Water pollution is a business risk. Here’s how companies can address it

The opinions expressed by Trellis expert contributors are their own, not those of Trellis.

Poor water quality can pose as great a business risk as water scarcity. Yet managing it remains a low priority for many companies. 

Ceres’ research on water stewardship reveals a troubling gap: Quality is an area where companies are falling furthest behind — with goals often disconnected from local water conditions and strategies that fail to follow water risk beyond their operations and into supply chains. 

But some companies demonstrate what’s possible with approaches that leverage tools, frameworks and other resources to pinpoint and target action where it is most critical.

Tangible business risks

Growing product demand can come at a cost to water supplies, and increasingly that cost is measured in water quality. Industrial operations can release contaminants and chemicals, including per- and polyfluoroalkyl substances or “forever” chemicals, into nearby water supplies. Other sources of pollution, such as farming, can overload nearby waterways with sediment and nutrients causing algae blooms and placing community water supplies at risk, among other problems. 

Financial exposure is tangible, including fines, cleanup costs, orders to cease production and reputational damage. Industries that depend on water of a specific quality, such as food and beverage and semiconductor manufacturing face operational risk when water is not clean enough to make their products. 

At the same time, disclosure requirements and guidance are tightening around water pollution. Under the European Union’s Corporate Sustainability Reporting Directive, large companies face requirements to measure and report their water quality impacts. Meanwhile, frameworks such as the Taskforce on Nature-related Finance Disclosures that help companies and investors identify and report on nature-related risks, have included water quality metrics into their guidance. And CDP, the environmental disclosure platform, continues to push for greater transparency on wastewater management. 

Corporate action builds slowly

More companies are paying attention. Ceres’ most recent benchmark report released in 2025, shows how 71 global companies are working to better manage water.The report, published every two years, found 41 percent of the companies evaluated had set water quality targets, up from 23 percent in 2023. More companies are also disclosing how they plan to reach their goals and the progress they are making.

Still, compared to companies’ efforts to reduce how much water they consume or withdraw — the benchmark showed 83 percent have water-use targets — most have a long way to go addressing water pollution.

And many of the efforts underway have limits: Without comprehensive risk assessments tied to local water conditions and targets focused on where water quality challenges are most acute, only a handful of companies evaluated in the benchmark are positioned to drive real impact and mitigate risk.

Level up efforts

To close this gap, companies must better understand the specific watersheds where they operate or source water by mapping local quality challenges and regulatory requirements and using local knowledge, surveys and scenario analysis to understand existing and future community and environmental water needs. Companies also must assess and manage the pollutants they discharge into waterways before they cause harm, going beyond regulatory requirements, which may be insufficient or nonexistent.

The same place-based approach that many companies apply to water availability must extend to water quality, so that companies can act where it matters most for their business.

Cargill is one business pushing water quality work forward. The agribusiness and food trader has pledged to reduce 5,000 metric tons of pollutants in water-stressed regions by 2030, advancing that goal through better agricultural practices that reduce nutrient run off and projects to restore lands and watersheds surrounding farmlands. 

So far, it has reduced 1,580 metric tons of water pollution in water-stressed areas of its supply chain, tracking and reporting progress using established methodologies such as the Volumetric Water Benefit Accounting 2.0 to ensure consistency and credibility.

Apparel company Kering is working to lessen its impact on water quality by reducing its use of heavy metals, hazardous chemicals and microplastics from industrial processes and its raw material supply chain. 

For instance, its tanneries are investing in metal-free and chrome-free tanning processes to reduce freshwater pollution. Kering has also pinpointed 10 priority basins where it will focus on restoring water-stressed ecosystems, improving water quality and supply, and building resilience to climate extremes. 

Don’t overlook supply chains

Although disclosure of water quality risks overall has improved among companies assessed in Ceres’ 2025 water benchmark, supply chains — where the majority of water risks often lie — remain a blind spot. Without this data, it’s difficult for companies to pinpoint where risk is highest, justify action or focus targets and resources where they’ll have the greatest benefit to their business. 

Using the Science Based Target Network (SBTN) framework, Levi Strauss & Co. assessed its water and nature footprint across its supply chain, from raw materials to manufacturing. It found that an estimated 38 percent of freshwater pollution impacts (measured as kilogram of phosphorus-equivalent) happen during garment manufacturing (tier 1 of its supply chain), mainly from laundry processes.

Levi Strauss has committed to ensure that all of its direct-discharge facilities will meet the  “Foundational” level of the ZDHC Wastewater Guidelines, and 25 percent will reach the stricter “Progressive” level by 2030. The guidelines are published by the Zero Discharge of Hazardous Chemicals Foundation, an apparel and footwear industry group, and sets three tiers of wastewater limits: Foundational, Progressive, and Aspirational.

In its 2027 water benchmark, Ceres will assess how companies advance their strategies, and how others adopt industry best practices and raise their ambition on water quality.

Advancing progress

Beyond the benchmark findings, a growing number of companies are using tools to measure their water quality impacts, set meaningful targets, and track progress beyond compliance. 

Levi Strauss is one of several companies leveraging the SBTN framework to assess impact and dependencies, and to explore setting measurable goals to reduce harm to nature, including freshwater ecosystems. The framework offers helpful guidance for companies seeking to reduce their water quality impacts and increase positive outcomes for nature. 

Some organizations also use the World Resources Institute’s Water Quality Benefit Accounting Guidance to understand how efforts such as water replenishment and regenerative agriculture address shared water challenges and the indicators and methods to quantify and track benefits like improved soil health and local water conditions.

This momentum must accelerate. Companies that anchor targets in local water conditions, extend strategy into their supply chains, and improve transparency will be better equipped to meet rising expectations from investors, regulators and communities — and to strengthen resilience of both their business and the water resources they rely on.