How to improve ESG performance through investment in water treatment

Investors spend an average of £1m monthly on ESG research to inform their decisions. They are closely analysing issues related to water pollution, consumption, and chemicals as well as whether the company invests in responsible water management. 

A company's Environmental, Social, and Governance (ESG) performance is vital for investors, customers, suppliers, and other stakeholders. In fact, the value of the business is often directly related to how much attention it pays to ESG—something that firms often overlook. As a resource used by every enterprise, water has a vital role to play in ESG performance. Ensuring you are as efficient and environmentally responsible as possible will beat the investors' scrutiny while reducing operational risks.

High-impact water treatment projects

No matter the size of your company, it can always benefit from implementing a water treatment project. And the right project can have an impact on the E, the S, and the G.

Environmental benefits of water treatment projects include: 

• Freeing up space
• Reducing power consumption
• Reducing off-spec discharge risk and license-to-operate challenges
• Reducing water use from the local supply
• Stop having to remove residual waste offsite

A water treatment project can reduce operating costs, lower your business' emissions, and positively impact biodiversity.

Social benefits of water treatment projects include: 

• Boosting company morale 
• Building trust with communities
• Leaving more water for local stakeholders
• Improving health and safety
• Reducing the need to transport chemicals

Governance benefits of water treatment projects include: 

• Alleviating issues related to water withdrawal or discharge limits
• Enabling open reporting of water performance metrics
• Keeping permits
• Improving business performance
• Safeguarding against business risks

A structured approach to implementing the water treatment project

Reaching a sustainable, cost-effective solution is paramount for any industry. And from a governance perspective, it's essential to ensure a project's fit before it is implemented. Of course, no two companies or projects are the same. Still, a well-structured approach—such as the one detailed below—can begin when the company has confidence in the technologies its expert water partner suggests.

1. Measure chemical consumption and energy use to identify potential water treatment opportunities.
2. Analyse the data and project needs to find cost-effective and efficient solutions.
3. Design the right project whilst managing cost and technical risk.
4. Build an end-to-end solution that satisfies project goals.
5. Reduce power consumption, disposal, operating, and labour costs with a successful project.

The ESG outcomes of commercial water solutions

Finding the right solution often involves using the latest environmental engineering solutions. The following are several examples of water projects using the latest technology that have proven ESG benefits:  

Water as a human right

Industry and business rely on water. Yet, access to freshwater is a UN human right, and UN Sustainable Development Goal 6 is to “ensure availability and sustainable management of water and sanitation for all”. This could be seen as a difficult-to-manage conflict of interest. 

However, when industry responsibly uses freshwater, it safeguards its own future as well as that of the local community and biodiversity. Local water treatment plants are also put under less stress.

Water needs to be seen as a shared resource rather than a commodity industry has a monopoly on. This is particularly relevant for ESG scores as water is a driver of many ESG metrics.

What ESG water metrics should you include in the report?

Companies should demonstrate how they use water by reporting how they use the resource. The three key questions are:

• How is the water being withdrawn from the source?
• What is the water being used for?
• How and where is residual water is discharged?

It is also essential to measure any impact the company has on water and how these are being managed. If there is any current strategy to improve water stewardship, this should also be acknowledged. 

Water consumption

There are two ways of measuring water consumption: either directly or by calculating the difference between withdrawal and discharge volume. Suppose a company has a wastewater treatment programme for water reuse. In that case, the amount of water discharged and withdrawn can both be reduced—thus, consumption is also reduced. 

Water withdrawal

From where the water is withdrawn (seawater, freshwater, etc.) should be recorded in addition to how much is withdrawn. Additional information should be provided if any factors affect water withdrawal, including regulations, or if industries compete for the same water sources.

Wastewater discharge

How a company discharges its wastewater should be recorded and include information about volume, location, and quality.

Location reporting should detail where the wastewater was discharged, including groundwater, to the sea, or surface water.

Quality reporting should include information on the physical, chemical, and biological characteristics of the water discharged into the environment. If this has any negative impacts on ecosystems or public health, these should be monitored and managed. 

Companies should follow industry and national standards and regulations as this is a sure way of guaranteeing legal compliance. However, if there are any times when compliance has been breached, details should be provided in the report. Best practice is for companies to be clear about what standards they use to ensure effluent discharge quality. 

Writing a solid ESG report

Writing an ESG report is good practice to inform stakeholders of the company’s position. A report should include data that is relevant to investors and information that relates to a company’s financial performance. This should include:

• Quantitative data: compare the company's previous and peer performance scores. Larger companies should rely on a cross-disciplinary team responsible for measuring key metrics.
• Qualitative analysis from the leadership team involves assessing how the company plans to manage current and future ESG risks. 

Suppose a company has been involved in any breach of regulation or has done something controversial. In that case, the ESG report is the right opportunity to address these issues and explain how it plans to avoid similar circumstances in the future.

ESG leaders in water

Some global leaders in water stewardship include:

• 3M will reduce water use at its facilities by 25% annually — 2.5 billion gallons. It will also install water purification technology, enabling it to return high-quality water after use in manufacturing operations. 
• Coca-Cola uses 132 gallons of water to produce a 2-litre bottle of its drink, so its water security strategy focuses on replenishing all the water used in bottling operations, improving watershed health, and enhancing community water resilience. 
• Facebook’s servers use up to 360,000 gallons per day for a medium-sized 15-megawatt data centre, so the company has built a water-efficient data centre that uses 70% less water than its other data centres. This will help Facebook reach its commitment to restore more water than it consumes by 2030. 
• Microsoft plans to replenish more water than it uses by 2030.

Conclusion

Investors and customers care about ESG, and companies are working hard to improve their ratings and reduce risk. And as water is an essential element in all business and significantly contributes to ESG considerations, understanding how much water is taken, used, and discharged is paramount to improving ESG performance.

Wastewater treatment projects can reduce water consumption through water reuse. This is an efficient and sound long-term method of improving ESG metrics. When reported in the company ESG report, investors will have confidence, knowing that risks are being reduced.

WCS Group are leaders in the UK in the field of water minimisation, water reduction and water recycling, already working with major blue chip organisations to achieve to enhance their ESG goals and reduce water consumption. Contact us for a free chat with one of our experts.