Agriculture accounts for 70% of water use, yet despite increasing reporting of water risk to CDP, water withdrawals by companies in the food and drink and agriculture sectors continue to rise. Mark Hillsdon reports on three companies that are taking a restorative approach
With 70% of freshwater used each year around the world going to agriculture, what are some of the world’s leading food and drink and agricultural commodity companies doing to reduce their water footprint?
Every year, CDP reports on what companies are doing to address water risk as part of its supply chain programme. Ahead of the full data release, The Ethical Corporation Magazine has learnt that the number of companies reporting on water through the programme rose again this year, with 2,934 businesses disclosing, among them 414 food, beverage and agricultural companies, up from 390 last year.
Cate Lamb, CDP’s director of water security is encouraged by the increase in numbers, but with water withdrawals contining to increase every year, and just 12% of the world’s largest food companies having targets to tackle water pollution, she says companies are far from plugging the water gap. “While we have seen an increasing number of companies in the sector disclosing, and some leaders moving to set ambitious goals, this is far from the norm. Agricultural production is up there with mining as one of the greatest sources of freshwater pollution.”
Here we look at three companies in the agriculture, food, and beverage value chains, respectively, that are leading the way.
US-based Cargill, one of the world’s biggest agricultural companies, is not one of the usual suspects when it comes to sustainability initiatives. But it recently announced a new set of targets around water, including an eye-catching commitment to restore 600 billion litres of water in priority watersheds by 2030.
Developed with the World Resources Institute (WRI), the targets also commit Cargill to reduce 5,500 tons of water pollutants in its priority watersheds, while further improving access to safe drinking water in 25 of them. It is also set to implement water stewardship programmes, aligned to the AWS International Water Stewardship Standards (AWS Standard), at 81 priority facilities.
In the past, Cargill has focused on its direct operations, but its new approach to water management looks outside the factory, mixing strong science-based targets with a local perspective, all backed by a commitment to regenerative agriculture.
It makes a lot more sense focusing on the local context rather than taking a random global water efficiency approach
At the targets’ launch, the WRI’s senior manager for water quality and agriculture, Sara Walker, said: “While for years companies have set targets that try to address global water issues, the local nature of shared water challenges has meant targets aren’t necessarily meaningful in the areas in which companies operate or from where they source … [Cargill] sets targets specific to the catchment context and severity of local water challenges.”
“It makes a lot more sense focusing on that local context rather than taking a random global water efficiency approach, or global replenish approach,” says Truke Smoor, director of water at Cargill. “Every watershed has its unique challenges.”
In terms of internal water efficiency, the company sets the bar high, with a basic foundation level of water management at all its facilities. “We have to keep our own house in order,” says Smoor, but by knowing that systems are in place to achieve high levels of efficiency, she continues, the company can concentrate on driving change through water stewardship programmes along its supply chain “where it matters most”.
Although Cargill’s supply chain stretches across some 25,000 companies, it is still very much US based. Many businesses operate from the wide-open spaces of Nebraska, which has some of the most productive agricultural land in the US, and the second-largest cattle population. More than half the water used in US beef production goes on irrigating crops for cattle feed, something that Cargill realised it could influence. Working in partnership with The Nature Conservancy and Nestlé, smart weather sensors have been introduced onto farms, allowing farmers to make better-informed decisions about irrigation. When the project ends next year it is expected to have saved 2.4 billion litres of water.
Cargill is also part of the Midwest Row Crop Collaborative, which extends across farmland in Illinois, Iowa and Nebraska. Here, Cargill is working with other companies to accelerate farmer-led programmes in water conservation across 75% of this cultivated land, and help to prevent nutrient run off into rivers flowing into the Mississippi Basin. Another project is focused on grassland restoration in the Great Plains, which encourages different grazing methods to help create healthier soils and recharge aquifers.
All these projects should act as a connecting point, says Smoor. On the one hand they create incentives that improve the resilience and profitability for farmers, and on the other they address environmental issues that are important to consumers.
Cargill is also working with the WRI to develop a new Water Management Toolkit, which will be made available to other businesses to help set water targets based on their specific operations and agricultural supply chain. Smoor sees the kit as a way of encouraging companies to address shared water challenges and work together to promote sustainable water use, especially at the local level.
In June, the Anglo-Dutch consumer brands behemoth announced new commitments to tackle its water footprint and regenerate nature as part of its new Compass sustainability strategy.
Unilever has a large water footprint from its range of cleaning and beauty products, as well as its drinks and food.
In the last couple of years, it has innovated to introduce water-saving products after realising it would fail to reach a goal in its 2010 Sustainable Living Plan to halve the water use associated with consumer use of its products by 2020. Rather than fall, water use by customers had actually increased by 1% up to 2019.
But Unilever has done much better when it comes to reducing water use in agriculture, which accounts for 15% of its water footprint. Close to 100% of its vegetable suppliers are in compliance with its Sustainable Agriculture Code.
The economic and social inclusion of farmers and smallholders in sustainable agricultural production is the single most important driver of change
In the code there is a big focus on shifting to drip irrigation, which cuts water use by as much as 50% compared to overhead or furrow irrigation, and can cut the use of fungicide as well, by up to 50% in humid regions.
Suppliers must engage with farmers to ensure they frequently check the impacts of irrigation systems on biodiversity and local communities, and ensure drinking water and water distribution isn’t compromised, with systems monitored to avoid crop or soil damage.
It renewed the code in 2018 to provide clear guidance on all aspects of climate-smart agriculture, and in June introduced a new Regenerative Agriculture Code for all its suppliers, with an overall aim of regenerating the land in order to make it more productive, biodiverse and better at storing carbon. The company said it would build on the work done through the Sustainable Agriculture Code, and “move towards applying principles that take a regenerative approach, and which can be more broadly applied to all our suppliers and farmers”.
As with the Sustainable Agriculture Code, Unilever is making the new code available to any organisation that might find it useful, with the goal of driving change through the industry.
Another target is to draw on funding from the €1bn Climate and Nature fund to set up water stewardship programmes for local communities in 100 locations by 2030, guided by its membership of the Alliance for Water Stewardship (AWS), and taking lessons from Unilever’s Prabhat initiative in India.
This takes a community-led approach, supporting farmers and improving access to water through building dams to recharge groundwater levels and store monsoon rains, rehabilitating ponds, and reducing water demand through better farmer education. Unilever estimates that the work in Prabhat has conserved more than 49 billion litres of water and resulted in 2,000 tonnes of additional agricultural yields benefiting 15,000 farmers.
“In most parts of the world, the economic and social inclusion of farmers and smallholders in sustainable agricultural production is the single most important driver of change for halting deforestation, restoring forests and helping regenerate nature,” says Marc Engel, Unilever’s chief procurement officer. “In the end, they are the stewards of the land. We must, therefore, empower and work with a new generation of farmers and smallholders in order to make a step change in regenerating nature.”
Anyone working in one of Diageo’s maltings – where cereals are soaked in water and converted into malt – along Scotland’s notoriously wet north-east coast would be hard-pressed to see water management as an important issue for the business, admits Michael Alexander, the company’s global head of water, environment and agriculture sustainability. But elsewhere in the company’s global supply chain, water is a far more precious resource.
Later in November, the company, whose brands include Johnnie Walker, Smirnoff and Guinness, will announce a new set of water targets up to 2030 that Alexander says will be a refresh of the strategy it has followed for the last five years.
“The simplicity of the strategy has been really important,” he explains. If it’s not intuitive, and easy to report against, he says, “then we're not going to make the difference that we want to make.”
Highlights from its 2015-2020 strategy include successfully replenishing 100% of the water used in its final products in water-stressed areas, and a 46% improvement in water efficiency across the company, against a goal of 50%. Alexander says the target was narrowly missed due to Covid-related delays to water recycling projects in Africa.
Water efficiency involves continuous improvement, and chipping away to make small gains
However, other projects were completed as part of Diageo’s £180m investment into both carbon and water efficiency at its African breweries. These included new water recovery, purification and reuse facilities at five sites, including the Port Bell brewery in Uganda. Here, the changes have led to a drop in the amount of water used to make a litre of beer from 4.9 litres in 2018 to just 2.4 litres.
Water efficiency involves continuous improvement, and chipping away to make small gains, says Alexander. And while its own operations will always be important, he believes the company can now have an even greater impact outside its four walls.
Here, projects have included reforestation programmes to stop run-off, soil erosion and flooding in the watersheds where the crops to make its products are grown. The company has also invested in desilting dams to improve water storage for farmers, and introducing ideas such as rainwater harvesting. This year more than 250,000 people also benefited from Diageo’s partnership with Water Aid to support WASH programmes, focusing on clean water, sanitation and hygiene.
In 2019, Diageo was appointed a UN Global Goals Business Avenger, championing SDG 6. Alexander believes partnership must play a bigger role in meeting the SDGs.
For instance, outside of water Diageo has teamed up with PepsiCo and Unilever to develop an innovative paper bottle. On its own Diageo wouldn’t have been able to take the idea forward, but the partnership brought unit costs down and made the project viable, says Alexander.
At Diageo, 126 companies accounting for 88% of its supply chain responded to CDP’s request for data about their water management, which Diageo uses as a way of exploring possible areas for collaboration.
Diageo remains open to learning too. “Some of our suppliers are bigger than us, such as Cargill who are doing fantastic things around water,” he adds. “We can learn from our suppliers; we don’t have all the answers.”
Mark Hillsdon is a Manchester-based freelance writer who writes on business and sustainability for Ethical Corporation, The Guardian, and a range of nature-based titles including CountryFile and BBC Wildlife.
This article is part of our in-depth Water Risk briefing. See also:
SDG6 CDP water scarcity freshwater pollution Cargill AWS WRI weather sensors Unilever drip irriagation Sustainable Agriculture Code Diageo WASH