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.

Strategy	Agriculture	Tier 1 Suppliers including co-manufacturers	Mars Factory Operations
Understand	Support or commission research into specific water impacts e.g. impact of climate change on rice cultivation in Southern Spain, benchmarking of water use at tomato farms, investigation of water use in almond cultivation in central California. When appropriate Mars will share catchment study results with other stakeholders.	The Mars Supplier Code of Conduct articulates our expectations for suppliers including a number of requirements related to water. We assess the sustainability performance and social compliance audit results of prioritized suppliers using the EcoVadis online platform, leveraging this widely recognized supplier evaluation tool while unlocking increased visibility and insights. As part of the EcoVadis program suppliers are encouraged to understand their water-related risks and disclose their water impacts to CDP.	Identify water, sanitation and health (WASH) issues impacting people working at our sites. Undertake water stewardship reviews at production sites in water-stressed areas experiencing water issues to identify challenges and opportunities at the site and within its watershed. When appropriate Mars will share catchment study results with other stakeholders.
Eliminate	Where possible move sourcing of high water-use materials such as rice to regions of low water stress. Use alternative materials with lower water use, or that are sourced from regions of lower water stress.	Address WASH issues impacting people working at our supplier’s sites. Tackle any non-compliance with local regulations related to the use of water and disposal of wastewater.	Address WASH issues impacting people working at our sites. Replace wet cleaning activities with dry cleaning where possible and consistent with food safety standards.
Reduce	Implement more efficient irrigation techniques such as alternate wetting & drying (AWD) for rice, or drip irrigation in high water-stress regions. Promote use of robust water stewardship principles through established platforms such as Sustainable Rice Platform (SRP) and Good Agricultural Practices Compendium for Mint. As a leading SRP member, we support 2,000 basmati rice farmers in Pakistan and India to improve productivity and reduce water use. In Pakistan, we have already seen a 32% increase in farmer income and 30% reduction in water use, and we’re working to expand these practices to rice farmers outside our supply chain. In 2016, we sourced all our basmati rice from SRP farmers and promote the use of higher yielding and more water-efficient varieties through R&D and supplier engagement.	The Mars Supplier Code of Conduct and its accompanying guidance serves as the foundation of our Next Generation Supplier program, where we collaborate with prioritized suppliers to improve sustainability performance. The EcoVadis platform provides increased visibility and broader insights on suppliers’ workplace sustainability performance, enabling us and our suppliers to track improvements over time. Our longer-term Next Generation Supplier Advance collaboration model supports the suppliers of our top 10 raw materials, and other strategic suppliers, as they activate plans in their workplaces to address the root causes of targeted issues, using expert guidance and worker voices to drive real change. This approach is designed to help suppliers drive systemic change that is measurable and meaningful over time. The goal is to encourage suppliers to engage in a long-term change process, advancing and transforming their performance in targeted areas.	Guided by what we have learned from the most successful improvement initiatives implemented in Mars factories over a ten-year period, our Mars Wrigley and Petcare segments have developed Sustainable in a Generation Plan (SiG) playbooks. These detail the most impactful operational and capital efficiency activities that production facilities should follow to reduce their energy, water and waste. It is our intention to ensure these activities are included in the operational and equipment design scope of new facilities, to optimize their efficiency from the start of production operations. Examples of playbook activities related to water include optimization of cleaning cycles, and improved water treatment techniques to reduce steam boiler and cooling tower blowdown. Mars certifies new buildings (greater than 1000m2) using the LEED code at Silver level (Gold for offices). This helps ensure water-efficient systems are designed for our buildings. Our Bolton, Canada Mars Food factory extension (2018) achieved a 40% usage reduction vs a conventional design.
Reuse	Encourage use of sustainability standards such as the SRP that promote rainwater harvesting for irrigation.	Use rainwater capture or grey water systems in suppliers’ manufacturing plants for toilet flushing, cooling towers and irrigation systems.	Recycle water from sterilization retorts. Use rainwater capture or grey water systems for toilet flushing, cooling towers and irrigation.
Treat and Recycle	Encourage use of sustainability standards such as SRP that address sector related challenges relating to run off and pollution control.	Encourage supplier sites to treat and reuse wastewater as grey water.	Apply Mars’ Corporate Wastewater Standard that defines minimum requirements for Mars facilities in the treatment and management of waste water. Where practical treat and reuse wastewater as grey water.

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:

Target	Progress as of 2019 Year End
We will halve the gap to sustainable water usage levels** by 2025 from 2015 levels.	The gap to sustainable water usage levels has reduced by 19.8% (417 to 334 mio m3/yr).
We will improve water intensity (m3/tonne) by 15% at factories in water-stressed locations** by 2020 (from a 2015 base).                                                                                                                        ** See Glossary.	While intensity has improved by 7.1% and withdrawals have reduced by over 11% at our water stressed sites since 2015, it is now apparent that we will miss our 2020 intensity target. This is as a result of increased water usage for cooling and cleaning, coupled with reduced economies of scale caused by falls in production volume at a number of sites.
Twenty Mars factories facing the greatest water-related risks will complete water stewardship reviews in accordance with Steps 1-3 of the AWS International Standard by 2020.	14 site reviews completed.

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 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 Wrigley 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 

Term	Definition                                                                                                            ** indicates another term in Glossary
Mars water usage	To calculate our water use, we map each material in our supply chain to point of origin and use water impact factors from life cycle assessment** to calculate blue water withdrawals** based on tonnes purchased. In time we will migrate, in high-impact locations, to use actual water withdrawal data from suppliers and farmers, or to use crop/soil/location/irrigation technology specific water information in conjuction with consumption models such as CROPWAT.
Scope of Mars’ value chain water targets	To assess the gap to sustainable water usage levels for Mars, we need information on the amount of water withdrawn throughout our value chain, e.g. for agricultural irrigation or factory operations, and the location where these withdrawals occur. This information allows us to check whether a location is water-stressed and assess whether our water use is unsustainable. We have this information for production sites and directly purchased irrigated raw materials, so we have calculated whether these activities contribute to water scarcity. However, some raw materials aren’t yet included in our water program and targets, as we don’t know where the water they need was withdrawn. The main exclusions are: Dairy and meat products from livestock where we don’t know the location of the surface water used to grow, or process, the animal feed. In 2015 these materials represented 23% of Mars’ blue water withdrawals for agricultural production. Plastic and aluminum packaging materials where we don’t know where the water used to extract and manufacture the base materials was withdrawn.
Watershed Catchment River Basin	The area of land from which all surface runoff and subsurface waters flow through a sequence of streams, rivers, aquifers and lakes into the sea or another outlet at a single river mouth, estuary or delta; and the area of water downstream affected by the site’s discharge. (AWS std p28)
Blue Water	Fresh surface water and groundwater, in other words, the water in freshwater lakes, rivers and aquifers.
Blue Water Consumption	This represents the net water consumption from freshwater bodies at watershed level.  Freshwater consumption is equal to the water withdrawn from freshwater bodies (i.e. municipal water, well water) minus the amount of water returned to the same watershed (i.e. via wastewater).  The net difference is the amount of water consumed.  Consumption could be due to evaporation, or inclusion of water in finished goods (like a bottled water product).  We do not take rainwater/green water or grey water into account in this calculation.
Blue Water Withdrawals	This represents the water withdrawn from freshwater bodies at watershed level (i.e. municipal water, surface water, well water).
Life cycle assessment	Where verifiable data is not available from the supplier or supply chain, life cycle assessment (LCA) is used to calculate the blue water withdrawals** required to grow and process raw materials in different locations (e.g., water needed for irrigation or to make fertilizers and pesticides).  LCA is a structured allocation methodology that applies ISO standard 14046 to calculate blue water consumption and withdrawals. Most of the LCA data Mars uses has come from the World Food Lifecycle Assessment Data Base. This is a collaborative initiative supported by many of the world’s largest food manufacturers, including Mars.
WRI Aqueduct	WRI’s web based Aqueduct tool is used by Mars to map water stress globally. In the absence of better local data Mars references the Aqueduct baseline water stress indicator to identify locations in which we operate which are highly stressed and to calculate Mars fair share of water withdrawal reductions required.
Base line water stress (BWS)	The annual water withdrawals divided by the mean of available blue water in a watershed. Baseline water stress measures the level of competition for available water and estimates the degree to which freshwater availability is an ongoing concern. A threshold of 40% water use relative to supply signifies a water stressed location. (Aqueduct Water Risk Framework. WRI, 2013)
Water stressed locations	Locations where local data, or WRI Aqueduct if this is not available, shows that Baseline Water Stress exceeds 40%.
Annually renewable levels	This parameter has two dimensions, firstly the maximum level of water withdrawals that can be sustainably met in a location, and secondly what Mars’ share of these withdrawals should be.  When this information has been defined in a location as a result of scientific investigation, cross-sector collaboration and/or governmental action, this will form the basis of Mars’ assessment of the maximum level of value chain water use that can be considered to be renewable in that watershed. When this information is not available Mars will default to using the “sustainable water use” definition below.
Sustainable water use	Mars regards its water usage in a watershed to be sustainable if it is operating in a watershed with a BWS < 40%. Or watershed BWS >40% and Mars has reduced its total (supply chain) blue water withdrawals since its 2015 base year, in excess of the ratio that the current watershed BWS exceeds 40%. Or the gap to sustainable water use has been closed in the watershed by a combination of reduced supply chain water use and water off-setting activities.
Gap to Sustainable water use level in a watershed	The Gap to sustainable water use levels in a watershed.  = Annual total water withdrawals in watershed (000 m3) x (BWS - 40%) / BWS     where BWS = base line water stress for location.
Total Mars gap to sustainable water use level	Summation of the gap to sustainable water use level in every water stressed watershed from which Mars sources raw materials or in which it operates factories. NB. Mars 2025 SiG Plan water target is to “Halve the gap to sustainable water use levels by 2025 from a 2015 base”
Calculation Example	In 2015 Mars water withdrawals = 2000 m3 in the “Styx” watershed with a Baseline Water Stress (BWS) = 75%.    Gap to sustainable water use level = 2000 x (75 – 40)/75 = 933 m3 In 2025 Mars water withdrawals = 900 m3 in the “Styx” watershed with a Baseline Water Stress (BWS) = 80%.    Gap to sustainable water use level = 900 x (80 – 40)/80 = 450 m3 Unsustainable water use has been reduced from 933 to 450 m3 in the “Styx” watershed = 52% reduction so the 2025 target has been met in this watershed.
What value of BWS does Mars use for water impact accounting when a raw material’s origin location is only known to country, region, state or county level, or to be within a supply shed of known radius from a point?	Mars uses supply shed radius if known, or Google administrative_area_level_1 which returns a first-order civil entity below the country level (i.e. U.S. states) to define the supply shed area. We give this entity an agricultural area weighting specific to the raw material using Mapspam data (2010) or Earthstat (2000), or Mapspam general agricultural data when raw material specific information is not available. All areas are weighted based on (10x10km) pixels ∑ (Ag. pixels x Aqueduct 3.0 BWS pixels) / total Ag. Pixels. We have further refined this approach using a Geographic Information System (GIS) to determine which Aqueduct 3.0 10x10km pixels in a supply shed are < 40% BWS, and we exclude those from the weighted average. The resulting calculated BWS value and unsustainable water usage calculation therefore accounts for; The area and location of land in the supply shed that is known to be used to grow the specific commodity being sourced. The proportion of this land area that is not water stressed (BWS<40%) which is excluded from the calculation. Varying water stress levels in the different watersheds within the identified supply shed.
Improvement Program Accounting Principles	Mars is implementing sustainable agricultural practices such as those mentioned in the “Mars’ Water Action Strategy” section above for rice and mint, which may reduce the amount of blue water withdrawals needed to cultivate a material, increase yield, or both. In these situations, Mars has established four principles to apply in accounting for the improvements made: Mars will only take credit for improvements that we are responsible for implementing. If others have already improved water efficiency to best-practice levels, Mars will use this as the baseline from which to improve. We recognize this is an ambitious target, and we will likely require out-of-value-chain activities in these locations to meet our target. Mars cannot “over-save” by reducing usage by more than the gap to sustainable water use in one catchment and use these “excess savings” to offset the savings needed in another catchment. While Mars may choose to overdeliver by not just eliminating its unsustainable water use in a location but also significantly reducing or eliminating the remaining sustainable water, any additional reductions will not count toward closing the gap to unsustainable water use elsewhere. For agricultural projects, the water we regard as sustainable is allocated by land area. So, if a project improves yield and Mars can source its crop from a smaller land area, then the amount of water regarded as sustainable will reduce in proportion to the reduction in land area, as the farmer will now use this extra “released” land and its associated sustainable irrigation water to cultivate crops not purchased by Mars. Well-established Mars sites in stressed locations will use their absolute withdrawals in 2015 (our SiG Plan baseline year) as their baseline for assessing their gap to sustainable water use. We have not yet defined our long-term approach to accounting for Mars sites that are new or were not well-established in 2015. In the meantime, we will take a conservative approach in our reporting by using either actual 2015 data for sites that were in operation, or by regarding all consumptive site water use as unsustainable for new sites.
Agricultural Improvement Program Example	A new sustainable agriculture program will improve irrigation and yield for mint in a location with 80% BWS, where Mars sources 100 tonnes of a raw material. Before the program: average water withdrawals/tonne = 40ML/tonne. Average land intensity = 2    ha/tonne After the program:   average water withdrawals/tonne = 20ML/tonne.  Average land intensity = 1.5 ha/tonne Before the program: Land area = 2 x 100 = 200 ha Total water use = 40 x 100 = 4,000ML, of which 2,000ML is regarded as sustainable and 2,000ML as unsustainable when BWS = 80% Therefore, baseline sustainable water use = 2,000 ML/200 ha = 10 ML/ha After the program: Land area = 1.5 x 100 = 150 ha Total water use = 20 x 100 = 2,000ML Sustainable water use = baseline sustainable water use/ha x Land Area after program = 10 x 150 = 1,500ML Therefore, the gap to sustainable water use after the intervention project = 2,000 - 1,500 = 500ML So, the Mars intervention has reduced the gap to unsustainable water use by 1,500 ML/yr. in this location.
Mars Site Improvement Example	Mars’ Bedrock site has been in operation for 10 years and has a BWS of 80%. Water withdrawals were 50ML in 2015. The Bedrock site’s 2019 water withdrawals were 60ML after a significant increase in production tonnage. Baseline sustainable water = 50 x (80-40)/80 = 25ML/yr. 2019 gap to sustainable water use = 60 - 25 = 35ML So, Mars’ gap to sustainable water use has increased in this location. Mars will initially aim to reduce water usage through water efficiency improvements; however, if achieving best-practice efficiency levels is insufficient to eliminate the gap to sustainable water usage, then the site will need to employ an out-of-value-chain offsetting activity in the catchment.

 

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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.