On July 28, the United Nations General Assembly passed a non-binding resolution recognizing access to clean water as a fundamental human right (.pdf). This U.N. resolution will likely feature in corporate dialogues with stakeholders regarding water use, water access, water production, and the impact of corporate activities on local watersheds.
Finding solutions that provide for the current and future needs of all water users is imperative. The stakes for both companies and communities are significant: a recent report by the 2030 Water Resources Group, a coalition of major multinational companies, observed that:
growing competition for scarce water resources is a growing business risk, a major economic threat that cannot be ignored, and a global priority that affects all sectors and regions. It is an issue that has real implications for the stability of countries in which businesses operate and the sustainability of communities and the ecosystems they rely upon.
Community concerns about water use, and water access, have affected the social license to operate of companies in a wide range of business sectors. Another recent report, Water Scarcity & Climate Change: Growing Risks for Businesses and Investors, produced by Ceres and the Pacific Institute, found that food and beverage, oil, and chemical companies are particularly exposed to advocacy, and litigation, in this area. Examples include:
- In Newmont Mining’s recent Community Relationships Review, based on a study of six of the company’s mines, we observed that community perceptions of mining’s impact on local water resources was significant factor in the company’s capacity to engage with local communities.
- The Coca-Cola Company and PepsiCo Inc. have faced widespread community protests, and litigation, in India due to community allegations that the companies’ use of local groundwater supplies has contributed to water scarcity and the pollution of available water supplies.
In this context, and prior to the adoption of the U.N. resolution, a number of companies have faced pressure to recognize water as a human right. In 2010, shareholder resolutions were filed against ExxonMobil and Intel asking them to adopt water policies articulating respect for and commitment to the human right to water. Similar resolutions were filed against Pepsi and American International Group in recent years. In the face of such pressure, Pepsi and Intel have both formally recognized the human right to water.
Shareholder activity around water is likely to continue. The Ceres/Pacific Institute report cited above observed that:
investors are now filing resolutions asking companies for more disclosure on water practices and performance, including water policies, environmental and social impacts of water use, and water usage throughout the value chain. A large number of resolutions also ask for new company-wide policies on the human right to water, water reuse and recycling, and water-efficient technology.
In this context, the U.N. resolution will likely increase pressure on companies to incorporate water access into their human rights policies and assessments. Although the resolution is non-binding and does not impose specific obligations on companies (or countries), it represents a clear declaration by the international community that corporate use of water resources has fundamental human rights implications.