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Groundwater is withdrawn by industries such as manufacturing, mining, oil and gas, energy and utilities, and construction.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 Globally, food and beverage companies face disputes with local communities over the amount of groundwater that can be withdrawn without depleting local resources.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, Coca-Cola, JBS, Tyson Foods, and Nestle were major FMCG companies 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Foods withdrew 864 million cubic meters of water, an increase of 2% over 2020, and reused 25% of the total water withdrawn in the same year.
Coca-Cola is a producer, distributor, and marketer of non-alcoholic beverages. In 2021, Coca-Cola withdrew 298 million cubic meters of water, an increase of 6% over 2020. Water withdrawal by Coca-Cola is obtained mainly from groundwater and third parties, with groundwater providing 46% of Coca-Cola's water withdrawals and third parties providing 48% in 2021.
JBS is a food processing company that processes beef, pork, poultry and lamb, chicken, and other convenience food products. In 2021, JBS withdrew 177 million cubic meters of water, an increase of 3.6% over the year 2020. The company aims to reduce water use by 15% on an absolute basis by 2030, as compared to 2017.
Tyson Foods and Nestle were among the leading companies with significant water withdrawal in 2021 with 121 million cubic meters and 98 million cubic meters of water withdrawn, respectively.
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