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Groundwater is withdrawn by industries such as manufacturing, mining, oil and gas, energy and utilities, and construction.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 Globally, food and beverage companies face disputes with local communities over the amount of groundwater that can be withdrawn without depleting local resources.
Associated British Foods Plc (ABF) is a diversified food processing and retail group. The company's major businesses include sugar, ingredients, grocery, agriculture, and retail. It also offers hot beverages, sugar and sweeteners, vegetable oils, bread and baked goods, cereals, herbs and spices, ethnic foods, and meat products.
In 2021, Associated British Foods withdrew 864 million cubic meters of water, an increase of 2% over 2020, and reused 25% of the total water withdrawn in the same year.
Associated British Foods withdrew 97% of the water from the surface followed by groundwater (18%), and municipal and other sources (1%). The company’s sugar business segment had a maximum water withdrawal of 835 million cubic meters in 2021.
Associated British Foods’ UK grocery segment aims to reduce 20% of the water consumed in the UK food and drink industry by 2025 (baseline 2018). Primark, one of the businesses of the company, has a goal to reduce the aggregate water footprints of new products sold by 30% and AB Sugar has a target of a 30% reduction in end-to-end supply chain water footprint by 2030 (baseline 2018).
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