Top companies score on sustainability, cut water consumption by 16% in FY23

With the Bengaluru water crisis serving to be a wakeup call for India Inc, here's a look at India Inc's water consumption on the World Water Day. As per the business responsibility and sustainability reporting (BRSR) data sourced from Prime Database, the water consumption of the top 1000 listed companies dropped 16% from 5 billion kilolitres (kl) in FY22 to 4.2 billion kl in FY23.

The top five listed corporate consumers of water - NTPC, Vedanta, Tata Steel, Reliance Industries and IOCL - together consumed 1.9 billion kl in FY23 - 2.6% higher than the previous year. However, three of these companies - Vedanta, Reliance Ind and IOCL - have reduced their y-o-y consumption by 6%, 0.9% and 3%, respectively.

A company's water consumption is the total water used by the entity that is no longer available for use by the ecosystem and is therefore not released back into the environment. It also includes water that has been stored during the reporting period for use or discharge in the subsequent reporting period. It is derived by deducting the amount of water discharged into the ecosystem from the total water withdrawn from the ecosystem by the entity.

The total water withdrawn (for any use) by all companies has also dropped nearly 7% from 15.5 billion kl to 14.4 billion kl during the same period. Nearly 60% of the water withdrawn has been from surface water sources such as rivers, lakes, ponds and streams. There has been nearly 4% y-o-y increase in such withdrawal. Incidentally, there has been a 64% decline in the water withdrawn from the ground from 1.3 billion kl to 0.5 billion kl. This coincided with 18% increase in water withdrawn from third parties (water from municipalities and other private suppliers) and 10% increase in water withdrawn from sea or ocean.

However, these are early trends as sustainability professionals have pointed out that FY23 being the first year of mandatory BRSR disclosures, there have been challenges in measurement of figures to be disclosed.

According to a white paper released last month jointly by XBRL and At Quest Sustainable Solutions on 'Unearthing Insights from India's ESG Disclosures' from BRSR for FY23, some companies have resorted to reporting zero values for essential metrics such as water withdrawal. Intensity values for water, for instance, are expected to be reported as 'intensity per rupee'; however, the denominator is often scaled to avoid insignificant intensity numbers. Inconsistent denominators result in considerable variations in intensity numbers even within the same industry, undermining the comparability and utility of the data.

The paper acknowledges that there is inevitably a learning curve, and it is often seen that the early filings have quality issues that need to be addressed to ensure the usability of the XBRL data.

"While most companies would like to correctly assess their water usage, they often do not have any proper system to track this," said Nagaraj Krishnan, managing director, Aparajitha Corporate Services, a tech firm providing compliance solutions to over 2000 companies in India. "Besides, there are no legal implications right now for falsification of the data being disclosed".

Incidentally, 125 (or 12%) of the 1,062 companies have conducted independent assessment of their water consumption and withdrawal.

"There is around 30-40% increase in awareness among the companies about the measures to be taken for water efficiency and reduction in usage through eliminating wastage and plugging leakages", said Anu Chaudhary, Global Head of ESG Consulting, Uniqus Consultech.