Water Footprint Benchmarks

A water footprint benchmark is a standardized measure used to assess and compare the water consumption associated with products, processes, or activities. It quantifies the amount of freshwater used throughout a product’s maunfacturing process, from raw material to finished product. By providing a clear picture of water usage, the benchmark helps identify opportunities for efficiency improvements and resource optimization. 

This aids industries, policymakers, and consumers in making informed decisions to minimize their environmental impact. Businesses can adopt water-saving technologies, optimize processes, or source materials from regions with abundant water. Consumers can choose products with lower water footprints, reducing their overall environmental impact. Additionally, governments can use benchmarks to develop policies and regulations that promote sustainable water management and mitigate water-related risks. 

Water footprint benchmarks have been so far carried out for agricultural crops and products but they can and should be applied to many other sectors. A unique example is that of the Financial Sector. 

Water Sustainability Benchmark for Financial Institutions

In 2018, the first Water Sustainability Benchmark for Financial Institutions was developed and implemented by the Water Footprint Network (WFN). The need for such a benchmark arose from increasing risks of water to Financial Institutions (FIs) and the lack of policies and strategies to manage these. What’s more, water often falls below the radar of materiality assessments for both FIs and the companies they offer their financial services to.

To tackle this gap in risk and impact perception, WFN together with WFI, developed a benchmark for International Financial Institutions (IFIs) and applied it for the first time to the world’s 50 largest IFIs. The results show to a worrying degree that IFIs have a blind spot when it comes to water. This puts both assets and our environmental resources at risk. The aim of the benchmark is to establish what are best practices of leading FIs when it comes to water, and to allow laggards to draw lessons and inspiration from the sector’s frontrunners.

The benchmark is not a one-off academic study. To be able to collect data, monitor trends, inform policy and translate knowledge to action in the financial sector, the benchmark for IFIs is meant as a yearly analysis.

Water Sustainability Benchmarks for FIs can also be applied at national or regional level to show to which extent investment and lending decisions contribute to depleting or polluting water resources or incentivize the protection thereof at a specific geo-political scale. 

WFI can carry out Water Footprint Benchmarks for different sectors, upon request and subject to availability of data.