Water is one of the critical factors of ESG (Environment, Social, and Governance). Fresh and clean water is increasingly endangered despite being considered a plentiful renewable resource mainly due to population growth and economic activity leading to an increase in water demands and pollution.
According to United Nations, if current consumption and production patterns do not change, there will be a 40% shortfall in water supply by 2030. Companies are expected to face increased scrutiny such as limits on water withdrawal and tight regulations over their water use as global water resources face increased stress.
Groundwater is withdrawn by industries such as manufacturing, mining, oil and gas, energy and utilities, and construction. Apparel and food & beverage industries are highly dependent on groundwater through supply chains. According to Aquastat, 19% of global freshwater withdrawals come from industry and energy.
In terms of water withdrawal, the beverage and bottled mineral water sectors need to be careful because groundwater is a raw material for them. Globally, food and beverage companies face disputes with local communities over the amount of groundwater that can be withdrawn without depleting local resources.
Diageo Plc (Diageo) is an alcoholic beverages company that produces, distributes, markets, and sells spirits, and beer products. The company markets products under Johnnie Walker, Smirnoff, Baileys, Captain Morgan, Tanqueray, Guinness, McDowell’s No.1, and CIROC brand names.
In fiscal 2022, Diageo withdrew 17.5 million cubic meters of water, an increase of 4% over fiscal 2021. 35% of water withdrawn by Diageo was from water-stressed areas. Water consumption in Diageo’s operations was 5.5 million cubic meters of water in fiscal 2022 increased by 5% over fiscal 2021. Water consumed by the beverage company is obtained mainly from mains water, groundwater, and surface water with mains water providing 53% of water withdrawn by the beverage company and groundwater providing 37% in fiscal 2022.
In fiscal 2022, Diageo’s total water discharge was 12 million cubic meters of water of which 6 million cubic meters of water were sent to third-party while 3 million cubic meters of water were discharged into the sea.
In fiscal 2022, Diageo’s water efficiency was 4.13, improved by 3.7% compared to fiscal 2021. By 2030, Diageo aims to improve water efficiency by 40% in its operations.
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