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14th January 2022
Food companies use 70 per cent of world's water, are unprepared for global water crisis: report

The food industry is not acting quickly enough to mitigate risks according to Ceres' new report, Feeding Ourselves Thirsty

Author of the article:Laura Brehaut
Publishing date: Jan 02, 2022

Last summer’s drought shrivelled crops in Western Canada. Vast swaths of prairie — typically bright with golden stalks of wheat and yellow canola flowers in bloom — faded to brown. The worst in 60 years , it shrunk national wheat production by 38.5 per cent ; canola by 35.4 per cent.

Almost all of the agricultural land on the Prairies (99 per cent) was still abnormally dry or in moderate to exceptional drought as of Nov. 30, according to the Canadian Drought Monitor . And Canada isn’t alone in experiencing a prolonged 2021 dry spell. Brazil faced the worst drought in nearly a century, causing coffee crops to fail and power costs to soar. Antarctica was the only continent unaffected by an otherwise worldwide drought .

“We really are witnessing the water crisis play out in real time,” says Kirsten James, director of water at sustainability nonprofit Ceres . “When you dive into where the impacts are, and the biggest users of water resources and some of the biggest polluters of water resources as well, you really start to hone in on the food industry, and specifically, their agricultural supply chain.”

Drought is poised to become “ the next pandemic ” if countries don’t take urgent water management action, according to the United Nations Office for Disaster Risk Reduction . Though people have been living with it for millennia, “human activities are exacerbating drought and increasing the impact,” Mami Mizutori, the UN secretary general’s special representative for disaster risk reduction, told The Guardian .

The food industry uses more than 70 per cent of the world’s water, which is being increasingly depleted and polluted, Ceres highlights in its new report, Feeding Ourselves Thirsty .

Food companies are in a unique position, James highlights: They rely on water to run their businesses but also contribute to the stress and pollution of this vital resource. “It sort of comes at it from both sides of the coin: They need to be part of the solution to survive as a business but also to ensure that we have freshwater resources in perpetuity.”

If food companies want to succeed in this environment, it's time for them to build a new paradigm around the value of water and really act on it.

According to Feeding Ourselves Thirsty , food companies are not acting quickly enough to mitigate water risks. The report analyzed the water management of 38 food companies and, with an average score of 45 out of a possible 100 points, found that the industry is largely unprepared for a water-scarce future.

Scientists have forecasted more frequent, severe and longer-lasting droughts , which will only complicate the food industry’s “precarious relationship to water,” says James. “The latest science and research is really showing us that the time for urgent action is now and the private sector needs to play a key role.”

Ceres evaluated companies in four industries considered especially vulnerable to water risks: agricultural products, beverages, meat and packaged foods. Packaged foods (54) and beverages (53) had the highest average scores with the top 10 performers falling into these categories.

The Coca-Cola Company (90), Anheuser-Busch InBev (83) and Unilever (83) scored the highest overall. Though it’s worth noting that Coca-Cola was recently named the top plastic polluter for the fourth straight year and Unilever rounded out the three biggest polluters in Break Free From Plastic’s 2021 brand audit report , highlighting how food companies may perform well in water management but not in other areas of sustainability.

“These issues can’t be thought of in silos and plastic pollution is obviously a critical water pollution issue,” says James. “So, we definitely encourage companies to think holistically about these issues.”

As in previous editions of Feeding Ourselves Thirsty , which Ceres has released every other year since 2015, the meat sector lagged behind with an average score of 18 points. James attributes this trend to a lack of focus on water management in agricultural supply chains.

“What a lot of folks don’t realize is that it’s actually the feed for animal agriculture that leads to a lot of the water impacts,” she says. “It’s really important for (meat companies) to look at their direct operations and manage pollution there, and obviously, water use. But also, it’s really critical that these meat companies are looking at that agricultural supply chain because the feed is a really big piece of that pie.”

Though the report found that food companies are largely unprepared for future freshwater shortages, there have been improvements, James highlights.

Since 2017, the number of companies explicitly considering sustainability increased by 44 per cent for a total of 79 per cent. In 2019, 33 per cent of companies tied executive compensation to water performance goals; that number has since risen to 53 per cent, a 60 per cent increase.

“We are seeing signs of progress and the trends are heading in the right direction. But we aren’t getting there fast enough to match the scale of the water crisis,” says James. “If food companies want to succeed in this environment, it’s time for them to build a new paradigm around the value of water and really act on it.”

The report found a number of critical areas where improvements are needed, such as performing robust water risk assessments (including water quality) — “the very first step of starting to manage water risk” — which less than half (18) of the companies had done. Only nine of the 38 implemented water use reduction targets and 12 provided support for farmers growing ingredients in high-stress water basins .

James sees supporting producers in at-risk watersheds as “a key best practice” too few companies are focusing on: “It’s really critical to their really honing in on where their money matters most and where their support matters most.”

Though the report shows great room for improvement, Beth Hooker, director of water and agriculture resilience at Ceres, finds the amount of educational and financial support encouraging.

“Eighty-seven per cent of companies are providing educational support to farmers and that’s up from 70 per cent in 2019,” says Hooker. “To me, that’s very exciting. In terms of thinking about how we affect change, these are large companies that have a really large environmental footprint.”

The latest edition of Feeding Ourselves Thirsty had a greater focus on the ways food companies are supporting farmers, Hooker highlights.

As examples of companies making progress, she notes Danone (ranked seventh in the report with a score of 77), which provided funding to almond growers in California for regenerative agriculture practices as part of the Ceres/WWF AgWater Challenge , and Nestlé (ranked fourth with a score of 80), which has committed to sourcing 50 per cent of its key ingredients through regenerative agricultural methods by 2030 and identified 14 raw materials that could pose high environmental and/or social risk.

“It’s important for consumers to understand which companies are really making an effort and put their dollars behind that, if that’s a strong ethic for them,” says James. “We’ve seen that companies respond to what consumers are asking for and what employees of the companies are asking for, and what their values are. So, we think consumers are really a key stakeholder in encouraging companies to continue on this journey.”