# **ORGANIZATIONAL WATER FOOTPRINT**

Analyzing water use and mitigating water scarcity along global supply chains

Silvia Forin, Markus Berger, Jonas Bunsen, Matthias Finkbeiner

UNIVERSITÄTSVERLAG DER TU BERLIN

## **ORGANIZATIONAL WATER FOOTPRINT**

Analyzing water use and mitigating water scarcity along global supply chains

Silvia Forin, Markus Berger, Jonas Bunsen, Matthias Finkbeiner

UNIVERSITÄTSVERLAG DER TU BERLIN

## **CONTENT**


## **ABBREVIATIONS**


# **INTRODUCTION**

Freshwater is sustaining life on our planet but is under increasing pressure due to population growth, increased water consumption and pollution as well as climate change. Facing freshwater scarcity is one of the major challenges of the 21st century and included in the Sustainable Development Goals as a fundamental target of the international community UN (2015). Also the World Economic Forum has been highlighting the "water crisis" as one of the top global risks for many years (WEF 2020).

Water resources are unevenly distributed across the globe, which makes water scarcity a local problem at many places around the world. At the same time, international trade is expanding, and supply chains have an increasingly transnational character. Water that is used in basins subjected to scarcity, often located in the Global South, is integrated in production processes of industrialized countries (Lenzen et al. 2013; Tukker et al. 2014). Thus, a sustainable use of the world's limited freshwater resources is a global responsibility.

So far, most organizations only measure water use of their own facilities by means of environmental management systems or other internal accounting methods. These approaches, though giving an overview concerning on-site water demand and potential uction measures at the facility's location, do not account for the whole sphere of infuence of an orga ni zation on the world's freshwater resources. Water footprint studies of industrial products have revealed that water use at production sites is usually the tip of the iceberg only. The largest part of a product's water use and resulting impacts often occur in supply chains, e. g. in the production of agricultural goods, the mining of mineral resources, or the generation of fossil-based electricity (Berger et al. 2012; 2017; Forin et al. 2019).

In order to address this mismatch between water related hotspots along value chains and the focus of organizations on water use on their premises, the research project "Water Footprint for Organizations – Local Measures in Global Supply Chains (WELLE)" has been launched. It represents a multi-stakeholder research cooperation between TU Berlin, Evonik, German Copper Alliance, Neoperl, thinkstep, and Volkswagen and was funded by the German Federal Ministry for Education and Research (BMBF) within the funding measure GRoW (Global Resource Water). WELLE aims at supporting organizations in:


Typically, an organization is broadly defned as an entity which pursues a specifc goal or activity such as producing goods or providing services, for example, companies, public authorities, NGOs, etc.

Within the WELLE project a method for analyzing an organization's Water Footprint has been developed (Forin et al. 2019) along with a database<sup>1</sup> and the WELLE Tool<sup>2</sup> supporting its applicability. The method, database and presents the WELLE Tool have been tested and refned in case studies conducted by the industry partners. While the results of this research project have been published in great detail in scientifc journals, this document intends to provide guidance for practitioners who want to analyze water use and the resulting local consequences along the supply chains of their organization. The next section describes the procedure for conducting an Organizational Water Footprint study. Section 3 presents the WELLE Tool, which supports the application of the method. Finally, measures which can be taken to reduce an organization's Water Footprint and to mitigate water scarcity along supply chains are discussed in section 4. Practical examples from a case study conducted by the industry partner Neoperl are used throughout this guidance to illustrate the application of the method and WELLE Tool.

<sup>1</sup> https://welle.see.tu-berlin.de/#database

<sup>2</sup> http://wf-tools.see.tu-berlin.de/wf-tools/owf

Water footprint studies of industrial products have revealed that water use at production sites is usually the tip of the iceberg only …

## **MEASURING AN ORGANIZATION'S WATER FOOTPRINT**

The Organizational Water Footprint denotes an organization's water use and resulting local impacts throughout its entire value chain. In other words, the Organizational Water Footprint considers not only an organization's water use at its production facilities, but also the water used for energy generation and raw material production (upstream in the supply chain) as well as water use during the use and end-of-life phases of products (downstream). Additionally, all aspects of the organization itself are included, such as the water used by the cleaning service, the organization's garden and canteen, etc.

It should be noted that the term water use denotes the total freshwater input into an organization. Water consumption (consumptive use) is the fraction of water use which is not returning to the originating river basin due to mainly evaporation

and transpiration as well as product integration and discharge into other basins or the sea. Water pollution (degradative use) describes a use of water which reduces water quality.

The Organizational Water Footprint method follows the life cycle approach and builds upon the experience of two existing environmental assessment frameworks: Water Footprint and Organizational Life Cycle Assessment (O-LCA). Both frameworks have been standardized by the International Organization for Standardization and rely on the established Life Cycle Assessment (LCA) method. The technical specifcation ISO/TS 14072 (ISO 2014) refers to the application of LCA to organizations and is specifed by the Guidance

The Organizational Water Footprint denotes an organization's water use and resulting local impacts throughout its entire value chain

on O-LCA (UNEP 2015). O-LCA is a multi-impact method, i. e. it considers multiple environmental impacts (e. g. global warming, toxicity, acidifcation, etc.), not only those caused by water use. Water consumption and water pollution related impacts can be included in Organizational LCA too – among other impacts. The reference standard for Water Footprint, ISO 14046 (ISO 2014), does not exclude organizations but has been developed by taking a product life cycle perspective. A detailed juxtaposition of the two standards has been carried out in scientifc literature ( Forin et al. 2018). In order to facilitate the determination and analysis of Organizational Water Footprints, this Practitioners Guidance explains the main steps in an application-oriented manner.

Following the LCA framework, the method is divided into four phases:


#### FIGURE 1

#### The four phases of the Organizational Water Footprint method

FIGURE 1 shows the four phases. The goal and scope defnition and inventory analysis mostly rely on the Organizational LCA method. In the impact assessment phase, methods analyzing the local consequences of water use have been adopted from a Water Footprint background to refect specifc aspects relevant in an organizational context.

The Organizational Water Footprint method illustrated in this Practitioners Guidance sets its focus on performing an organization's water scarcity footprint, i. e. in assessing the impacts of water consumption throughout the value chain in relation to local water scarcity. However, the goal and scope and the inventory phase can also be used as a basis for assessing the impacts of water pollution, not included in this Practitioners' Guidance.

#### **GOAL AND SCOPE DEFINITION 2.1**

The goal and scope phase sets the framework for the Organizational Water Footprint study and describes why and how the Organizational Water Footprint study is conducted.

#### GOAL 2.1.1

Organizations can pursue multiple goals when applying the Organizational Water Footprint method – either as a stand-alone study or as a part of an O-LCA. The main opportunities for companies and other organizations are of analytical, managerial, and societal nature UNEP (2015). An overview according to this categorization is provided in FIGURE 2.

**ANALYTICAL GOALS**

#### FIGURE 2

Potential goals of an organization identified for the O-LCA method

UNEP 2015

Each organization and study is unique according to the main aims and their achievement potential within the temporal framework of an Organizational Water Footprint study. Certain goals listed in FIGURE 2 can only be reached in the long run. This applies for example for enhancing environmental tools with stakeholders and reducing operational costs. For this reason, it is recommendable to formulate short-term and long-term goals (by indicating the time frame) and prioritize them, to better manage expectations at all levels (see TABLE 1). In addition, practitioners should bear in mind that the achievement of each goal requires a specifc set of methodological elements listed in TABLE 1 e. g. data collection or reporting.

Due to the water-specifc character and the foreseen linkage with concrete measures to mitigate water scarcity, more specifc goals can be formulated for an Organizational Water Footprint study. One possibility is to further specify the O-LCA societal goal "Reduce pressure on the environment". For example, the organization can set the goal of initiating a water stewardship process (see section 4) in the main hotspots revealed by the study.

The water (scarcity)-related focus of this method suggests possibilities to prioritize goals. According to other existing initiatives in this sector (CDP 2018), water related issues are of great importance for shareholders, because they can bear severe business risks in certain areas if the organization relies on locally scarce water resources. Therefore, understanding business risks might be of high priority. Moreover, and in contrast to methods setting their

Identifying waterrelated business risks with Organizational Water Footprint can support strategic decisions

focus on on-site activities, Organizational Water Footprint allows for identifying water-related business risks along the whole supply chain, which in turn can support strategic decisions (e. g. the choice of or cooperation with suppliers) and enhancing environmental tools within stakeholders.

Determining the goal also helps designing the study. TABLE 1 shows the implications of diferent goals for the study design, e. g. for data collection, data granularity and the choice of the reporting fow.

Product related methods such as the Product Water Footprint and product LCA often aim at comparing diferent products that fulfl the

same function. Organizations difer according to their sector, product portfolio and product characteristics, internal procedures, size, and further characteristics. For these reasons, comparing the Water Footprint of diferent organizations might be misleading. ISO/TS 14072 requires for Organizational LCA to unambiguously state in the goal and scope phase of a study that the results are not intended to be used in comparative assertions for public disclosure. Since Organizational Water Footprint has the same subject of study – organizations – this method also does not foresee comparing diferent organizations. Notwithstanding this, one of the most useful applications of Organizational Water Footprint is performance tracking, i. e. comparing the organization's Water Footprint for diferent years (see analytical goal: tracking water-related environmental performance). This allows identifying whether managerial decisions or mitigation measures put into place were efective. Additionally, comparisons can be carried out internally to compare diferent facilities or production lines within the same organization – and so analyze which processes have the lowest water-related impacts.

To be fully in line with ISO 14046 and ISO/TS 14072, the following elements need to be stated additionally: the intended application, the reasons for carrying out the study, the intended audience, i. e. to whom the results of the study are intended to be reported, and whether the study is a stand-alone assessment or part of a LCA.

TABLE 1

# Guiding table to set the goals of the Organizational Water Footprint study


15

#### SCOPE 2.1.2

Scoping the study means defning what is going to be analyzed and how. According to the O-LCA guidance (UNEP 2015), the object of analysis is defned through three main qualitative and quantitative elements: the reporting organization; the reporting fow<sup>3</sup> ; and the system boundary.

#### REPORTING ORGANIZATION

Defning what is going to be analyzed is the starting point of the scoping phase. To take adequate account of the complexity of an organization, the subject of study, the consolidation method and the reporting period need to be included.

#### Subject of study

An Organizational Water Footprint study may address either the whole organization or a part thereof, for example one or more business division(s), brands, regions, facilities, or production lines. An Organizational Water Footprint study for a part of the organization can be a pilot assessment which can be extended to a complete Organizational Water Footprint study. The name and the description of (the part of) the organization under study needs to be declared in the scoping phase.

#### Consolidation method

Operations can have diferent legal and organizational structures. To provide a consistent framework for the Organizational Water Footprint study, it should be guaranteed that the responsibility for the environmental impacts identifed can be attributed to the organization according to consistent criteria.

ISO 14046 and ISO/TS 14072 require consolidating an organization's potential environmental impacts related to water by one of the following approaches:


If the organization owns and controls all its units, the two approaches are equivalent. The main advantage of the control approach is that only units on which the organization has full control are included. This facilitates both data collection and the implementation of mitigation measures derived from the study results. On the other hand, the equity share approach is

<sup>3</sup> ISO 14072 introduces an element of the scoping phase called "reporting unit", conceived as an equivalent to the functional unit for organizations. In this Practitioners Guidance, the reporting unit is split into a qualitative part (the reporting organization) and a quantitative part (the reporting fow), in order to allow a more precise description. Using the reporting unit as scoping element as in ISO 14072 is an option too.

able to capture the fnancial risk and rewards related to environmental impacts, and is more straightforward for complex organizations. Both the control and equity share approaches refer to direct activities (see section 2.2). Consolidation approaches do not apply for indirect activities, which are determined by tracing back direct activities' value chains.

#### Reporting period

The reporting period is the time frame for which the organization is being studied, e. g. a certain year. It is convenient to choose the reference period according to the requirements of other reporting schemes, e. g. fnancial ones.

#### REPORTING FLOW

The reporting fow is a quantitative measure for the output of the reporting organization and the reference for completing the inventory.

The reporting fow can be defned as the nature and amount of an organization's product portfolio. Organizations with a very diverse portfolio might cluster their products into product groups. If considered relevant, further elements (for each product group), such as quality or duration of products, might be included in the quantifcation too. The reporting fow can be expressed in physical terms (e. g. number of units for each product, mass, volume) or non-physical terms (revenues, number of employees). The latter solution might be the most suitable for organizations active in the service sector.

#### Activity variable

The Organizational Water Footprint method, though excluding comparisons between diferent companies, is suitable for tracking the environmental performance of one organization

in diferent years. To deliver a meaningful interpretation of performance tracking results, environmental impacts need to be set in relation to the organization's output, which also varies depending on the reporting period considered. For performance tracking, certain options for the quantifcation of the reporting fow are not suitable. For example, measuring the number of units per product type or product cluster might be insufcient for comparisons, since shifts in the product mix between diferent reporting periods are likely to occur. Aggregated values such as mass, volume, economic performance, or another type of "activity variable" might be preferred in this case.

For organizations with a diverse portfolio willing to track their performance, defning both the activity variable (unitary value) and the

reporting fow (representing the diversity of the portfolio) is advisable: The activity variable delivers a frst and easily communicable fgure to interpret the environmental performance development, while considering the reporting fow can help understanding changes in overall performance (e. g. due to changes in the production mix).

The Organizational Water Footprint method is suitable for tracking the environmental performance of one organization in different years

#### SYSTEM BOUNDARY

The system boundary defnes which processes are included in the analysis in line with the goal of the study.

Since organizations are complex systems, the system boundary should be defned along two dimensions:


#### ORGANIZATIONAL WATER FOOTPRINT OF NEOPERL — A CASE STUDY ILLUSTRATING THE ORGANIZATIONAL WATER FOOTPRINT METHOD

Neoperl GmbH, located in Müllheim, is a German company that provides technological solutions for the plumbing industry, with a focus on water saving devices. Given the success of Neoperl's fow regulators' Water Footprint study at the product level (Berger et al. 2017), the company decided to evaluate the impacts of their whole value chain on local water resources by carrying out a water scarcity footprint study within the WELLE project.

The aim of the study was to gain insights into the company's water use and resulting local impacts, both within the factory gates and in the supply chain. The results are intended to inform management decisions on impact reduction opportunities and raise attention to global water scarcity. The study was not intended for comparative assertions for public disclosure.

The operations controlled by the reporting organization were assessed cradle-to-gate for the reporting year 2016. The reporting fow, which can be used as an activity variable for cross-temporal performance tracking, was determined based on the amount of products sold during the reporting period.

#### FURTHER ELEMENTS

Further elements of the study should be defned in the scoping phase in line with ISO 14046 and ISO/TS 14072:


Please refer to Forin et al. (2019), ISO 14046 and ISO/TS 14072 for further details.

#### **INVENTORY ANALYSIS**

In the inventory phase, data is collected for all relevant water inputs and outputs:


The water inputs and outputs are collected for the processes taking place within the system boundary, i. e. not only the organization itself, but also primary and intermediate materials, energy carriers, the use and end-of-life phase. Next to direct withdrawal of water from rivers or aquifers, production processes often use tap water or deionized water. In such cases, the elementary fows related to the water treatment process (e. g. the water withdrawn from an aquifer to produce 1 m³ of tap water) need to be considered.

Collecting data for a whole organization is a complex task, which requires coordination within the organization itself and with suppliers. To facilitate this task, the Organizational LCA method provides a list of so-called "activities" the organization might be involved in FIGURE 3. Each activity includes several processes that possibly require water. Activities help mapping the data need and organizing the data collection. Furthermore, if water fows are tracked for each activity, it is easier to identify hotspots throughout the value chain and prioritize mitigation measures. Data for all activities included in the system boundary should be collected. Their granularity should be chosen according to the goals of the study (see TABLE 1).

Methods for environmental assessment at the organizational level propose diferent schemes and criteria for categorizing an organization's activities. The background is that internal or direct activities, for which an organization is responsible, are easier to assess than external or indirect activities, e. g. at the level of suppliers. Moreover, it is easier for an organization to reduce the impacts of the activities which it controls directly.

Besides GHG-Protocol categorization into scope 1, 2 and 3, other approaches such as Organizational LCA follow the supply chain rationale in the categorization. Therefore, the activities related to an organization are categorized into direct activities, indirect upstream activities, and indirect downstream activities.

Direct activities are owned or controlled by the reporting organization, i. e. the organization or part of the organization under study (UNEP 2015). The freshwater use associated with direct activities includes the water used in activities owned or controlled by the reporting organization. This means that e. g. tap water used in the reporting organization, also if purchased, is accounted as direct water use. On the other hand, the water used to produce tap water outside the reporting organization is considered as indirect water use.

Indirect activities (not owned or controlled by the organization) are classifed as upstream, if they are related to the upstream suppliers or support the tasks of the reporting organization (e. g. outsourced cleaning services, purchased machinery, external treatment of waste generated by the reporting organization). The freshwater use attributed to upstream suppliers represents the amount of water in the production of the purchased products.

Indirect downstream activities take place after the products have left the reporting organization and include distribution, the use and end-of-life phases of products. These include both

#### FIGURE 3

#### Categorization of an organization's activities and impact-based prioritization for data collection

Green: low priority; yellow: average priority; orange: high priority. Figure 3 by Forin et al. (2019) is licensed under CC BY 4.0.

the water directly required by the organization's products in the use phase (e. g. water for washing machines) and the indirect water use of the use phase (e. g. the water used in energy generation needed to run the washing machine). For companies acting at the beginning of the supply chain (e. g. raw material suppliers) it is dif cult to gather information about the use of their products. According to ISO/TS 14 072, in such cases companies might exclude (part of) their downstream activities from the system boundary. This exception does not apply if the organization's products are expected to have a high water use in the downstream phases, both direct and indirect (e. g. through energy use).

The most common activities and the related categorization are displayed in FIGURE 3. For example, mineral extraction can be performed either directly by the reporting organization (→ direct activity) or by suppliers (→ indirect upstream activity). Business travels can also be carried out with vehicles owned by the reporting organization (→ direct activity) or other vehicles (→ indirect upstream activity). The same applies for transportation/distribution, which can also occur downstream. Among the indirect upstream activities, two particular groups are highlighted: capital equipment and working-environment related activities. They include activities normally left unconsidered in product LCA or Product Water Footprint that are part of the organizational setting. Capital equipment refers to purchased goods (vehicles, machines, etc.) and is therefore in general indirect upstream. Working-environment related

activities such as canteen, gardening, cleaning services etc. are often outsourced (→ indirect upstream) but can also be carried out by the organization itself (→ direct).

It is important to consider that FIGURE 3 includes widespread activities and takes the producing industry as a reference, but is not exhaustive. Therefore, each organization might identify further activities and disregards the ones that do not apply.

Categorizing activities is helpful for data collection, since an overview on categories gives hints on "where to look at" when collecting data and helps "not to forget" relevant activities. Inventory data and impact assessment results can be aggregated at the activity level and help identifying activity-related hotspots. Therefore, it is recommendable to increase the granularity of crucial activities, if a detailed hotspot analysis is considered. For example, data for the direct activity "manufacturing" might be clustered according to facilities or production lines to obtain a more precise overview on critical processes.

#### PRIORITIZATION OF DATA COLLECTION EFFORTS FOR WATER SCARCITY FOOTPRINTS

Since collecting primary data is a time intensive task, criteria for identifying the most relevant activities are described for the Organizational LCA method (UNEP 2015). The most relevant criteria mentioned are quantitative aspects such as the expected environmental impacts and the relative contribution to the total inputs of the reporting organization. For the particular case of a single-indicator assessment such as water scarcity footprints considered here, these two aspects can be summarized and advice for prioritizing data collection can be provided. A frst overview, based on the experience gained in various Water Footprint studies, is indicated by the colors used in FIGURE 3: data collection should have the high priority for the activities highlighted in orange, average priority for the activities highlighted in yellow; low priority for the activities highlighted in green (see Forin et. al 2019 for more specifc information). The activity's location plays a major role, so it is recommended to accord higher priority to activities whose water use along the value chain takes place in water scarce regions (if known).

The following activities have variable priority levels, depending on specifc characteristics (as highlighted by the green-yellow-orange color gradient in FIGURE 3:

	- Fossil fuels: low
	- Biofuels: high
	- Mineral aggregates (e. g. sand, gravel), plastics: average
	- Otherwise: high
	- Waste disposal/treatment: average
	- Recycling: high
	- If e. g. special metals, electronics, rubber included: average
	- Otherwise: low
	- Large garden surface: average
	- Otherwise: low

#### • Cleaning services


#### • Storage of sold products


#### • Use or consumption of sold products


#### • Leased assets and franchises

• Highly variable depending on the type of goods/services. Please consider similar activities as orientation

#### For further information on variable prioritization see Forin et al. (2019).

*Please note: if a Water Footprint profile including also water quality is planned, the prioritization can change. These recommendations refer to water scarcity footprints only.*

Besides the criteria mentioned above based on the (expected) impacts, an organization might consider further criteria for prioritizing data collection (UNEP 2015) such as:


Further details on the criteria above are provided in UNEP (2015).

If primary data is not available or the resources to collect them are limited, secondary data from databases, case studies or trade data can be used to fll the gaps in the inventory. Secondary data might be necessary e. g. if suppliers "at the other end" of the supply chain cannot be identifed or their data is not made available.

#### DATA COLLECTION APPROACHES

Depending on the study design and data availability, data can be collected following two main diferent schemes.


In several cases, a hybrid approach might be used, e. g. if for only one facility product-related water use data is available. The combination of the bottom-up and top-down approach should be carried out consistently and existing diferences e. g. in data quality should be communicated transparently.

#### DATA RESOLUTION

Local water availability varies across regions and depending on seasonality. Common impact assessment methods include these aspects by providing characterization factors at a river basin scale with a monthly resolution. To take advantage of this progress in impact assessment, also inventory data needs to be collected with the highest possible geographical and temporal resolution. If feasible, water consumption data with a monthly resolution and a precise specifcation of the water consumption location should be collected. If this level of detail is not available, the country where water consumption takes place (e. g. the country of origin of purchased materials and underlying raw materials) should be documented.

#### FACILITATING DATA COLLECTION

Since data collection is a time demanding task, it is convenient to take advantage of previous experiences with environmental assessment tools. Inspired by suggestions for Organizational LCA (UNEP 2015), three main options can be suggested.


In order to facilitate data collection for water consumption in indirect activities, a water inventory database has been developed in the WELLE project as described below.

#### OFFSETTING AND AVOIDED IMPACTS

In line with ISO 14046, Water Footprint results do not include ofsetting. That is, activities initiated by the reporting organization which provide water (e. g. sea water desalinization) or reduce water consumption (e. g. via water efcient technologies) outside the organization's system boundaries cannot compensate for the Water Footprint results of an organization.

The same applies to avoided impacts within the system boundaries, i. e. water use or waterrelated impacts that do not take place if compared to a reference scenario. For example, if an organization's products save water compared to other products. A separate calculation of avoided impacts in the framework of an Organizational Water Footprint study is possible as a scenario analysis, but results without avoided impacts need to be displayed separately.

#### WELLE DATABASE

While most companies can monitor their internal activities rather easily, they rely on external data about the water consumption of their indirect upstream activities (e. g. material and energy supply chains). Thinkstep's life cycle inventory database GaBi 8 can be used for this purpose as it contains water use and consumption data related to the production of materials, the generation of energy, transports, etc. However, information concerning the volumes of water consumed per kg of a material or per kWh electric energy is not sufcient to enable the analysis of water scarcity footprints. Spatial information on where the water consumption has occurred throughout the supply chains is needed in order to combine it with local scarcity data and, in this way, to enable analyzing the resulting local impacts. Such spatially explicit water inventory data is currently available for relevant processes in the GaBi 8 database (energy and agricultural datasets), however, not for abiotic materials, manufacturing processes, transports, etc. Therefore, a WELLE water database has been created by enhancing datasets from the GaBi database as follows:

Relevant datasets were identifed by the industry partners participating in the WELLE project. These datasets were investigated comprehensively and modifed to provide the required spatially explicit water consumption data.

In general, two approaches were taken. In a "bottom-up" approach spatial information from the underlying LCA models was used to convert unspecifc water fows to country specifc fows. In the other "top-down" approach unspecifc water consumption data was mapped to diferent countries according to production statistics. For details please refer to Thinkstep (2020). Further, aggregated datasets (unit processes) are provided in a disaggregated form, allowing for the selection of country specifc energy and material mixes or market mixes based on several countries.

The WELLE database, which contains spatially explicit water inventories for about 150 material and energy datasets can be accessed online along with a detailed description of the database development<sup>4</sup> . It is also integrated into the WELLE Tool presented in section 3.

4 http://welle.see.tu-berlin.de/#database

#### INVENTORY ANALYSIS OF NEOPERL'S ORGANIZATIONAL WATER FOOTPRINT

To facilitate data collection and interpretation of results, company activities were defned and classifed into direct activities and indirect upstream activities based on the general categorization scheme (FIGURE 3). The outcome is shown in FIGURE 4.

Neoperl collected direct water consumption data from internal measurements. The data collection for indirect activities followed the top-down data collection approach described above. For purchased materials and energy as well as for supporting activities, company-own data was collected (purchased materials and energy, business travels, meals in canteens, buildings, machines, etc.). The associated water consumption in supply chains was determined by means of the WELLE database described above and the WELLE Tool presented in section 3.

#### FIGURE 4

Low priority activity

data.

#### Neoperl's organization model for the organizational water scarcity footprint case study

Figure 4 by Forin et al. (2020a) is licensed under CC BY 4.0.

Neoperl's value chain freshwater consumption in 2016 was around 110,000 m³. The main contributors to freshwater consumption along Neoperl's value chain are indirect upstream activities, mainly metals (FIGURE 5). Within the metal category, disaggregated results show that stainless steel contributes to 74 % of water consumption in this category, followed by brass (11 %). Water from 34 countries are involved in Neoperl's value chain, with China and Germany dominating the results (28 % and 23 % respectively) (FIGURE 6).

#### FIGURE 5

Neoperl GmbH's 2016 Organizational Water Footprint — Potential freshwater consumption by activity

Forin et al. 2020a

#### FIGURE 6

#### Neoperl GmbH's 2016 Organizational Water Footprint — Potential blue water consumption by country

The inventory analysis reveals the volumes of water consumed in diferent regions along an organization's supply chain. However, a water consumption of 1 m³ in a water abundant region does not compare to consuming the same amount of water in a water scarce area. Therefore, the impact assessment step translates the volumes of water consumption into potential local impacts.

For this, volumetric water fows compiled in the inventory analysis are multiplied with region-specifc characterization factors which account for the fows' impacts within designated impact categories. Examples for intermediate (midpoint) impacts along the cause-efect

a water consumption of 1 m³ in a water abundant region does not compare to consuming the same amount of water in a water scarce area. chain of water use include water deprivation for human needs such as domestic use or agriculture as well as depriving ecosystems from water. Impacts on the fnal (endpoint) steps of the cause efect chain of water use include damage on human health caused by spreading of diseases or malnutrition as well as damages to ecosystems such as loss of terrestrial or aquatic species e. g. by changing fow regimes of rivers or lowering groundwater tables.

The ISO 14046 standard does not prescribe the use of specifc impact assessment methods but sets requirements which they need to fulfll. Accordingly, methods like AWaRe (Boulay et al. 2018), WAVE+ ( Berger et al. 2018) or other relevant impact assessment methods may be applied.

Practitioners who work with very large inventories relative to the water availability in the respective basin should pay attention to potential "non-marginal efects". These can occur if the consumption of large volumes of water in basins with relatively low availability changes the water scarcity value of the entire basin and, thus, renders existing characterization factors inaccurate. See Boulay et. al (2019) and Forin et al. (2020) for further information.

#### IMPACT ASSESSMENT OF NEOPERL'S ORGANIZATIONAL WATER FOOTPRINT

The local impacts of Neoperl's water consumption were calculated by means of the AWaRe method (Boulay et al. 2018), which describes the potential of depriving other users from using water when consuming water in a certain basin.

From an activity category perspective, purchased metals are the main contributors to local water scarcity (FIGURE 7). The impacts were mainly caused by stainless steel and brass (49 % and 25 % of Neoperl's total impacts, respectively). From a spatial perspective, the most afected countries were China (40 % of total impacts) and Chile (23 %). While impacts in Chile were mainly related to the copper mining in the brass supply chain, China was involved in several materials' supply chains, including the material hotspot stainless steel (FIGURE 8).

2.5 % of Neoperl's water scarcity impacts are related to supporting activities. The main contributor is machinery, mainly due to the aluminum components. The infuence of direct activities is very limited (0.1 %), due to the low AWaRe factor at the facility's location in Southern Germany.

#### FIGURE 7

Forin et al. 2020a

#### FIGURE 8

#### Neoperl GmbH's 2016 Organizational Water Footprint — Water scarcity-weighted freshwater consumption by country

#### **INTERPRETATION**

Interpreting the results from a life-cycle oriented study includes:


#### INTERPRETATION OF NEOPERL'S ORGANIZATIONAL WATER FOOTPRINT

Analyzing Neoperl's water consumption and resulting local impacts along the entire value chain allowed for revealing the most relevant activities (purchase of stainless steel and brass) and identifying local hotspots in global supply chains (China and Chile). A comprehensive analysis of these signifcant issues has shown that the underlying data is complete and consistent with the study's goal and scope defnition.

A further signifcant issue is the modelling of the use phase of Neoperl's products, which partly reduce water use in households. As these water savings cannot be subtracted from the company's Water Footprint directly (see section on avoided impacts above), a scenario analysis has been conducted. Results show that the water consumption reduction potential of Neoperl's fow regulators (30,000,000 pieces produced during the reporting year) is 216 times higher than the company's total water consumption including supply chains.

3

# **THE WELLE TOOL**

An Online application to support an Organizational Water Footprint assessment

The WELLE Tool is a free online application<sup>5</sup> which assists companies in calculating their Organizational Water Footprint following the Organizational Water Footprint method described in section 2. Users can enter the direct water use at premises as well as indirect upstream activities (e. g. amounts of purchased materials and energy), indirect downstream activities (e. g. volumes of water consumed in products' use phases), and supporting activities (e. g. business trips) as listed in TABLE 2. By linking this information to the activity specifc water consumption data provided by the WELLE database, the organization's water consumption along its value chain is determined. Further, the WELLE Tool applies country-specifc characterization factors to the country-specifc water consumption data available in the WELLE database and, in this way, allows for analyzing the resulting local impacts.

In the following, input and result sections of the WELLE Tool are summarized.

5 The WELLE Tool is available via https://wf-tools.see.tu-berlin.de/wf-tools/owf.

#### FIGURE 9

**3.1**

#### Input mask of the WELLE Tool


#### **INDIRECT UPSTREAM ACTIVITIES**

Indirect upstream activities comprise an organization's energy and material supply chains. For fuels and energy, users of the WELLE Tool can distinguish between diferent types of fuel and sources of energy, e. g. crude oil, diesel, hard coal, heavy fuel, natural gas, grid mix electri city, electricity from biomass, hydro power, electricity from lignite, electricity from natural gas, nuclear power, photovoltaic or electricity from wind power. For purchased materials, users of the WELLE Tool can choose from a wide range of materials that are often purchased by companies such as chemicals, polymers, metals, agricultural products, or packaging materials.

#### **DIRECT ACTIVITIES 3.2**

Direct activities comprise processes at an organization's premises. Typically, direct activities refer to the manufacturing of products or the provision of services. Users of the WELLE Tool can distinguish between diferent types of input water such as deionized water, freshwater extraction from natural water sources as well as tap water. Analogously, users can specify water discharge (output) which is separated as the release of freshwater or wastewater.

#### **INDIRECT DOWNSTREAM ACTIVITIES 3.3**

Indirect downstream activities comprise downstream life cycle stages of an organization's products or services e. g. processing of sold products, storage of sold products, use or consumption of sold products, end-of-life of sold products as well as leased assets and franchises. Users of the WELLE Tool can enter the water consumption occurring in these downstream activities and the respective locations directly.

### **3.4**

#### **SUPPORTING ACTIVITIES**

Supporting activities comprise overhead activities that are required to keep an organization operating. Users of the WELLE Tool can enter activities such as employee commuting, provision of food to employees in a canteen, business travels by plane, train and road transportation (which can also be represented through the amount of purchased diesel), maintaining a work environment (work places, administration, cleaning services, gardening, research and development) as well as capital equipment of an organization (building, machinery, company cars).

#### FIGURE 10

#### Screenshot vom WELLE Tool der supporting activities

#### TABLE 2

#### Input sections of the WELLE Tool.



#### **RESULTS 3.5**

Results are displayed on a world map and in stacked bar charts for the default and an ( optional) alternative scenario.

#### RESULT MAPS 3.5.1

Four maps display the volumetric water consumption (blue Water Footprint) as well as the water scarcity footprint (impact assessment result determined based on AWARE) for both scenarios. Upon clicking on a country, the individual contributions of the four activities. are displayed.

35

#### FIGURE 11

#### Visualization of the regional water consumption impacts

#### RESULT CHARTS 3.5.2

The stacked bar charts display the volumetric water consumption (blue Water Footprint) as well as the water scarcity footprint (impact assessment result determined based on AWARE) for both scenarios within one chart at a time. Separate charts for the input sections *indirect upstream activities, direct activities* and *indirect downstream activities* as well as overall results are available. Diferent colors allow the user to conclude on what specifc activities contribute to the aggregated result e. g. purchased fuels and energies, purchased goods and materials, services etc.

#### FIGURE 12

#### Visualization of the water consumption per life cycle stage

4

## **REDUCING AN ORGANIZATION'S WATER FOOTPRINT AND MITIGATING WATER SCARCITY ALONG SUPPLY CHAINS**

So far, a method for determining Organizational Water Footprints has been introduced and a database and online tool for supporting its application have been presented, which have been tested and refned by industry partners in the WELLE project:


The Organizational Water Footprint results reveal hotspots in terms of water consumption and local impacts along the value chain, which can be used as a starting point to reduce water consumption and mitigate local water scarcity. The four WELLE case studies and other studies have shown that an organization's direct water consumption usually contributes to less than 5 % of its total Water Footprint only.

For this reason, optimization strategies need to consider an organization's entire value chain. Next to on-site focused environmental management systems (EMAS 2011, ISO 2015), water stewardship measures, ecodesign approaches, and a sustainable procurement strategy are advocated (FIGURE 9).

While the leverage of reducing an organization's Water Footprint is usually larger in supply chains, the organization's control on water consumption patterns is decreasing along supply chain levels. Ideally, an organization's water scarcity mitigation strategy comprises the con-

#### FIGURE 13

Measures for reducing an Organization's Water Footprint and the life cycle stages which they target.

current implementation of several measures tackling all water use hotspots regardless of the life cycle stage at which they occur. When trying to reduce an organization's Water Footprint, care should be taken to avoid shifting water-related environmental impacts to other environmental burdens (e. g. from the water to the carbon footprint).

#### **WATER STEWARDSHIP MEASURES 4.1**

The International Water Stewardship Standard developed by the Alliance for Water Stewardship (AWS) focuses predominantly on sustainable development of local water resources and defnes water stewardship as "the use of water that is socially and culturally equitable, environmentally sustainable and economically benefcial, achieved through a stakeholder-inclusive process that involves site- and catchment-based actions" (AWS 2019). Implementation of local water stewardship or comparable measures at an organization's premises can be useful, if an organization's direct water consumption contributes a relevant share to its total Water Footprint.

If the hotspots of an organization's Water Footprint have been identifed in the supply chains, the organization can try to initiate water stewardship process together with suppliers operating in critical basins. In collective action involving the supplier, other water users in the basin, the local administration, the public, NGOs, and other relevant stakeholders, diferent measures can be pursued including:


If a direct involvement in water stewardship activities of suppliers seems not possible, organizations may request certifcates from suppliers to prove responsible water management. If possible, organizations can support suppliers in receiving such certifcations. Incentivizing suppliers to introduce sustainability measures may be an easy task for multi-national corporations but can turn out to be difcult for small organizations purchasing from large companies. In such cases, companies may want to reconsider their procurement strategy or resort to ecodesign approaches.

#### **ECODESIGN 4.2**

*Ecodesign* is defned by the European Commission as "a preventive approach, designed to optimize the environmental performance of products, while maintaining their functional qualities" (EU 2009) and may be applied under specifc consideration of water. Organizations can apply ecodesign to decrease the Water Footprint of their products and services, and thus of the organization, by considering water use aspects along the life cycle of a product already in its design phase.

	- Use: Design for low water requirements during the use phase of a product or service or provision of consumer guidance for water efcient use
	- End-of-life: Recycling or disposal without water intensive or water polluting processes

#### **SUSTAINABLE PROCUREMENT**

As supply chain activities often cause the largest share of an organization's total water use and resulting impacts, the procurement is key in reducing an organization's Water Footprint.

An organization's procurement strategy may be rendered more sustainable in terms of water use impacts by:


#### REDUCING NEOPERL'S ORGANIZATIONAL WATER FOOTPRINT

Neoperl runs an environmental management system (ISO 14001) and its own production facilities use water as efciently as possible. Since the largest share of Neoperl's Water Footprint has been identifed in the indirect upstream activities, the abovementioned mitigation measures have been explored.

Initiating water stewardship processes at suppliers turned out to be unfeasible considering changing suppliers and purchases from large multinational corporations. Sustainability aspects are already part of Neoperl's purchase strategy but specifc water related criteria would be difcult to implement. Finally, Neoperl explored and implemented ecodesign measures focusing on the substitution of water intense materials. As a concrete example, hose stainless-steel reinforcements were partly substituted by polyamide (PA6) which lead to an estimated saving of more than 8,500 m³ freshwater as well as a potential reduction of the products' water scarcity impact by 97 %.

# **SUMMARY**

5

Freshwater is a vital resource for humans and ecosystems but it is scarce in many regions around the world. Organizations measure and manage direct water use at their premises but usually neglect the indirect water use associated with global supply chains – even though the latter can be higher by several orders of magnitude.

Against this background, the BMBF funded research project "Water Footprint for Organizations – Local Measures in Global Supply Chains (WELLE)" has been launched by TU Berlin, Evonik, German Copper Alliance, Neoperl, thinkstep and Volkswagen. The project aims to support organizations in determining their complete Organizational Water Footprint, identifying local hotspots in global supply chains and taking action to reduce their Organizational Water Footprint and mitigate water scarcity at critical basins.

Within the WELLE project a method for analyzing an organization's Water Footprint has been developed (Forin et al. 2019). This Practitioners' Guidance intends to support stakeholders in conducting Organizational Water Footprint studies by presenting the method in a clear and concise way and by illustrating each step with a practical example. Further, the WELLE database, which provides water consumption data of an organization's indirect activities (material and energy purchase, business trips, canteens, etc.) in a spatially explicit way is introduced. In order to facilitate the application of the method and the database, the WELLE Tool has been developed and a manual for its application is presented in this guide. Finally, options to reduce an organization's Water Footprint and to mitigate local water scarcity by means of water stewardship approaches, sustainable purchase strategies and ecodesign measures are presented.

By analyzing their Water Footprints, organizations can determine water use and resulting local impacts at premises and "beyond the fence" along global supply chains. In this way they can reduce water risks and contribute to a more sustainable use of the world's limited freshwater resources.

#### **6 WELLE RESOURCES**

#### **ONLINE RESSOURCES** 43


#### **READING ADVICE 6.2**

The Organizational Water Footprint Practitioners' Guidance "Organizational Water Footprint – Analyzing water use and mitigating water scarcity throughout supply chains" was developed as part of the BMBF-funded project *WELLE*. Two ISO standards, namely ISO 14046 and ISO 14072, were critical in developing the Organizational Water Footprint method. Readers are advised to read these standards in order to familiarize themselves with terminology and methodological aspects used in the Organizational Water Footprint Practitioner's Guidance.


Additional references on the development and rational of the Organizational Water Footprint method include:


## **7 BIBLIOGRAPHY**

**7**

<sup>44</sup> AWS. 2019. 'International Water Stewardship Standard – Version 2.0'. Alliance for Water Stewardship. https://a4ws.org/wp-content/uploads/2019/03/AWS\_Standard\_2.0\_2019\_Final.pdf.

Berger, Markus, Stephanie Eisner, Ruud van der Ent, Martina Flörke, Andreas Link, Joseph Poligkeit, Vanessa Bach, and Matthias Finkbeiner. 2018. 'Enhancing the Water Accounting and Vulnera bility Evaluation Model: WAVE+'. *Environmental Science & Technology* 52 (18): 10757–10766. https:// doi.org/10.1021/acs.est.7b05164.

Berger, Markus, Michael Söchtig, Christoph Weis, and Matthias Finkbeiner. 2017. 'Amount of Water Needed to Save 1 M3 of Water: Life Cycle Assessment of a Flow Regulator'. *Applied Water Science* 7 (3): 1399–1407. https://doi.org/10.1007/s13201-015-0328-5.

Berger, Markus, Jens Warsen, Stephan Krinke, Vanessa Bach, and Matthias Finkbeiner. 2012. 'Water Footprint of European Cars: Potential Impacts of Water Consumption along Automobile Life Cycles'. *Environmental Science & Technology* 46 (7): 4091–4099. https://doi.org/10.1021/ es2040043.

Boulay, Anne-Marie, Jane Bare, Lorenzo Benini, Markus Berger, Michael J. Lathuillière, Alessandro Manzardo, Manuele Margni, et al. 2018. 'The WULCA Consensus Characterization Model for Water Scarcity Footprints: Assessing Impacts of Water Consumption Based on Available Water Remaining (AWARE)'. *The International Journal of Life Cycle Assessment* 23 (2): 368–378. https:// doi.org/10.1007/s11367-017-1333-8.

Boulay, Anne-Marie, Lorenzo Benini, and Serenella Sala. 2019. 'Marginal and Non-Marginal Approaches in Characterization: How Context and Scale Afect the Selection of an Adequate Characterization Model. The AWARE Model Example'. *The International Journal of Life Cycle Assessment*, August. https://doi.org/10.1007/s11367-019-01680-0.

CDP. 2018. 'Treading Water: Global Water Report 2018'. *Carbon Disclosure Project* 2018. https:// www.cdp.net/en/research/global-reports/global-water-report-2018.

EMAS, European Commission. 2011. '2011/832/EU: Commission Decision of 7 December 2011 Concerning a Guide on EU Corporate Registration, Third Country and Global Registration under Regulation (EC) No 1221/2009 of the European Parliament and of the Council on the Volun tary Participation by Organisations in a Community Eco-Management and Audit Scheme (EMAS)'. Ofcial Journal of the European Union. https://eur-lex.europa.eu/legal-content/EN/ TXT/?uri=CELEX:32011D0832.

EU 2009. *Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 Establishing a Framework for the Setting of Ecodesign Requirements for Energy-Related Products (Text with EEA Relevance). 285.* Vol. OJ L. http://data.europa.eu/eli/dir/2009/125/oj/ eng.

Forin, Silvia, Markus Berger, and Matthias Finkbeiner. 2020. 'Comment to "Marginal and Non-Marginal Approaches in Characterization: How Context and Scale Afect the Selection of an Adequate Characterization Factor. The AWARE Model Example"'. *The International Journal of Life Cycle Assessment*, January. https://doi.org/10.1007/s11367-019-01726-3.

Forin, Silvia, Jutta Gossmann, Christoph Weis, Daniel Thylmann, Jonas Bunsen, Markus Berger, and Matthias Finkbeiner. 2020a. 'Organizational Water Footprint to Support Decision Making: A Case Study for a German Technological Solutions Provider for the Plumbing Industry https://doi. org/10.3390/w12030847.

Forin, Silvia, Natalia Mikosch, Markus Berger, and Matthias Finkbeiner. 2019. 'Organizational Water Footprint: A Methodological Guidance'. *The International Journal of Life Cycle Assessment*, August. https://doi.org/10.1007/s11367-019-01670-2.

Forin, Silvia, Markus Berger, and Matthias Finkbeiner. 2018. 'Measuring Water-Related Environmental Impacts of Organizations: Existing Methods and Research Gaps'. *Advanced Sustainable Systems* 2 (10): 1700157. https://doi.org/10.1002/adsu.201700157.

ISO 14001:2015. *Environmental management systems — Requirements with guidance for use*. https://www.iso.org/standard/60857.html.

ISO 14046:2014. *Environmental Management – Water Footprint – Principles, Requirements and Guidelines*. https://www.iso.org/standard/43263.html.

ISO 14072:2014. *Environmental Management – Life Cycle Assessment – Requirements and Guidelines for Organizational Life Cycle Assessment.* https://www.iso.org/standard/61104.html.

Lenzen, Manfred, Daniel Moran, Anik Bhaduri, Keiichiro Kanemoto, Maksud Bekchanov, Arne Geschke, and Barney Foran. 2013. 'International Trade of Scarce Water'. *Ecological Economics* 94 (October): 78–85. https://doi.org/10.1016/j.ecolecon.2013.06.018.

UNEP 2015. *Guidance on Organizational Life Cycle Assessment.* https://www.lifecycleinitiative. org/wp-content/uploads/2015/04/o-lca\_24.4.15-web.pdf.

Thinkstep. 2020. 'Organizational Water Footprint Tool *–* Database Documentation'. Sphera. http://welle.see.tu-berlin.de/data/WELLE\_DB\_Documentation.pdf.

Tukker, A, T Bulavskaya, S Giljum, A. de Koning, S Lutter, M Simas, K Stadler, and R Wood. 2014. *The Global Resource Footprint of Nations. Carbon, Water, Land and Materials Embodied in Trade and Final Consumption, Calculated with EXIOBASE 2.1.* TNO. https://www.exiobase.eu/index. php/publications/creea-booklet/73-creea-booklet-web-resolution/fle.

UN. 2015. 'Transforming Our World: The 2030 Agenda for Sustainable Development'. *Reso lution Adopted by the General Assembly*. https://www.un.org/ga/search/view\_doc.asp?symbol=A/ RES/70/1&Lang=E.

Wagnitz, Philipp, and Andrea Kraljevic. 2014. *The Imported Risk: Germany's Water Risks in Times of Globalisation.* Berlin: WWF. http://www.wwf.de/fleadmin/fm-wwf/Publikationen-PDF/WWF\_ Study\_Waterrisk\_Germany.PDF.

WEF. 2020. *The Global Risks Report 2020.* Geneva, Switzerland: World Economic Forum. http:// www3.weforum.org/docs/WEF\_Global\_Risk\_Report\_2020.pdf.

#### Bibliographic information published by the Deutsche Nationalbibliothek

The Deutsche Nationalbibliothek lists this publication in the Deutsche National bibliografe; detailed bibliographic data are available on the Internet at http://dnb.dnb.de.

Universitätsverlag der TU Berlin, 2021 https://verlag.tu-berlin.de

Fasanenstr. 88, 10623 Berlin Tel.: +49 (0)30 314 76131 E-Mail: publikationen@ub.tu-berlin.de

This work – except for quotes, fgures and where otherwise noted – is licensed under the Creative Commons Licence CC BY 4.0 http://creativecommons.org/licenses/by/4.0

Layout/typesetting: Sebastian Vollmar; vivid shapes Design, www.vividshapes.com Cover image: Sebastian Vollmar; vivid shapes Design, www.vividshapes.com

ISBN 978-3-7983-3124-2 (online)

Online veröfentlicht auf dem institutionellen Repositoriumder Technischen Universität Berlin: DOI 10.14279/depositonce-11818 http://dx.doi.org/10.14279/depositonce-11818