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Nachrichten, Termine, Experten
Water is a vital resource for people, nature and the economy. But this resource is under pressure worldwide: changes in precipitation patterns, extreme weather events and the increasing water needs of agriculture, industry and households are leading to shortages and pollution. However, global companies have failed to systematically take water risks into account to date, even though there are substantial dangers in global supply chains in particular. A recent study conducted by Oeko-Institut shows that the strategic importance of water is often still low.
‘Water must be taken just as seriously as biodiversity and climate protection,’ says Melanie Pietschmann, a researcher specialising in sustainable management and co-author of the study. ‘This is why the protection of water in companies’ supply chains must be strengthened.’
Reliable and clear guidelines for supply chains are needed
Legally enshrined due diligence obligations, such as the German Supply Chain Act, provide a regulatory framework for the protection of human rights and the environment in supply chains. At EU level, too, Member States agreed upon a due diligence law – the Corporate Sustainability Due Diligence Directive (CSDDD) – in 2024.
The European Union’s current plans as part of the ‘Omnibus 1 Package’ envisage weakening corporate due diligence obligations in relation to supply chains. For example, they are to apply only to the company’s own business area and direct business partners instead of the entire supply chain; risk analyses are to be carried out every five years instead of annually.
‘However, the greatest water risks lie in the upstream supply chains – for example, in the extraction of raw materials in mining or in food cultivation. If these are not included, key risks to human rights and the environment will be neglected,’ explains Lara Schmitt, a researcher who specialises in sustainable supply chains and co-author of the report.
The authors therefore call for the comprehensive approach to due diligence in relation to supply chains to be maintained. Politicians must create reliable and uniform rules that give companies planning security when establishing effective management for risks in their supply chains. The authors recommend viewing the implementation of the CSDDD at national level as an opportunity to anchor water protection more firmly in due diligence legislation.
Understanding water protection as a strategic investment in the future
To date, there have been isolated initiatives by companies to protect water in the supply chain, but few strategic approaches. Water risks are not systematically recorded; clear indicators and incentives are lacking.
The study shows how companies can fulfil their responsibilities in practical terms. They should regularly carry out water risk analyses beyond their own sites and along the entire supply chain. This includes data on consumption and pollution at suppliers' sites and consideration of local conditions in the catchment areas. Assessment tools such as the water footprint help to record scarcity and quality.
Cooperation is essential
Water risks have both local and supraregional effects – very specifically along rivers and catchment areas, and often across national borders. It is therefore not enough for individual companies to take measures in isolation. ‘Effective water risk management can only succeed in collaboration with other stakeholders – from suppliers and authorities to local communities,’ says Pietschmann. Exchange platforms, industry initiatives and shared data pools could help companies to better assess risks and implement measures more efficiently.
The study shows that water protection requires clear legal guidelines and collective action. Individual voluntary measures are not enough. ‘Only if companies, politicians and society act together can we counteract water scarcity and water pollution,’ says Schmitt.
Oeko-Institut is one of Europe’s leading independent research and consultancy organisations working for a sustainable future. Founded in 1977, the institute develops principles and strategies for realising the vision of sustainable development at global, national and local level. It has offices in three cities in Germany: Freiburg, Darmstadt and Berlin.
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Contact at Oeko-Institut
Lara Schmitt
Research assistant in Environmental Law & Governance Division
Oeko-Institut Consult GmbH, Darmstadt office
Phone: +49 6151 8191-105
Email: l.schmitt@oeko.de
Melanie Pietschmann
Researcher in Environmental Law & Governance Division
Oeko-Institut Consult GmbH, Berlin Office
Phone: +49 6151 8191-107
Email: m.pietschmann@oeko.de
Oeko-Institut’s study ‘Water responsibility as corporate due diligence?’ in German: https://www.oeko.de/fileadmin/oekodoc/Wasserverantwortung-als-unternehmerische-S...
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