Water Stewardship Position Statement

Current Situation

Water is an increasingly stressed resource, and securing availability is recognized as one of the key challenges of the 21st century. A third of the global population lives in water-stressed countries,¹ and that proportion will rise as populations grow, boosting demand for water in agriculture, industry and communities. Climate change is also reducing water availability in some regions. Food production requires adequate water supplies for growing crops, with agriculture accounting for 70% of global freshwater withdrawals.² Our business also depends on the strength of the communities where we manufacture our products, for whom sustainable supplies of safe water are critical. 

Mars is committed to playing our part to address these challenges, aiming to be a responsible water steward by working to protect and improve water availability and eliminate unsustainable water use throughout our extended value chain. Over 99% of this water use is associated with crops or livestock for raw materials supplied to us, so we mapped total supply chain water use to assess whether it comes from natural rainfall or irrigation. Then, where our direct and indirect suppliers do rely on irrigation, we assessed whether the watersheds involved are experiencing stress. As a result, we are prioritizing our efforts on crops which we, or our suppliers, source at large volumes from stressed watersheds, such as parts of India, Pakistan, Spain and the United States. 

Mars has adopted the Alliance for Water Stewardship’s definition of water stewardship: “The use of water that is socially and culturally equitable, environmentally sustainable and economically beneficial, achieved through a stakeholder-inclusive process that involves site-and catchment-based actions. Good water stewards understand their own water use, catchment context and shared concerns in terms of water governance; water balance; water quality; important water-related areas; water, sanitation and hygiene, and then engage in meaningful individual and collective actions that benefit people, the economy and nature.” ³ 
  
Water stewardship is intrinsically linked to our other sustainability priorities. Climate change will impact water scarcity, while agricultural irrigation affects land use through its impact on crop yields. The availability of safe water and sanitation is a major issue facing humanity, and those with low incomes face increased water-related risks.

Our primary focus until the launch of the Mars Sustainable in a Generation (SiG) Plan in 2017 was on reducing the water withdrawn by our own operations. However, simply using less cannot solve the problem, nor can a focus on our operations alone. The impacts of water use vary depending on geography and the water source – water is more precious in the desert than in the rainforest, and treated tap water is more valuable than collected rainwater or reused process water. Our approach to managing our water impacts has now evolved to reflect this. We work to understand the impacts of our operations and raw material suppliers on both the availability and quality of water, at watershed level. We then set context-based water targets (CBWTs) to ensure we are targeting sufficiently ambitious reductions in our water impacts. CBWTs are based on science and informed by stakeholder consultation, to reflect the varying societal demands and issues affecting the different watersheds our business touches. Work to develop an accepted methodology to define science-based corporate water targets is ongoing, and Mars is contributing to this through collaboration with organizations including the Pacific Institute, WWF, UN CEO Water Mandate,⁴ and WRI.⁵

Our long-term ambition

The global water crisis is characterized by multiple intertwined challenges such as water scarcity, floods, droughts, declining water quality, impacts on human rights, and the loss of water-related ecosystems. The underlying supply and demand of water needs to be balanced to deal with all these challenges. The agricultural production systems on which Mars depends for its raw materials all rely on the availability of sufficient water. Helping to secure a sustainable supply of water for communities, farmers, business and nature is the principal focus of our water program and the rationale for our corporate water stewardship goal.

Mars’ water stewardship goal is to halve our gap to sustainable water usage levels⁶ by 2025 and ensure water use in each watershed in our value chain is within annually renewable levels⁷ in the long term. 

We regard this as a context-based target, because it is designed to ensure we play our part in solving water stress issues in the watersheds we operate in, or source from. Mars sees this as a vital step in ensuring our global supply chains are water resilient. In support of this overall target, we will work towards location-specific improvement targets for raw materials such as rice and mint that involve high water usage and are sourced from water-stressed areas. These targets will consider factors such as irrigation water efficiency and the deployment of sustainable agriculture best practices. Similarly, we have set improvement targets for our factories in water-stressed areas and are working to better understand water stewardship opportunities at plants facing the greatest water-related risks. We are doing this by undertaking reviews following steps 1 and 2 of the AWS International Std v2.0. These reviews are helping us to understand the water challenges at catchment level which are informing our site development plans.

Mars uses a three-step target-setting approach similar to that being piloted by the CEO Water Mandate in its Contextual Site Water Target workstream:⁴  

1. We assess the location and volume of water withdrawn for our sites and sourcing activities, and the water-stress levels in these locations. Generally, we do not have detailed hydrological data for these locations, and so our default approach is to use water-stress data from WRI’s Aqueduct platform to inform this work. We concentrate on water availability and demand  challenges unless we are aware that other relevant risks such as water quality or flooding are material to our activities in the location.  
2. We determine the sustainable level of water use for each catchment, and how much current usage needs to reduce to reach this level. We estimate this using WRI Aqueduct data unless better local data is available, or there is an established and accepted “desired state” for the watershed.
3. Our target is to eliminate unsustainable usage in the long term. In the absence of agreed reductions by sector, we assume that Mars will make the same proportional contribution as all other water users to reduce unsustainable water withdrawals. We then define strategies to deliver the required reductions, and track progress.  

The final “Methodology and Glossary” section below explains how we assess our gap to sustainable usage levels. Over time, we will cascade our water targets to our suppliers and have begun by encouraging them to understand their water impacts, and to demonstrate transparency such as by reporting through the CDP⁸ water disclosure. We monitor the water-related actions of our main suppliers and track their improvement over time.  

To achieve our water target, Mars is committed to:

• Advocating for water stewardship, and leading in selected crops and locations.
• Considering water impacts in business planning and decision-making.
• Engaging stakeholders, especially Mars Associates, suppliers, and other organizations interested in water stewardship in locations we operate in, or source materials from, especially those that are water stressed.
• Striving to use water efficiently; minimizing water loss; preventing pollution and promoting water recycling and responsible wastewater disposal; and recognizing that safe access to water and sanitation is a human right.
• Setting context-based water targets that recognize individual watersheds as system boundaries, and regularly communicating progress against these targets.
• Complying with all applicable legal and regulatory requirements. 

Our theory of change

Mars is not generally the main water user in the watersheds we operate in or source from, and so must work with a wider community of organizations to solve complex water issues. Transparency and collaboration are essential for us to collectively play our part, as no single company can make meaningful progress alone. Recognizing the need for multi-stakeholder engagement, Mars:

• Joined the UN Global Compact and UN CEO Water Mandate in 2015. As part of these commitments, Mars supports the UN Sustainable Development Goals (SDGs), particularly SDG 6 “Ensure Access to Water and Sanitation for all.”
• Participates in the UN CEO Water Mandate’s water stewardship collaboration forums and is a member of the Alliance for Water Stewardship (AWS). The AWS works with companies, governments and NGOs to develop and support the use of the AWS International Stewardship Standard as a global, consistent set of water stewardship principles and a model for good practice.
• Joins with other businesses, non-governmental organizations such as Helvetas and government agencies such as GIZ or SDC to progress specific intervention projects to implement more sustainable practices that serve to reduce water use, improve water governance, or improve water quality.  
• Is working with partners including WRI, WWF and the Pacific Institute to help develop and apply standards and methodologies that advance science-based approaches to water stewardship.

Mars’ water action strategy 

Collaboration is needed to solve water problems at watershed level and Mars seeks to ensure that our targeting approach and action program can be an example for others. We take an “understand, eliminate, reduce, reuse, treat and recycle” approach, as shown in the table.

Agricultural water initiatives - is water saved?

Reducing water impacts in agriculture may be achieved in a variety of ways and the terminology “water saving” is often imprecise or inaccurate. If Mars promotes a technology or technique that increases yield (more crop per drop), this may enable us to source a raw material using less water and land per unit produced, helping us to reduce unsustainable water usage in our value chain. However, at farm level, no water may be saved in absolute terms, indeed increased yield may require increased absolute water use to satisfy the increased evapotranspiration needs of greater crop growth. In another case, a farmer’s investment in more efficient irrigation may reduce the amount of water required to grow the crop Mars purchases, but if the farmer uses the “saved” water to irrigate more land or grow more crops requiring intensive irrigation, or sells his saved allocation to his neighbor, overall water use may not decrease. In this case, no water has been “saved” and there has been no contribution to reduced water stress in the watershed. Mars will use the terminology “reduced water use” rather than “water saving” in describing situations where agricultural water efficiency improves, unless an activity leads to a clear reduction in unsustainable water use at farm and catchment level. These examples demonstrate the importance of close collaboration with farmers and other stakeholders and the need for effective watershed governance and water allocation, to tackle shared water challenges like water stress.

Temporal challenges 

We know that in most locations water availability varies considerably through the year and between years, and that water stress may only be a problem at certain times of year. We are still considering the best way to address this in our accounting and reporting on water use, realizing that annualized expressions of total water consumption may not reflect the temporal complexities of water stress and unsustainable water use within our value chain. 

The role of projects beyond our value chain (offsetting) 

If the progress made using the above strategies is insufficient, we will consider “out-of-value-chain” activities such as landscape restoration to recharge water levels to the extent necessary to meet our targets. In support of this, Mars has collaborated with peer companies, WRI, Quantis, Valuing Nature and LimnoTech, to develop an approach to quantifying the benefits of water stewardship activities, which was published in 2019. We anticipate that this work will be the foundation of our approach to quantifying the benefits of water stewardship projects, including any landscape-based projects outside our value chain used to offset our value-chain water use, in a way that is consistent with Context Based Water Targets (CBWT). Our initial thinking is that out-of-value-chain activities will take place in the same watershed as the Mars operations or supply chains requiring additional water savings to meet their water-balance targets. Any water-balance benefits Mars claims from water recharge activities will be independently verified as genuine and additional. Mars will ensure its own operations and sourcing activities in a location demonstrate water stewardship leadership prior to supporting an external water project in that location. This could be done by applying the AWS international water stewardship standard, or other water-focused sustainable agriculture standards such as the Sustainable Rice Platform. 

Short-term actions  

Mars has established shorter-term targets to encourage progress towards our ambition:

The graphic below illustrates our short-term target to “halve the gap to sustainable water usage levels”. While the majority of agricultural raw materials in our value chain are rain fed, a small proportion of materials like rice, mint, and almonds require irrigation from surface and/or ground water sources. Over 70% of the water used for agricultural irrigation in our value chain is in locations that are not water stressed. However, the remainder is withdrawn from areas where water stress is high. Our target is to reduce our usage in these locations by the same proportion that all water users in the watershed must achieve in order to achieve sustainable water use. The “Methodology and Glossary” section below explains this approach. We believe that long-term sourcing of irrigated raw materials from water-stressed areas is more likely to be viable if we eliminate the gap to sustainable water usage levels from our operations and extended value chain.

We report our water performance annually in our “Sustainable in a Generation Plan Scorecard” and CDP Water disclosure. The sustainability pages of mars.com communicate our water position and initiatives. Together, these actions meet our transparency commitment as a member of the UN CEO Water Mandate. Progress against our global water targets is regularly reported to the Mars Board, Leadership Team and the Operational and Commercial Leadership Teams responsible for delivering the targeted improvements. 

Mars has committed to purchasing a number of our most important raw materials, including rice, from sources that have been certified (e.g. Rainforest Alliance, Fairtrade) or validated (Sustainable Rice Platform) as more sustainable. We recognize that the focus on water varies between certifications and standards. However, some standards, including the Sustainable Rice Platform, can provide a practical means of reducing water usage in our value chain and in communicating water-efficiency best practice.

Wind energy has an extremely low water footprint compared with conventional electricity sources such as fossil fuels, biomass or nuclear fission. We have an ambitious, global, renewable electricity program in service of our climate commitments, with national-scale wind and solar projects already providing renewable electricity for our sites in the U.S.A, U.K, Mexico and Australia. While this is a potential strategy for reducing water use, the complexity involved in combining CBWT with an extended electricity supply and distribution network presents significant methodological challenges. Mars is supportive of recent work by WSP and WRI to develop an accounting methodology to calculate upstream water withdrawals and consumption associated with purchased electricity. 

We are continually improving the quality of our water impact data. In 2019, we began using watershed stress data from V3 of WRI’s Aqueduct tool, in concert with crop-specific agricultural land-use data from Mapspam (2010) and Earthstat (2000). This method of establishing water stress risk that is specific to a particular crop within defined sourcing locations of differing size, draws on work done by WRI in “Aqueduct Food." The approach which allows more robust water impact assessment by crop and location through the use of a geographic information system is described in the “Methodology and Glossary” Section. 

What’s next? 

Targets 

We will continue to contribute to the corporate water targeting methodology development and are monitoring the progress of Science-Based Targets for Water (via the Science-Based Targets Network – a consortium of groups and scientists working to build new, more rigorous approaches). We are also building our experience and understanding of deploying CBWT both at our sites and for water-intensive crops in our supply chain like rice and mint. 

Mars is developing a new initiative for suppliers that provide Mars with our ten highest-impact raw materials. This is intended to ensure that the environmental and social impacts that are relevant to specific key crops like rice, mint and cocoa are responsibly managed. The initiative will involve working with suppliers who source from high-risk locations to deploy intervention projects to reduce risk and impacts. The program will also provide a leading indicator to help ensure that the improvement work necessary to deliver our long-term, lagging, quantitative value-chain targets is on track. Designing suitable intervention projects for suppliers in water-stressed areas who provide Mars with crops like rice and mint will therefore be a focus area.

We have established accounting principles and associated calculation methodologies in support of our targets, which are covered in the “Methodology and Glossary section” below. We are now deploying these to:

• Quantify the benefits of water-focused sustainable agriculture programs and how changes in site water withdrawals impact our water target.
• Better understand how water stress is impacting specific raw materials and locations in our agricultural supply chains, using global agricultural and water stress datasets coupled with the computational power of a geographic information system. This approach is helping us to calculate our impacts more precisely, and pinpoint priority locations.

Sites 

As our high water risk operational sites complete water-stewardship reviews, we are identifying more opportunities to address water impacts in our utility and production processes, and their watersheds. Our main business segments are deploying sustainability improvement playbooks to help sites implement the most effective activities for reducing energy and water use. As our current water targets for our Operations expire in 2020, we will take the opportunity to better align our SiG for Operations water targets with our water stewardship goal, and increase our focus on a small number of sites that face the largest water challenges.

While Mars attempts to ensure that new sites are located in areas which are not water stressed, sometimes this is not possible and, in consultation with local authorities, Mars may choose to site a new facility in a water-stressed location. In these circumstances, we will seek to ensure the new site embraces best-practice technology to minimize water use, and design the site to be LEED-certified to at least Silver level. We will also work to establish a robust, long-term, context-based target for water usage at these facilities.  

Many locations would benefit from improved water governance. Mars sites are supporting a WRI pilot project in the USA and Mexico, which aims to increase transparency in public water management by harmonizing and sharing corporate water-risk information. 

Sourcing – Tier 1 suppliers

The Next Generation Supplier program we launched in 2019 focuses on tier 1 suppliers in prioritized purchasing categories, including our highest-impact raw materials, co-manufacturing, and logistics. As of April 2020, we had assessed the performance of over 200 suppliers, and aim to dramatically increase the number of assessed sites in the next 3-5 years. This will give us a much better picture of our key suppliers’ sustainability performance and direction of travel in a number of social and environmental areas, including water efficiency and transparency. Additionally, we will work with suppliers to help improve their performance.

Sourcing - agriculture

Mars Food & Nutrition is partnering with the International Rice Research Institute, NGOs such as Helvetas, WWF and UNEP, and industry partners to implement sustainable rice cultivation with basmati rice farmers. We are working with almost 2,000 farmers in India and Pakistan, helping them learn new techniques to improve water efficiency, reduce and safely manage their use of fertilizers and pesticides, and improve farm worker health and safety. This demonstrates the type of multi-stakeholder approach required to address water scarcity and other sustainability challenges within our value chain. 

Mars Snacking is working on water impacts associated with two key ingredients, mint and almonds. For mint, work is advancing to build our understanding of supply chain water use and associated water risks in India. Mars announced a global partnership with the KIND brand in 2017. Almonds are a signature ingredient in the KIND portfolio, and we know that almonds are both heavily irrigated and sourced from water-stressed locations, mainly in California. As a result, we are beginning to explore with our suppliers how almonds may be cultivated more sustainably. 

Mars Petcare’s water impacts are driven by broken rice and rice flour, and the segment is working to better understand water-related opportunities associated with these raw materials. 

Water offsetting projects outside our value chain  

We will explore the implications for Mars of the Water Stewardship Volumetric Benefit Accounting (VWBA) Methodology published in August 2019, to ensure we properly account for the potential interventions we make, both inside and outside our value chain. We will also develop our thinking on water offsetting, to provide alternate, scientifically valid ways to address water-stress issues in areas where we cannot close the gap to sustainable water use levels by reducing our own water use. 

Mars is an investor in the Livelihoods Fund for Family Farming and is working with the fund to develop a pilot project in a priority watershed that would benefit smallholder farmers and generate water balance benefits.

Methodology and glossary 

¹ WHO: Ten Facts about Water, March 2009

² The Copenhagen Diagnosis, 2009: Updating the World on the Latest Climate Science. Allison et al. The University of New South Wales Climate Change Research Centre, Sydney, Australia 2009, pp15-16

³ AWS International Water Stewardship Standard. V2.0 2019 p4

⁴ UN Global Compact CEO Water Mandate, Pacific Institute, CDP, The Nature Conservancy, World Resources Institute, WWF, UNEPDHI Partnership Centre for Water and Environment. 2019. Setting Site Water Targets Informed by Catchment Context: A Guide for Companies. www.ceowatermandate.org/site-water-targets.

⁵ WRI/MARS paper: From Doing Better to Doing Enough: Anchoring Corporate Sustainability Targets in Science.

⁶ See Methodology and Glossary Section

⁷ See Methodology and Glossary Section

⁸ CDP is a charity which operates a global environmental impact disclosure system for investors, companies and civil society that is becoming the de facto reporting standard for climate, water and deforestation impacts.