Why water should be part of your ESG reporting

Carbon emissions have long been a focus of Environmental, Social and Governance (ESG) reporting, but what about water? With growing pressure on supplies and changing expectations around sustainability, it’s becoming increasingly important for businesses to understand their water use.

In short: water is a growing operational and supply chain risk. England faces a public water supply shortfall of around 5 billion litres a day by 2055, and sustainability reporting standards are tightening. Measuring your water use now puts your business in a stronger position to report on it.

Carbon tends to dominate the ESG conversation. Water, meanwhile, can be overlooked, despite being essential to the day-to-day operations of many businesses.

But with water resources under increasing pressure and sustainability reporting evolving, there’s a good case for giving water more attention. If water isn’t currently part of your ESG reporting, now could be a good time to start thinking about it.

Water is an operational risk, not just a utility cost

The Environment Agency says that England could face a public water supply shortfall of around 5 billion litres a day by 2055 if action isn’t taken to address the issue. While this is, naturally, a threat to homes, it also has a significant impact on businesses. A water deficit could potentially restrict economic growth, damage resilience for energy supplies, harm the environment and limit food production.

This pressure won’t be the same for every organisation either. Research by Kingfisher in 2023 suggests that seven out of 17 regions in England are going to experience severe water stress by 2030, rising to 12 by 2040. This means that if your site or business is in one of those water-scarce areas, water belongs on your risk register.

Reporting expectations are moving

The UK government has now published the final UK’s Sustainability Reporting Standards, which cover sustainability and climate-related risks. The government is also considering making reporting against these standards mandatory for some companies through its Modernising Corporate Reporting programme.

For businesses, this means that the expectation to understand and explain their sustainability-related risks, including water, will be greater.

Consider your supply chain

A survey by CDP of more than 3,000 large businesses found that one in five faced water-related supply chain risks. So, even if businesses are tackling water scarcity internally, they also need to look at water-related risks in their supply chain and work with suppliers to manage them. As of 2024, around 28% of the surveyed companies do not engage with suppliers at all on water risk.

Those that do engage offer some good examples. Danone provides financial incentives to help farmers become more water resilient, and Tesco offers price premiums to suppliers who meet water-related criteria.

For investors, managing water risks has become an important part of the conversation as demand for transparency and water data has more than doubled.

Where to start as a business

The first step is understanding how much water your business actually uses. Review bills and meter readings, identify unusual water consumption and investigate potential leaks. Where possible, consider whether equipment, processes or everyday working practices could be made more water efficient.

For businesses producing trade effluent, reducing the volume or strength of wastewater discharged may also help lower associated charges, depending on how these are calculated. It’s then worth setting realistic targets and tracking progress over time.

The Government has set ambitions to reduce non-household water consumption in England by 9% by 2038 and 15% by 2050, providing a useful indication of the wider direction of travel. Businesses with more water-intensive operations could also explore whether treated or recycled water might be suitable for certain processes, where appropriate and permitted.

The important thing is to start measuring consumption and identify where improvements can realistically be made.

Why water should be part of your ESG reporting

Water is more than another utility cost. For many businesses, it’s an operational resource, a potential supply chain risk and an increasingly relevant sustainability consideration. Taking steps to understand water consumption now could help businesses reduce unnecessary costs, improve efficiency and build a clearer picture of their environmental performance.

Your business water arrangements are part of that picture too.

At Everflow, we can help you understand your water use and find ways to manage it more efficiently. Get in touch with our team to discuss your water management needs.

Frequently Asked Questions

Should water be included in your ESG reporting?

Yes, it’s worth considering. Carbon often dominates ESG conversations, but water is essential to the day-to-day running of many businesses and is a growing operational and supply chain risk. The Environment Agency has warned that England could face a public water supply shortfall of around 5 billion litres a day by 2055 if action isn’t taken. Reporting expectations are also moving, and investor demand for water data has more than doubled.

What water data should businesses report?

Start with how much water your business actually uses. Review your bills and meter readings, identify any unusual consumption and investigate potential leaks. From there, track your consumption over time against realistic targets. If your site produces trade effluent, the volume and strength of the wastewater you discharge is worth monitoring too, as reducing it may help lower associated charges. It’s also worth considering water-related risks in your supply chain, particularly if your site or suppliers are in water-scarce areas.

Is water reporting madatory in the UK?

Not currently as a standalone requirement. The UK government has published the final UK Sustainability Reporting Standards, which cover sustainability and climate-related risks, and it is considering making reporting against them mandatory for some companies through its Modernising Corporate Reporting programme. Even where reporting isn’t required, expectations to understand and explain sustainability-related risks, including water, are rising, so measuring your usage now puts you in a stronger position.

Contact Everflow today!

Our goal at Everflow is to make your utilities simpler, and water is no exception. We work with businesses of all sizes, across many industries and locations, so you get a flexible water service tailored to your needs. Get a bespoke water quote using the link below.

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