As corporate commitments to environmental, social, and governance (ESG) goals reach an all-time high, a persistent blind spot remains: water. Long emphasized by Professor Yong Sik Ok of Korea University, who serves as President of the International ESG Association, water stewardship has lagged behind carbon emissions, which are now tracked with near-surgical precision. In contrast, corporate water management is often confined to vague qualitative disclosures and limited metrics.
To address this imbalance, a research team led by Prof. William Mitch of Stanford University and Prof. Ok of Korea University, in collaboration with Prof. Jay Hyuk Rhee of the Korea University Business School and the International ESG Association, has introduced a new framework to curb greenwashing in ESG reporting. Published in Nature Water on February 10, 2026, the study presents the Water Sustainability Index (WSI), a transparent, quantitative metric designed to strengthen corporate water accountability worldwide.
Prof. Mitch and Prof. Ok explained that the index shifts ESG water reporting from broad narratives to measurable and comparable outcomes. The metric evaluates corporate water withdrawals, consumption, discharge quality, and reuse while accounting for local water scarcity, thereby helping to guide investments aligned with the United Nations (UN) Sustainable Development Goal (SDG) 6.
The Transparency Gap
The impetus for the WSI emerged from a stark data disparity identified by the research team through an analysis of the London Stock Exchange Group database. While 14% of major companies reported greenhouse gas emissions, only 9% disclosed total water withdrawals, and just 1% reported recycled water use. “Water is fundamentally different from carbon,” Prof. Ok said. “While carbon is a global issue, water is intensely local, and ESG metrics must reflect that reality.”
Prof. Mitch and Prof. Ok emphasized that withdrawing a million gallons from a water-rich region is not equivalent to withdrawing the same amount from a drought-prone basin. Existing ESG metrics often fail to capture this nuance, relying on non-uniform and opaque algorithms that vary across reporting entities. This lack of transparency creates opportunities for inconsistent assessments and unintentional “greenwashing.”
A Weighted Approach to Scarcity
To overcome these limitations, they designed the WSI to move beyond simple volume tracking. The index calculates a score based on source water type, watershed-level water stress, wastewater discharge quality, total consumption, and the extent of water reuse. Prof. Mitch noted that this multidimensional framework provides a more accurate assessment of corporate water impacts.
"A critical feature of the index is the use of weighting factors," Prof. Ok explained. "Higher weights are applied to operations in stressed watersheds, defined as regions where withdrawals exceed 40% of available freshwater, as well as to groundwater use, which is more difficult to replenish than surface water." This approach penalizes unsustainable practices while incentivizing investments in efficiency and alternative water sources.
From Negative to Positive: The Power of Reuse
To demonstrate the WSI’s effectiveness, the research team evaluated seven theoretical scenarios. A baseline facility extracting groundwater from a stressed area and discharging low-quality wastewater received a score of 1.17, highlighting significant sustainability risks. Relocating the facility to an unstressed area raised the score modestly, but Prof. Ok noted that geography alone is not a long-term solution.
The most dramatic improvements came from technological interventions. When internal process-water reuse was implemented, the score increased to 1.98. Combining reuse with water quality upgrades and optimized siting yielded a maximum score of 3.0. “The quantitative nature of the WSI allows companies to identify cost-effective pathways to improve water sustainability,” Prof. Mitch said. “It enables scenario testing before capital is committed.”
Setting a New Global Standard
Prof. Mitch and Prof. Ok envision the WSI as a bridge between complex scientific frameworks, such as the ISO 14046 Water Footprint, and the practical demands of voluntary ESG reporting. By providing a single, reproducible score, the index aims to reduce discrepancies where the same company might receive an “A” rating from one provider and a “D” from another.
As global water stress intensifies—with 25% of the world’s population already living in extremely high-stress watersheds—Prof. Rhee emphasizes that transparent and quantitative metrics are essential. The researchers conclude that widespread adoption of the WSI could facilitate cost-effective corporate investments and help the global community progress toward UN SDG 6 for clean water and sanitation while reducing ESG “greenwashing.”
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Reference
DOI: 10.1038/s44221-025-00575-9
About the International ESG Association
Founded on May 4, 2021, by Korea University Professors Rhee Jay Hyuk and Ok Yong Sik, the International ESG Association (IESGA) is South Korea’s first global academic network dedicated to advancing corporate sustainability. As of June 2022, IESGA has connected over 400 institutions across 48 countries to establish a foundation for improving collective intelligence about the present and future of ESG management. Its mission focuses on creating and sharing cutting-edge knowledge, establishing global ESG criteria, hosting academic seminars, and providing specialized consultancy and educational programs. A landmark achievement includes co-hosting South Korea’s first Nature conference in 2021 with LG Energy Solutions, which engaged over 2,000 participants from 97 nations.
More information is available at: https://iesga.org/
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