Bottled Water Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Bottled Water Industry

The bottled water industry has a significant impact on the environment and health which is a serious risk. A variety of alternative options have been implemented to address this issue. Further to our research on this theme, we will look at the key pointers for the bottled business.

As compared to normal tap water, bottled water’s impact is 3,500 times higher. It has been observed that there is an increase in bottled water consumption each year which can be estimated to be much greater than the beverage industry. As the business grows, the risks associated with it are also increasing, highlighting the risk that is linked to health and the environment. Our analysis indicates that consumers believe drinking bottled water is safe and beneficial to their health, but excessive consumption of mineral-rich water can negatively affect human health. A concern from a production standpoint is the inclusion of plastic in bottled water whose components may be carcinogens and hormone disruptors. Plastic bottles should not be reused since they can only be used once. This increases the rate of contamination. Moreover, as the plastics are made from petroleum which is not a clean source of energy this contributes to impacting the environment in a negative manner. As the plastics industry releases toxins into the air and water, its impact on the environment and human health can be significant. Millions of tons of plastic bottles that slowly decompose are filling up our landfills rapidly because they release toxic chemicals that can pollute groundwater over hundreds of years as they break down.

Growing ESG Interest Towards Bottled Water

In recent years, bottled water has gained increased popularity due to its perceived safety, compared to drinking local or tap water. These come with considerable environmental and social risks. However, many people are unaware that most of the bottled water consumed comes from local sources. Globally, many countries have improved the quality of drinking water distribution systems. The consumption of bottled water worldwide grows by 7% per year, which is a source of controversy. In addition to the health implications of water standards and the energy demand associated with its manufacturing and distribution, there is also controversy over the quality of water. From an environmental health perspective, the disposal of waste produced by discarded bottles is a significant concern. The common element in bottled water is plastic which is not biodegradable and can have adverse effects on the environment. Landfills and dumpsites that fail to meet sanitary standards result in the contamination of key environmental resources. All these are negative factors that hinder developments to achieving the United Nations’ Sustainable Development Goal (UN SDG) – 12: Responsible Consumption and Production. In terms of social risks, these directly impact UN SDG 3: Good Health and Wellbeing for all.

In addition to occupying huge amounts of space when bottles are discarded in landfills, energy consumption is another major concern in the manufacturing and distribution of bottled water since bottled water manufacturers are primarily reliant on fossil fuels for production and distribution. Among the other sources of energy consumption in bottled water manufacturing are packaging, labeling, and cooling at sales sites. Transport over long distances requires more energy than transportation over short distances, with plastic bottles constituting more than 70% of the total energy consumed. Thus, the industry also has a large impact on SDG 7: Affordable and Clean Energy.

Innovations in The Industry

As an alternative to plastic bottles, the bottled water industry has seen many innovations, including the introduction of an environmentally friendly paper bottle. These materials are produced using fast-growing natural fibers, recycled paper, corrugated pulp, and fast-growing natural fibers such as bamboo, bagasse, and reeds. Another innovation has been the hybrid paper bottle with a molded-fiber exterior. The entire process of manufacturing this molded fiber is sustainable. Additionally, the molded fiber paper bottle tends to hold water or other liquids. Compared to traditional plastic bottles, this type of container can reduce plastic consumption by up to 70%.

Alternatives to Bottled Water

A wide variety of alternatives to bottled water have been discovered, including aluminum bottled water. The bottle is recyclable and reusable, so it is a wise choice. Glass bottles are another option since they can be recycled and are safe health wise. Paper bottles are also a new trend in eco-friendly water packaging, which can be recycled and is environmentally friendly as well as safe for the environment. Also, biodegradable disposable water bottles are also plant-based and toxins-free, making them the preferred plastic-free alternative.

ESG Challenges

As far as the challenges are concerned, consumers buy billions of bottles of bottled water every year, influenced by advertisements portraying it as the safest and healthiest. When digging deeper it has been observed that plastic bottle manufacturing on an annual basis required 17.6 million barrels of oil which is a form of non-renewable resource also globally the amount of plastic used for bottled water is about 2.7 million tons each year. Moreover, the transportation of bottled water also contributes to global warming by emitting emissions. The most effective option seems to be tap water. There are many advantages to drinking this type of water, such as its convenience, affordability, and low environmental impact.

Growth of the Bottled Water Market

It is expected that the global bottled water market will grow at a compound annual growth rate (CAGR) of 6.7% from 2022 to 2030, reaching USD 283.01 billion in 2021. As consumers become increasingly concerned about various health problems caused by contaminated water, packaged food products are becoming increasingly popular. Furthermore, the research also highlights key pointers about the bottled water Market.

Key Companies in this theme

    • Nestlé, PepsiCo

    • The Coca-Cola Company

    • DANONE

    • Nongfu Spring

    • National Beverage Corp.

    • Keurig Dr Pepper Inc.

Scope of the Bottled Water Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process.

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Benefits of the Bottled Water Industry ESG Thematic Report

    • Developing a comprehensive understanding of macro-economic, Policies & Regulations and innovations affecting the Sector, globally

    • Key insights into Infrastructure developments and ESG issues affecting the theme

    • Identifying ESG risks and opportunities to business among leading players in the industry

    • Obtaining a clear and relevant understanding of company actions, progress, and impact and find opportunities for investment