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Water Consumption Topic Methodology

The second installment in our Environmental Topic Methodology is now available for public comment

Water Consumption Public Comment

Introduction

The Water Consumption Topic Methodology addresses the global challenges of water availability by measuring and valuing the societal impacts of the consumption of water.  

Over 2 billion people have limited access to safe drinking water leading to the enshrinement of access to water as a necessary human right. While a global issue, the impacts on society of water consumption are often local, driven by scarcity that deprives use by some populations more than others.

The Water Consumption Topic Methodology guides preparers of impact accounts to measure and value, in currency, the impact of a company’s water consumption on people and the planet. Ultimately, the methodology encourages companies to manage and reduce water consumption, particularly in high-impact regions while simultaneously providing compelling information for a variety of business decisions.

Highlights

  • Accounts for water consumption across the entire value chain including upstream, direct operations, and downstream.
  • The data needed for preparers of impact accounts aligns with data already reported through ESRS E3: Water and marine resources, and GRI 303: Water and effluents 2018, while also considering the location of that water consumption as a key input.
  • Presents two options are for using the methodology, based on data availability. The preferred option applies the methodology to a specific location (e.g. city, state, or watershed) while the minimum option can be applied to water consumption by country.
  • Quantifies four location-specific impacts of water consumption: affected health from malnutrition, affected health from water-borne disease, altered ecosystem services, and financial costs to access future water. Each impact is calculated independently with rigorous approaches that allow for assessment of how each impact influences the total water consumption impact.
  • Includes the need for local context in determination of impacts through local water stress and pressure on biodiversity metrics. The local valuation provides preparers and users with a more representative and richer set of information for decision-making.
  • Acknowledges the relevance of qualitative information to supplement quantitative results as part of impact accounting, including calculation methodologies, approaches to handling data gaps, key assumptions, alignment with planetary boundaries or science-based thresholds for sustainable consumption, and progress towards water consumption targets.

Influences

The development of this methodology builds on frameworks and protocols published by leading organizations in the impact management ecosystem and sustainability-related disclosures required by governing jurisdictions and international standard setters, including:

The content of the Water Consumption Topic Methodology builds on IFVI & VBA’s General Methodologies and will be complemented by other Topic and Industry-specific Methodologies.

Development process

The development of the Water Consumption Topic Methodology is governed by the Valuation Technical & Practitioner Committee (VTPC) and follows the Due Process Protocol.

  • Development of the water consumption methodology was approved by the VTPC as part of its 2024 work plan. 
  • Research and development began in December 2023.  VTPC discussion meetings were held in February and May 2024.
  • The VTPC approved the Exposure Draft of the Water Consumption Methodology in June 2024.
  • Public comment period was launched on September 24, 2024.

Join the webinar

IFVI and VBA will host a webinar on October 29 at 4pm CET / 10am ET to introduce the exposure drafts for:

  • General Methodology 2: Impact Measurement and Valuation Techniques
  • OHS Topic Methodology
  • Water Consumption Topic Methodology