Attitudes to water are changing.

In regions with a natural abundance of water, this vital resource has often been taken for granted. However, in 2013, water supply crises were ranked as the third most concerning global risk based on a survey of more than 700 experts from industry, government, academia and civil society. The table below illustrates the concern about water crises.
 

No. Global Risk
1. Fiscal crises in key economies
2. Structurally high unemployment/underemployment
3. Water crises
4. Severe income disparity
5. Failure of climate change mitigation and adaptation
6. Greater incidence of extreme weather events (e.g. floods, storms, fires)
7. Global governance failure
8. Food crises
9. Failure of a major financial mechanism/institution
10. Profound political and social instability

Source: Global Risks Perception Survey 2013-14

The challenges of increasing demand and competing uses for water have raised the profile of this essential resource, bringing water issues to the attention of communities and businesses worldwide.
 

Q. The table above shows water crises are in the top three global risks, in terms of impact and likelihood, but what do you think are the greatest environmental issues facing us?

Click on the image to find out the responses to a global survey on environmental concerns.

 

 

So what has brought about this surge in concern for fresh water?

For most nations, social and economic development is inextricably linked to the quality and availability of freshwater supplies:

  • It plays an integral role in community health and productivity - A healthy workforce is a more productive workforce!

  • It’s needed in the growing and manufacturing of all products - Water is used in everything we make!

Water consumption has risen sharply in recent decades. This trend is likely to continue in the coming years, primarily due to population growth and higher individual consumption due to improved living standards. Considering how vital water is to economic activity, freshwater issues are now taking on strategic importance to businesses, making water a key challenge of the 21st Century.
 

Q. How many significant risks can you think of that are directly determined by a reliable freshwater supply?

The diagram below illustrates how interconnected the natural and economic world is, with water so often the critical factor.
 

Water: at the core of so many risks

Water: at the core of many global risks
Source: World Economic Forum, 2009

 

Work done by the CEO Water Mandate states that there are two aspects to business and water resources – risk and investment opportunity. The three types of business risk are:

  1. Physical Risks: the physical risk of either water shortage or lack of required water quality. This mainly affects sectors that use water as part of the production process, e.g. agriculture, food and beverage processing and energy companies.

  2. Regulatory Risk: the conditions on use of water or the discharge of water, e.g. permits and licences (for extraction), price control and water quality standards (e.g. discharges).

  3. Reputational Risk: increasing competition for clean water among economic, social, and environmental interests has a large potential for damaging the reputation and even growth prospects of companies.
     

The business risks associated with declining water quality and availability are complex and increasingly significant. However, businesses are also seeing a variety of investment opportunities in water efficiency, treatment and distribution products and services for better water management.

Hear how one company minimised exposure to environmental risks using a sustainable business approach:

 

 

Improved access to fresh water has a direct positive impact on people and communities leading to significant social, economic and environmental benefits. Effective management of freshwater resources helps sustain agriculture, industries, ecosystems and communities.

 

Further Reading

Weblinks

The business opportunity in water conservation - how companies must learn to do more with less.

Next generation water policy for businesses and government

Sustainability and Equity: A better future for all (UNDP Human Development Report, 2011) - read about the role of water in achieving sustainability.

Resources on global water challenges and water-related business risks

PDF

Human Perspectives on the Global Water Crisis

Challenges of Water Scarcity: A Business Case for Financial Institutions - read more about the challenges businesses may face in light of global water issues and actions to overcome these.

Exploring the links between water and economic growth (Data correct as of June 2012)

 

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