Water Sustainability Index reshapes corporate water reporting

Researchers have developed a new method of scoring corporate water use that produces markedly different results for identical volumes of water withdrawn, depending on the level of water scarcity in the location concerned.

The result reframes corporate water reporting as an assessment of local harm rather than a competition over eye-catching headline totals.

Water reporting gap grows

Among 55 large United States companies, the issue was already apparent: corporate water disclosures lagged well behind carbon reporting.

Responding to this imbalance, William A. Mitch, professor of civil and environmental engineering at Stanford University, created a location-based score.

As the index accounts for both scarcity and water source, a withdrawal of 3.785 million litres does not have equal significance in every river basin.

Although this more precise local perspective cannot independently remedy poor disclosure, it makes broad and imprecise corporate water claims far more difficult to defend.

Local conditions determine water risk

Water is a local resource because every watershed - the area of land that drains into a single basin - has distinct supplies and pressures.

In an arid basin, an equivalent withdrawal leaves less water available for agriculture, households and ecosystems than it would in a wetter area.

Extracting groundwater, which is held in underground rock, may be more damaging because those reserves replenish more slowly than rivers and lakes.

This is why relying on raw volumes can make a company appear better than it is when it operates in an already water-scarce location.

How the Water Sustainability Index works

The Water Sustainability Index (WSI) combines withdrawals, consumption, discharge quality and reuse, rather than measuring water intake alone.

By assessing both water entering a site and wastewater leaving it, the index records what a facility removes and what it puts back.

Greater consumption reduces the score, as water that does not return to the basin is unavailable to other local users.

The individual components remain clear, enabling managers to establish whether an improved score results from cleaner discharge, reduced consumption or both.

Scarcity raises the penalties

The WSI incorporates scarcity through weighting factors that increase the penalty for facilities operating in places where water is already limited.

When water stress - demand approaching the available supply - exceeds 40%, the score penalises additional withdrawals far more severely.

Groundwater receives larger penalties too, since underground water supplies generally recover much more slowly once pumping starts.

This approach favours companies that reduce demand or change water sources rather than simply transferring the same practices to another place.

Reuse alters results

In the team’s case studies, a facility facing high risk received a low score when it depended on groundwater in an area under water stress.

After the facility started reusing its own water, its score rose because it required less fresh water.

The company achieved additional improvements by raising water quality and selecting a more suitable operational location.

The findings indicate that the system allows companies to evaluate and compare options before committing to expensive choices.

A more transparent benchmark

The WSI does not replace ISO 14046, the framework used to measure water footprint; instead, it reduces complicated assessments to a single score.

Since each factor is specified, external assessors can identify why one facility performs strongly while another performs poorly.

This transparency also addresses a common issue in which one ratings provider commends a company while another gives it a poor grade.

One repeatable figure cannot eliminate disagreement, but it limits the scope for concealed formulas to undermine confidence.

What the WSI shows planners

For plant managers, the WSI serves as a planning instrument by identifying which improvement will change the score most quickly.

Relocating a facility by itself produced only limited improvements, so the model directs focus towards upgrades affecting water quality and reuse.

“The quantitative nature of the WSI allows companies to identify cost-effective pathways to improve water sustainability,” said Mitch.

Such forecasting is important when executives need to decide between costly retrofits, alternative sources and investments in water treatment.

Limits of water reporting

No scoring method can correct unreliable information, and the WSI still relies on companies accurately reporting withdrawals, discharges and reuse.

Because the index focuses on facility operations, it cannot alone account for every impact involving upstream suppliers or local communities.

Local regulation, public oversight and robust audits remain essential, because transparent calculations are only as dependable as the information supplied to them.

Nevertheless, an open formula is much easier to scrutinise than a polished pledge unsupported by figures.

Water stress and public trust

Beyond the corporate sector, 25 countries already experience extremely high water stress annually, making it increasingly difficult to overlook local water damage.

In this context, Goal 6 - the United Nations target covering clean water and sanitation - requires more effective corporate measurement.

Without it, greenwashing - the exaggeration of environmental progress in public statements - can enable companies to receive approval while water-stressed basins continue to bear the cost.

A score based on local conditions cannot resolve the crisis, but it can reveal which organisations are reducing pressure and which are not.

The future of water reporting

The paper does not present a complete solution; it provides a clearer method for linking corporate statements to the physical consequences of water use.

Should companies adopt the WSI on a broad scale, investors, regulators and neighbouring communities would have a stronger foundation for challenging false claims.