Insights from India: How Companies are reporting on water
India has 16% of the world's population, but only 4% of the water. As India works towards achieving sustainable development, the role of companies in reporting and managing water and effluents is increasingly becoming important.
India’s Water Economy
India has a long-standing commitment to protecting the natural environment. India was one of the first countries globally to establish a Ministry of Environment reflecting the high status of sustainable development on its policy agenda. Since its inception in 1985 India’s Ministry of Environment, Forests and Climate Change has implemented a series of mandatory regulations and non-mandatory guidelines to mainstreaming sustainable business practice within its economy to curb environmental pollution and degradation. For the last 150 years, India has invested in significant infrastructural improvements, particularly following its independence in the 1950s. One major area of expansion has been water infrastructure, where improvements in water resource management have transformed previously arid areas into regional economic centers of growth and prosperity, so more attempts to augment country’s water supply have been challenged by mounting-side and supply side pressures which threaten the continued success of India’s development, both economically and socially.
Despite issues related to water attaining high status within India’s policy agenda, the lack of integration across different government ministries involved in water management has resulted in a fragmented approach to water governance to respond to the danger facing different users groups within its water economy. The growing incidence and severity of water conflicts between different users exemplifies this.
Corporate Reporting in India
India’s long-standing issues related to resource scarcity have encouraged Indian businesses to create products which use natural resources more innovatively and with greater efficiency. Furthermore, there is growing concern among India’s business community at the threats posed by water-related risks. A survey conducted by Columbia Water Center on the perceptions of Indian businesses to water related risks found about 83% of businesses agreed that the availability of water was an existential risk to their bottom line. In terms of perception to long-term water risk 87% of businesses surveyed believed their business would become exposed to India’s mounting water crisis within the next decade.
However, the treatment of sustainability issues within Indian businesses is likely to vary based on the materiality of issues within different sectors. Levels of monitoring and reporting of environmental performance provides a good proxy for the materiality of different sustainability issues across business sectors and their readiness for working towards environmental and social goals. To date, there have been several studies exploring corporate water reporting within Indian businesses.
However, these efforts have been unable to meaningfully identify the state of corporate water reporting across India’s water economy, due to some main reasons are as follows.
- Inquiries into the level of corporate reporting on water sustainability in India tend to be aggregated across sectors, preventing a meaningful understanding of the materiality of water sustainability across sectors in India.
- Sector-wide levels of corporate water reporting are invariably cited from samples of businesses operating within India’s formal economy. However, around 50% of India’s economy is estimated to be informal - where we can reasonably assume a zero rate of water reporting disclosure - so existing studies tend to overestimate the extent of water reporting and downplay the lack of transparency of water activity within India’s water economy
Corporate Reporting Framework
Monitoring and reporting criteria within corporate frameworks focus on corporate exposures to water-related business Risks (67%) as well as the Impacts of non-consumptive water use within water catchments, such as pollution, effluents and wastewater treatment (44%). General found relatively broad coverage (67%) of monitoring and reporting criteria around sustainable/contextual use of water, referring to business’ utilization of water resources and their relative impact vis-à-vis sector-wide sustainability, global water trends and water use in water stressed/high-risk basins.
Nevertheless, there was no evidence across corporate monitoring and reporting frameworks that require companies to assess the impacts of their water use in relation to access to water and sanitation and existing property rights regimes within the water basins in which they operate omissions like this may potentially encourage poorer recognition of community-based water rights with in business water management practices, more blind spots in companies water reporting include Infrastructure reporting in water (0%), which relates to a corporate impact on the state of water infrastructure used to supply clean water sustainably and efficiently to other water users, and costs (0%), which relates to any payments for water contracts, water use permits and provision of sanitation.
Meanwhile, reporting Compliance with national and international regulation was covered in moderate detail across corporate reporting frameworks (44%) offering opportunities for understanding the efficacy of policy tools and interventions within India’s water economy. It was less detailed coverage of operational water sustainability, Water withdrawal and use (33%), Water consumption (33%) and criteria surrounding the effects of wastewater effluents on the State of water environment (22%). Despite water use efficiency information being comparatively easy to collect and with a cost implication in terms of efficiency and compliance there was no reporting criteria relating to trends in water use efficiency, preventing an assessment of the relative decoupling of output from water use over time within a business and across an industrial sector.
The UN Global Compact CEO Water Mandate, a public-private initiative designed to assist companies in the development, implementation and disclosure of water sustainability policies and practices has the potential to improve reporting on issues related to Compliance with water legislation, Sustainable/contextual use of water in water-stressed or water-scarce areas and water-related business risks. Meanwhile, the WBCSD India Water Tool is helping businesses better reporting and understanding exposure to water-related risk.
Widening Corporate Reporting
For widening Corporate reporting on water, there are certain barriers need to remove are as follows
1. Water is not a material issue.
2. Water reporting in so many areas of water sustainability is not mandatory.
3. Cost entailed in monitoring and reporting – particularly for SMEs.
4. CSR in India is still in an era of corporate philanthropy.
5. The presence of the informal economy within water-intensive sectors.
6. Lack of information to monitor and report impact within the water system.
Mandatory reporting will stimulate wider reporting of impacts across sectors and should be considered in the short-term for water-intensive sectors. One option could be to extend mandatory coverage of the Business Responsibility Reporting beyond India’s top 100 businesses. Failure to mandate environmental disclosures from business sectors could lead to firms displaying opportunistic behave, exploiting information asymmetries among various stakeholders and in turn, generating greater environmental externalities.
Picture description: Pangong Lake extends from China to India. Approximately 60% of the length of the lake lies in China. The lake is in the process of being identified under the Ramsar Convention as a wetland of international importance..
Picture credits: Marmik Bapna