Coke, Pepsi, Starbucks and Other Companies Watch Their Water

Last Updated Mar 2, 2009 10:12 PM EST

Environmentalists have been talking about carbon footprints for years, but now there's a new concern: water. Climate change is leading to water scarcity in some areas, and the food industry is particularly affected.

PepsiCo, General Mills and Starbucks all had representatives at last week's Water Footprint Summit in Miami. And it wasn't out of the goodness of their hearts. The conference focused on business reasons that companies should start monitoring and reducing the amount of water they use.

According to the AP, "dozens of high-tech companies, farms and soda bottlers have lost millions because they didn't foresee the risks posed by droughts and floods tied to global warming." Coca-Cola took a financial hit in India when it lost its license to use local ground water after years of protest. And droughts in California hurt not only farmers, but also anyone with investments tied to local agriculture. Coca-Cola has even taken to disclosing its "water footprint" in financial reports, as have numerous other companies.

But tracking such footprints is not a simple matter. Do you count just the water used by the factories? Or do you count all the water that goes into growing the ingredients as well? Companies are still tweaking their methodologies. Furthermore, not all water is created equal, as the Wall Street Journal points out.

Oranges grown in Brazil might have a higher water footprint than oranges from Spain, but the Brazilian orange might be a better choice because of the country's rainy climate.
Unilever estimated that it saved $26 million over seven years by cutting out unnecessary water usage. Coca-Cola is working with the World Wildlife Fund to improve the company's water efficiency.

Meanwhile, drought has left California in critical condition, and the General Accounting Office projects water shortages in 36 states within the next five years. Expect more companies to start looking closely at their water usage in the future.

  • Katherine Glover