As part of their “water positive” goals, some corporations, including Intel, Meta and Procter & Gamble, have pledged to restore or replenish the water consumed by their operations, particularly in water-stressed regions.
There are nuanced differences in the various corporate water positive commitments, but many companies making them are starting to invest in watershed restoration projects — including modernizing decades-old irrigation systems, restoring wetlands and reforesting wildfire-scorched landscapes — to make good on their pledges.
Those seeking to follow that lead may feel like they’re rowing upstream, according to sustainability professionals, consultants and NGO representatives who have already dipped their toes into these initiatives. The processes for finding water restoration projects and accounting for them against water stewardship goals are still being defined and refined, they said.
“Water is chronically undervalued in many regions. In a cost-benefit analysis, it’s never going to pencil out,” observed Stefanie Woodward, senior sustainability manager for water and climate at Meta, during a session last month at GreenBiz 23 in Scottsdale, Arizona.
“We don’t want volumetric calculation to be the be-all and end-all,” echoed Todd Reeve, CEO of Bonneville Environmental Foundation, a nonprofit from Portland, Oregon, that helps connect corporations interested in funding or supporting projects with the NGOs delivering them. “It can be a pitfall if an organization is too focused on that.”
Water is something many companies still take for granted, but as droughts and floods become more common, the financial exposure to water-related risks is growing. Last year, CDP examined the financial investments in four particularly water-dependent industries — oil and gas, electric utilities, coal and metals and mining. The data estimated that more than $13.5 billion in assets were already stranded, with $2 billion more at risk.
The reality is, however, that every industry is exposed. Another CDP report released this week estimated the overall risk from water insecurity at $392 billion, a figure the research organization believes underestimates the true impact. Among the big companies that aren’t very transparent on this issue: Apple and Tesla. “From a risk perspective, everything that we wear, everything that we eat, everything that we do is enabled by water,” said Jonathan Lanciani, senior vice president of consulting firm Coho, during the GreenBiz 23 discussion. “Either water is a raw material import or it is used in the production process, heating and cooling. It’s an essential item.”
Quality versus quantity
In the case of Meta, headquartered in Menlo Park, California, water is invaluable for its data centers. The company’s equipment is up to 80 percent more efficient than the industry average, according to recent remarks by the company’s global head of sustainability. But its license to operate in water-stressed regions depends on how it acts locally.
Meta is aiming to restore more water than it uses by 2030: the goal is 200 percent restoration in high water-stressed sites (defined by World Resources Institute as places where 40 percent or more of available water is withdrawn annually) and 100 percent restoration at medium water-stressed locations, according to Woodward.
Water is chronically undervalued in many regions. In a cost-benefit analysis, it’s never going to pencil out.
“One of the biggest challenges that we have right now is how you count or claim the various impacts that you are having,” Reeve said during the GreenBiz 23 session. “We’re at a pivotal point right now. Your goals are about much more than just accomplishing a molecular balance goal.”
Several efforts are under way to codify what it means to be “water positive,” Reeve said. One of those is the Net Positive Water Impact (NPWI) initiative, an effort led by the United Nations Global Compact’s CEO Water Mandate (which includes 240 companies) and the related Water Resilience Coalition. The effort suggests establishing water performance benchmarks aligned with three primary objectives:
- Water quantity: Reducing the amount of water required for business activities through efficiency, reuse and efficiency measures. Its suggestions include establishing supplier guidelines for better water management.
- Water quality: Improving treatment methods to reduce nutrient loads and prevent pollution. This includes phasing out harmful chemicals in products and production.
- Water access: Protecting water sources to improve access for drinking, sanitation and hygiene (so-called WASH concerns).
Right now, Meta accounts for the impact of restoration using WRI’s Volumetric Benefit Accounting Methodology, but Woodward said considerations aside from volume are just as important for its project selection — such as water quality measures, watershed resilience and environmental justice. So far, the technology company has supported projects in states including Arizona, California, New Mexico, Oregon, Texas and Utah ranging from reforestation to aquifer storage restoration to wetland construction.
Here’s what it’s up against. In 2021, the last year for which data has been made publicly available, Meta withdrew about 5 million cubic meters of water for its operations, an increase of about 35 percent from the previous year. It consumed 2.6 million cubic meters. According to the company’s most recent water update in August, Meta restored almost all of that amount, about 2.3 million cubic meters. As of 2021, it had contracted for restoration projects that will restore an estimated 1 billion gallons, or about 3.8 million cubic meters.
Going with the flow
Finding “shovel-ready” water projects isn’t easy, as Meta and another company talking up water restoration, P&G, can attest. “A lot of the timelines shift,” said Shannon Quinn, global water stewardship leader for P&G, which is building a portfolio of about 20 projects, in collaboration with Bonneville and other partners. “Companies need to think about it at least mid-term and need to expect that there will be variation when each project comes online. It’s unpredictable … You need to plan for the unexpected.”
P&G has established two primary water restoration priorities. The first centers on restoring more water than is consumed at P&G manufacturing sites in 18 water-stressed areas around the world. The company used 69 million cubic meters of water for production in fiscal year 2021 (more recent figures aren’t publicly available). The second priority focuses on restoring water consumed by the use of its products in two high water-stressed regions, Los Angeles and Mexico City. Like Meta, P&G is seeking to satisfy certain volumetric considerations, but it is also focused on co-benefits such as better access for communities, improved quality, climate resilience, habitat restoration or reduced runoff.
“There are some that are looking for counting drops,” said Scott Heid, vice president of sustainability communications for P&G, who accompanied me on a field trip to an irrigation ditch modernization project last month in the Verde River Valley, Arizona, about 100 miles north of Phoenix near Sedona. The Verde, one of the state’s few remaining wild rivers, brings drinking water to the city. It is fed by tributaries including Oak Creek, Beaver Creek and West Clear Creek. “For us, it’s more about long-term infrastructure investment because we are already driving water-efficiency in our facilities and driving other things beyond.”
Finding projects takes a significant amount of research and negotiation. One of Bonneville’s roles is to help willing corporate, nonprofit and community partners find each other. “In so many ways, the work that needs to be done is experimental. We don’t know what the solutions are,” Reeve said after my field visit.
The project I visited on the West Clear Creek, managed by The Nature Conservancy (TNC), happens to be one in which restoring water volume was a consideration — it aims to ensure that farmers along the historic Verde irrigation ditch system started in the 1860s by settlers near Campe Verde have enough water to irrigate their crops. West Clear Creek has gone dry in early summer every year since 1905, according to Kimberly Schonek, Verde River project manager for TNC.
Above the irrigation system, the creek flows at an average of 15 cubic feet per second (CFS) — closer to 12 CFS in the summer, she said. The irrigation demand is closer to 20 CFS, she said. “Our goal is not to encourage the creation of more agricultural land; it’s getting more to existing lands while keeping water in the river.”
TNC’s work within the Verde system is twofold: improving the flow of its various creeks; and working with the farmers downstream to change the demand. Some of the corporate funding partners behind these projects: Coca-Cola; Intel; Meta; PepsiCo; and P&G. (Bonneville has worked with more than 60 corporations, about a dozen of which are actively engaged in projects.)
One of P&G’s initiatives in the Verde region is on the Mason Lane Ditch, a larger ditch than the one we visited during February that serves 223 acres of irrigated land. The work on this single ditch, inaccessible because of recent rainfall, will return an estimated 179.6 million gallons annually, according to materials published about the project.
The work on the West Clear Creek irrigation system included installing sensors that help measure the flow and that automate when water is diverted into the system. At the site we examined, bullet holes in the structure marked where irrigation rights holders sought to increase the water flow in bygone years. The ditches themselves, originally dirt-lined, have been lined with flexible PVC piping that discourages runoff. It also prevents those with irrigation rights farther downstream from altering the ditch size by digging to siphon off more water than they’re permitted to use. According to a brief by Business for Water, a Bonneville program, the various projects on the creek will return an estimated 190 million gallons annually.
And what’s the impact for those downstream users? After visiting the ditch, we met with Zach Hauser, whose family owns 600 acres in the valley, about half of which is farmed with crops including alfalfa and barley. The Hausers began working with TNC about 10 years ago, after Schonek approached Zach’s father.
“We’ve had some projects that didn’t work as well as we wanted them to, but we haven’t had one project go wrong,” Hauser told me. “I’m looking forward to doing more.”
One project involved investing in a local malt house, enabling the Hausers to switch some fields to malt barley for beer — which pays almost double the price of barley used for feed and competes with corn for profit margin. Barley requires comparatively very little water: The Hausers stop irrigating those fields in early June each year, which reduces demand on the local creeks at a critical time for regional water supplies. The farm was also able to install drip irrigation (an investment that typically costs $1,000 to $3,000 per acre) and pivot irrigation, also thanks to the corporate funding arranged by Bonneville.
Since water restoration projects are still a relatively new frontier for corporations, here’s some advice for those just dipping their toes into this strategy, gleaned from my interviews:
- Collaborate, collaborate, collaborate. Companies haven’t typically had a seat at the table on water issues — unless it’s on the receiving end of criticism. Getting engaged proactively and authentically with NGOs, communities and policymakers is non-negotiable. Working with other corporations that have similar interests can help speed project development, Reeve said. “This is a watershed moment to capitalize on corporate leadership and innovation.”
- Be prepared to wait, but know when to act quickly. Water rights differ from region to region, and land ownership can be tricky to navigate. “Many companies come in thinking this is a commoditized concept, like carbon credits,” Reeve said. Among the concerns that take time to investigate: community concerns; environmental studies; consideration of cultural significance to Indigenous peoples; convincing those with local water claims that conservation is in their interest. “Oftentimes what we struggle with is that we’ve got funders who want to fund now and want money in the ground next month, and then the project we can get in the ground next month is the easy one,” Schonek said. “Longer-time planning horizons get you better projects, and they get issues resolved.”
- Find common ground with landowners and local water users. The relationship between TNC and the Hausers was built on years of open dialogue, and Hauser said many of their values are closely aligned. “As a farmer, we want to use less water, and we want to manage it and conserve it better, but there also has be trust … that this isn’t some sleight of hand trick,” he said during my visit.
One other strategy that has been crucial to saving water on the farm, the largest in the valley, was the Hauser family’s decision to apply for conservation easements that permanently preserve a large portion of their property — their land is owned, not leased. Those acres are home to mesquite bosques and riparian buffer strips that encourage biodiversity and bird habitat, and the tax incentives the farm receives make it possible to maximize water management on the other acres.
“Farmers think about water all day, every day,” Hauser said. “This place without water is nothing. A farm is not a farm without water.”