Water protection is a human right
Water protection along supply chains requires clear rules and joint action.
© freepik / jcomb
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.
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.
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’s study ‘Water responsibility as corporate due diligence?’
