FAQs

According to CDP, approximately 2.3 billion people currently live in water stressed areas, and since 1970 the earth has experienced an 84% decline in freshwater biodiversity. A recent report published by the World Resources Institute’s Aqueduct Water Risk Atlas projects an additional 1 billion people are expected to be affected by “extremely high water stress” 2050.

The global water crisis is a systematic financial risk to nearly all economies and the climate crisis multiplies these threats. Water security is paramount to a functioning global economy, health and sanitation, and preventing ecosystem collapse. Healthy rivers, lakes, wetlands, natural watersheds, aquifers and groundwater basins are essential for meeting climate resilience goals and to ensure long-term sustainability for nature and humanity. Water scarcity is becoming an increasing threat in developing and developed nations. In its sixth assessment report, the IPCC issued a stark warning that urgent action is needed to increase resilience and reduce vulnerability of water resources, related ecosystems, communities and the economy to the effects of climate change.

Sustainability strategies and moving to net-zero has been mostly centered around greenhouse gas emission goals by entities removing as much greenhouse gas as they release (carbon neutrality), and increasingly, efforts to remove more greenhouse gases than they emit (climate positive). The reality baked into our warming world is perilous pressure on the earth’s resources, particularly fresh water. Science Based Targets Network (SBTN) succinctly states: “Since water resources are interconnected to all of nature, water targets will need to be set in coordination with other areas like land, climate and biodiversity.” The UN predicts there will be a 40% shortfall in freshwater resources by 2030. Climate action is water action, and commitments to increase freshwater availability are essential to successful adaptation to a changing climate.

There are many initiatives and frameworks that are guiding entities with water sustainability plans. The United Nations Sustainable Development Goals (SDGs) are the core of its 2030 Agenda, “a plan of action for people, planet and prosperity.” SDG 6 is to “ensure availability and sustainable management of water and sanitation for all.” Science Based Targets Network prioritized freshwater for its first nature-based resource framework and recently released target-setting guidance for companies to measure and act on their freshwater use. Numerous NGOs are engaging in freshwater conservation, preservation, and restoration projects with funding provided through public and private philanthropic channels.  Effectively addressing water scarcity for people and the environment will require increased participation and action at scale by entities that use water and those that manage water resources.

Water stewardship refers to the responsible use, management, and conservation of water resources. A full stewardship framework includes a comprehensive understanding of an organization’s impacts and risks, development of site-based mitigation plans, and adopting an organizational water stewardship policy that includes an action plan, goals and timeline for implementation.

Verified Water is an additive piece to water stewardship frameworks and provides a tool for action. Investing in water credits is an accessible, immediate and scalable way to make verified quantities of water available for ecosystem and community resiliency.

We recommend checking out Alliance for Water Stewardship and The Water Council’s WAVE program to get familiar with water stewardship planning. Additionally, Volumetric Water Benefit Accounting (VWBA) was developed by World Resources Institute (WRI) and its partners at Quantis, LimnoTech and Valuing Nature to provide corporate water stewardship practitioners with a standardized approach and set of indicators to quantify and communicate volumetric water benefits (VWBs).

Water credits fit within these frameworks and provide verified volumetric water benefits needed to improve water availability in water stressed regions; they deliver a quantifiable way to track and communicate progress toward organizational goals and targets.

Shared outcomes are essential to collective action around water sustainability and water stewardship goals on a global scale. This is evident in the United Nations Sustainable Development Goal 6 targets, specifically targets 6.1, 6.4, 6.5, 6.6, 6.a, 6.b. Identifying shared outcomes is also a focus of other high-level water stewardship frameworks such as the Alliance for Water Stewardship.

Verified Water’s vision aligns with both Sustainable Development Goals and global water stewardship frameworks. The shared outcome is to balance the freshwater needs of nature and humanity by creating equitable freshwater supplies for communities and ecosystems around the world.

In the context of valuation of water credits, yes. All water credits are valued based on several factors, the most important being the water stress region. Verified Water uses the WRI Aqueduct Water Risk Atlas tool to determine the stress region in which credits are originated. Water credit funding partners have the option to choose what type of credit (and therefore the stress region of the origination project) they want to support. Each participant has different freshwater sustainability targets depending on its sector and business. These goals could be global but investment could prioritize water scarce regions to incentivize projects where they are most needed.

Minimization of risk, long-term viability, meeting stakeholder expectations (investor/customer/employee/community), and improved operational and financial positions are all critical sustainability drivers. Long term financial health for corporations, particularly those with high water use, depends on sustainable water resources in their value chains and communities they serve and stakeholders are increasingly demanding environmental disclosures. At this time, water security reporting is not required, however in March 2022 the SEC introduced its Proposed Amendment, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”, which addresses risk factors including decreased availability of freshwater.  The EU’s Corporate Sustainability Reporting Directive (CSRD) is leading the way on required corporate reporting, while many other voluntary disclosures are being adopted, including the Taskforce on Nature-related Financial Disclosures (TNFD), Science Based Targets Network (SBTN), and CDP Water Security reporting.

Drivers and sustainability approaches are also being recognized within many business sectors as an emerging need and opportunity. For instance, Ceres’ Valuing Water Finance Initiative is driving water action at the corporate level; and the Green Sports Alliance has developed the first-ever Playbook on Water for Sports & Entertainment. . Business networks and resource hubs focused on sustainability values have been gaining memberships and prominence as well, including American Sustainability Business Network, Sustainable Brands and Green Biz.

We also recommend exploring the tools and resources at The UN Global Compact CEO Water Mandate Water Action Hub and the Nature Based Solutions Benefit Explorer tool.  These resources, designed in part by the Pacific Institute and partners are full of guidance for corporate water stewardship journeys. 

Market forces are powerful and scalable. Water assets are typically controlled by individual entities, and providing financial incentive to these entities in exchange for reducing their water use on an ongoing basis is a key tool to promote sustainability actions. The Water Credit Standard requires annual verification that is in sync with the annual variability of water availability which allows for flexibility in origination and greater likelihood of participation.

Water credits provide means for corporations to take direct action and fulfill water sustainability goals through providing these valuable financial incentives to originators. In short, the marketplace lowers the barrier to entry for participation for those that control the water resources and for those with sustainability goals and targets. Importantly, the voluntary credit market allows organizations to precipitate their water sustainability ethos locally, regionally, or even globally as it fits within their value chain or water management strategy.

Water action typically involves replenishment and restoration projects that require years of development and complex multi-stakeholder involvement to restore or preserve limited stretches of a stream course or watershed. These restoration projects are important but tend to lack the immediacy and accessibility to scale water sustainability actions on a regional and multi-basin level. Verified Water is solving this problem by providing a mechanism to incentivize those with water asset control to take sustainability actions and give a point of entry for water action for organizations of all sizes, not just those with large budgets and sustainability teams.

In short, our mission is to mainstream the global freshwater credit market and make water sustainability actions more immediate, scalable and accessible for all.

Water Neutral, Inc., dba Verified Water, is a public-benefit corporation and has committed its mission into its articles of incorporation. Our commitment is driving water sustainability action through nature and community-based investment. A for-profit designation demands adapting to market conditions and aligning with the organizations that will drive change from within rather than relying on donors. Reinvestment of our profit will provide capacity to achieve widespread water action and increase resilience.

Water credit origination projects involve a range of water sustainability actions, which is defined as a program, project or action that results in a measurable amount of freshwater (compared to a baseline) left in its source or dedicated to instream flow. According to the Water Credit Standard, methodologies for water credit origination can fall into the following categories:

• Water conservation action—an action that results in measurable reduction of water diversion through actions such as improving the efficiency of irrigation systems, reusing and recycling water, and adopting low-water-use technologies and practices.
• Land-use action—repurposing or re-managing land with historical water use that results in no or less water applied to the land.
• Other innovative action—employing a new or innovative action that results in a measurable amount of new water, or water left in its source or dedicated to instream flow.

Co-benefits are the positive environmental, social and economic impacts that result from a specific water credit origination project beyond the additional freshwater that is generated. The specifics of the co-benefits are often uniquely tied to the characteristics of each project. However, there are common co-benefit categories including:

• Environmental: supporting additional ecosystem resiliency.
• Community: supporting water system sustainability to meet community needs.
• Economic: supporting individual, community, and regional economic security.
• Collective Action: supporting shared outcomes and global sustainability goals.