Key takeaway
The Water module asks how your business uses, withdraws, discharges, and impacts water. Unlike climate, water is a fundamentally local issue: a company can have low overall water use globally but face severe risk at one water-stressed plant. CDP's water module reflects this by asking for basin-level disclosure where it matters. This lesson explains the structure of water disclosure, the difference between volume and stress, and the foundational data points every company needs.
What CDP Water covers
The Water Security module typically covers:
- Withdrawals. Total volume of water taken from sources (groundwater, surface water, third-party supply, seawater, produced water).
- Discharge. Volume returned to the environment, with quality information.
- Consumption. Net consumption (withdrawal minus discharge).
- Sources and stress. Where water is sourced, with water stress assessment.
- Risks and opportunities. Water-related business risks and opportunities.
- Targets and engagement. Water reduction targets and supplier or community engagement.
- Governance. Board oversight of water issues.
The module structure mirrors the climate module in many ways. Many of the questions are analogous (withdrawals are like Scope 1, water-stressed sourcing is like emission factors).
Why water is different from climate
Three key differences shape the disclosure approach:
| Dimension | Climate | Water |
|---|---|---|
| Scale | Global; one tonne of CO2 has the same impact regardless of where it is emitted | Local; the same litre of water has very different value in a desert versus a wetland |
| Reversibility | Cumulative and slow to reverse | Annually renewing through hydrologic cycle, but stress is increasingly chronic |
| Measurement | Calculated from activity data and emission factors | Often directly measured at meter level |
| Risk asymmetry | All emissions are equally bad | Withdrawals in stressed basins are much worse than withdrawals in water-rich regions |
The locality of water means the question framework rewards disclosure that recognises where water is being used, not just how much.
Analogy
Climate is like national debt: the total matters, regardless of which province ran the deficit. Water is like local groundwater: a 100 million litre withdrawal in a water-rich monsoon region is fine; the same withdrawal in a chronically drought-stressed basin is a crisis. The same number, very different meaning. CDP's water disclosure framework forces you to disclose both the number and the location.
The base measurements you need
Every company disclosing water should have, at minimum:
- Total withdrawals by source (in megalitres, ML, or cubic metres, m3)
- Total discharge by destination
- Total consumption (withdrawals minus discharge)
- Water stress overlay (how much of withdrawal happens in water-stressed regions)
Most water-using companies measure these at facility level. The aggregation up to corporate level is the disclosure.
For Indian companies, water data quality varies. Manufacturing facilities often have direct meters. Agricultural operations have less metering and more estimation. The grader accepts estimation but expects methodology disclosure.
Water stress assessment
CDP recognises several water stress assessment tools:
- WRI Aqueduct. The most-used tool. Provides water stress scores by basin globally on a 0-5 scale. Companies disclose how many of their facilities are in basins with stress scores above 3 or 4.
- WWF Water Risk Filter. Similar tool, with somewhat different methodology. Some companies use both.
- CEO Water Mandate / WBCSD Water Tools. Industry-specific assessments.
- National-level tools. India has the Composite Water Management Index (CWMI) from NITI Aayog; some companies use it for India-specific stress assessment.
A scoring-quality water stress disclosure:
- Number of facilities operated in high-stress basins (Aqueduct score >3)
- Volume of water withdrawn in those basins (as percentage of total)
- Trends over time (if known)
- Risk treatment for high-stress facilities
Where the dominant exposure usually sits
For most water-intensive industries, the picture varies:
| Sector | Where water risk concentrates |
|---|---|
| Agriculture / Food | Crop irrigation; supplier-owned farms in stressed regions |
| FMCG / Beverages | Bottling plants in stressed regions; ingredient sourcing |
| Apparel | Cotton irrigation; dyeing and finishing operations |
| Steel / Cement | Process cooling at major plants; intensive at flagship sites |
| Mining | Ore processing, dust suppression; concentrated at remote sites |
| Pharma / Chemicals | Manufacturing process water; specific to formulation |
| Power generation | Cooling water; can be massive volumes |
A company answering the water module should know which 3-5 facilities (or which supplier categories) account for 80 percent of its water risk and disclose those in detail.
Worked example: a beverage manufacturer
Worked example
ColaBev India Ltd (synthetic, beverages).
Withdrawals (Q on operations water use):
- Total withdrawals FY25: 24.5 million m3
- Source breakdown:
- Groundwater: 12.0 million m3 (49 percent)
- Surface water (rivers, lakes): 5.5 million m3 (22 percent)
- Third-party (municipal supply): 6.5 million m3 (27 percent)
- Rainwater harvesting: 0.5 million m3 (2 percent)
Water stress overlay:
- Aqueduct stress assessment of 12 manufacturing plants:
- 4 plants in Aqueduct score >4 (high stress): Hyderabad, Chennai, Pune, Jaipur
- 5 plants in Aqueduct score 3-4 (medium stress): Bengaluru, Delhi-NCR, Ahmedabad, Mumbai-Thane, Kanpur
- 3 plants in Aqueduct score <3 (low stress): Goa, Kolkata, Bhubaneswar
- Volume of withdrawals in Aqueduct >3 areas: 19.5 million m3 (80 percent of total)
- Trend: Aqueduct stress scores have moved from medium to high in 2 plants over 3 years
Discharge:
- Total discharge FY25: 18.5 million m3
- Treatment: 100 percent through on-site ETPs to local discharge standards or higher
- Net consumption: 6.0 million m3
Risk treatment:
- 4 high-stress plants undergoing water efficiency upgrades; cumulative target: 25 percent withdrawal reduction by 2028 from 2022 baseline
- Source diversification: 2 high-stress plants now sourcing 30 percent through rainwater harvesting and recycled water; remaining 70 percent from groundwater
- Community engagement: 12 watershed restoration projects in source basins, partnership with WWF India
Targets (in subsequent question):
- Group-level: 30 percent withdrawal reduction in high-stress operations by 2030 (from 2022 baseline)
- Net water positive in 6 of 12 plants by 2030
- Verified by an external water auditor (third-party) annually
This level of disclosure earns Management to Leadership tier on the water foundations. The components: source breakdown, stress overlay, trend data, risk treatment, named targets, third-party verification, community engagement.
Connecting water to climate and forests
Water is rarely a stand-alone theme. Most water-intensive operations also have climate and biodiversity exposure.
The integrated answer pattern:
- Water + Climate. Process cooling water consumption relates to energy use; water-efficient processes also save energy. Renewable energy integration with water-efficient cooling is a frequent integrated investment.
- Water + Forests. Watershed integrity affects forests, and forests affect watershed health. Companies in agriculture and consumer goods often address forests and water through the same supplier programmes.
- Water + Biodiversity. Aquatic ecosystems and groundwater dependent ecosystems are biodiversity assets. Discharge quality affects local biodiversity.
The Leadership-tier responder shows these integrations. A water disclosure that addresses only volumes without connecting to climate strategy or forests sourcing caps at Management.
The Water module includes board governance questions analogous to the climate ones. A common gap: companies have well-developed climate governance (board sustainability committee, climate risk on agenda) but water is treated as an operational issue, not a board issue. The fix is straightforward: add water explicitly to the board sustainability committee's mandate and include water risk reviews on the agenda. Companies that integrate water into board-level governance score one full tier higher on the governance questions, often without changing operations.
Key Takeaways
- Water is fundamentally local; CDP rewards basin-level and stress-overlay disclosure that recognises where water is used, not just how much
- Every water-disclosing company needs withdrawals by source, discharge with quality, consumption, and a water stress overlay (most commonly using WRI Aqueduct)
- Companies with diverse operations should know which 3-5 facilities or supplier categories account for 80 percent of water risk and disclose those in detail
- The base structure (withdrawals, discharge, consumption, stress, risks, targets, governance) parallels climate but with locality emphasis
- Integrate water with climate and forests; companies that connect themes through shared programmes score higher than companies that treat them in silos
Knowledge Check
Test what you just learned
6 questions · check each one as you go
What is the most fundamental difference between water and climate disclosure?
Which tool is most-commonly used for water stress assessment?
True or false: A company can have low total water use globally but face severe risk at one stressed plant.
Which base measurements does every water-disclosing company need?
Select all that apply
What is the typical cost of multi-year verification for a Leadership-tier programme?
Match each sector to where its water risk concentrates.
Match each item to its pair
Agriculture / Food
FMCG / Beverages
Apparel
Steel / Cement
Mining