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Groundwater is withdrawn by industries such as manufacturing, mining, oil and gas, energy and utilities, and construction.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 Globally, food and beverage companies face disputes with local communities over the amount of groundwater that can be withdrawn without depleting local resources.
Water withdrawal by companies means freshwater taken from the ground, surface, or other water sources, permanently or temporarily for use in products. Associated British Foods, Unilever, Diageo, Reckitt Benckiser, and British American Tobacco were major FMCG companies in the UK with significant water withdrawal in 2021
Associated British Foods is a diversified food processing and retail group. 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Foods withdrew 864 million cubic meters of water, an increase of 2% over 2020, and reused 25% of the total water withdrawn in the same year.
Unilever is a manufacturer and supplier of fast-moving consumer goods. In 2021, Unilever withdrew 30 million cubic meters of water, an increase of 2% over 2020. The total water withdrawn from regions with high or extremely high baseline water stress was 11.5 million cubic meters.
Diageo Plc (Diageo) is an alcoholic beverages company that produces, distributes, markets, and sells spirits, and beer products. In fiscal 2021, Diageo withdrew 17 million cubic meters of water. By 2030, Diageo aims to improve water efficiency by 40% in its operations.
Reckitt Benckiser and British American Tobacco were among the leading companies with significant water withdrawal in the UK in 2021 with 8 million cubic meters and 4 million cubic meters of water withdrawn, respectively.
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