Ethical Performance
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Food and drink firms make water their new priority

March 2008

Leading food and drink makers have signed a collective agreement to cut their water use in the UK, providing further evidence that the issue is now a key corporate responsibility concern.

The 21 companies, which include Cadbury Schweppes, Coca-Cola Enterprises, Kelloggs, Kraft Foods UK, Premier Foods, Tate & Lyle, Unilever UK and United Biscuits, have agreed that by 2020 they will try to cut water use by a fifth compared with 2007, excepting the liquid content of products themselves. The food manufacturing sector accounts for ten per cent of the UK’s industrial water use.

The companies say the voluntary agreement, brokered by the Food and Drink Federation, was a response to the government’s Food Industry Sustainability Strategy. They estimate it may save 140 million litres daily and reduce costs by about £60million ($118m) a year.

The signatories have a combined annual turnover of more than £15billion, and others are expected to join during the next few months.

They will start by reviewing their on-site use with the government-funded consultancy Envirowise, which will help the companies develop ‘site-specific action plans’ within six months to cut wastage and will monitor their progress towards the 2020 goal.

Water use has become an increasingly high priority for business in the last year. Coca-Cola, Nestlé and PepsiCo are among companies that have set water management policy targets. Cost aside, businesses cite a combination of factors that have led them to act, including climate change, ageing infrastructure and rising demand worldwide, particularly in India and other emerging markets, where water scarcity has provoked protests.

Sally Uren, business programme director at the Forum for the Future think-tank, said the agreement was an important landmark ‘as it focuses attention and action on perhaps the next urgent sustainability issue’.

The latest edition of the United Nations Global environmental outlook report, known as GEO-4, warns that 1.8 billion people could be living in areas with absolute water scarcity by 2025 and two-thirds of the world’s population subject to ‘water stress’. It says ‘concerted global action’ is needed.

A number of investment houses, including Citigroup and Sustainable Asset Management, have recently published research on the economic implications and associated business risks, focusing in particular on the investment opportunities in companies offering products and services to manage water use.

The Global Environmental Management Initiative, a non-profit body, has produced a Water Sustainability Tool for companies and the World Business Council for Sustainable Development has brought in similar guidelines for businesses assessing the operational and supply-chain risks.

Food and Drink Federation | Global | Sustainability

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