action and Good Governance Are Essential

When it comes to water risks like flooding, scarcity, and pollution, there is only so much any single company, water user, or community can do on its own. All of the water efficiency or recycling improvements in the world can’t protect one water user from scarcity or poor quality if neighbors overexploit their shared water resources. Good governance is essential to ensure that water resources are protected and allocated in an equitable, efficient, and predictable manner. The CEO Water Mandate communique calls for governments to “bring freshwater withdrawals back in line with natural renewal.” It outlines specific steps governments should take to protect water resources—including pricing water in ways that doesn’t encourage overuse by agriculture and other sectors—while still protecting the human right for access to safe water and sanitation. Many companies know that they can’t control all of their water needs or reduce potential risks to their businesses without better overall water policies enforced by governments. This need for coordination among communities of users is at the core of the CEO Water Mandate’s call to action to the governments present at Rio+20.

Ensuring Proper Water Management

While the need for better water governance is clear, the form that good water governance should take is less obvious. There are many tools for governments to choose from to address water needs, from regulation to pricing to multi-stakeholder watershed partnerships, and beyond. This complexity can make it difficult to evaluate who is leading (or lagging) when it comes to water governance.

As a part of its effort to measure and map the drivers of water risk, WRI’s Aqueduct project seeks to better understand good water governance and how it affects business-related water risk. WRI is partnering with the CEO Water Mandate, PricewaterhouseCoopers, the Global Reporting Initiative, and the Carbon Disclosure Project in an effort to create standardized guidelines companies can use to understand and disclose their water risks and strategies.

WRI will also be reaching out to leading experts in business, academia, civil society, and government to understand how water can be adequately managed in order to reduce risks to businesses, communities, and ecosystems. This information will help the private sector and governments work together to support governance structures that decrease water risks for all interested parties.

Calls for collaboration like the one recently issued at Rio by CEO Water Mandate members showcase a growing consensus that solving water challenges requires teamwork. While this call to action is an important step, we need to make sure that it turns into action in the future. As long as water continues to stubbornly refuse to adhere to political or economic boundaries or rules, the only way to manage it sustainably will be for all of us—companies, investors, governments, NGOs, and communities—to work together.