In its 2014 Global Risks report, the World Economic Forum identified water crises as one of the risks of highest concern. For businesses, it is important to understand operational and market contexts to manage water risk and leverage opportunity, according to The Guardian.
Businesses can manage water resources with a simple six step process:
1. Quantify the direct and indirect water footprint.
To develop a coherent strategy on water, businesses need to first understand the volume of water consumed across the value chain and where this water consumption is located.
2. Map water risks.
Once water footprint is established, businesses can then make geographically-relevant assessments of water scarcity, water stress or other applicable water risk factors to develop an overall risk map.
3. Identify high priority areas for action.
A good example of this step is Volkswagen’s Think Blue factory program for reducing water and energy consumption, where it identified that 90 percent of its water consumption occurred in its upstream manufacturing process.
4. Identify improvement opportunities in high priority areas.
After prioritization, establish what measures can be taken in high priority areas to minimize impact and mitigate risk.
5. Establishing a strategic framework.
New metrics and targets must be established to track performance and drive improvement in key areas.
6. Establish collaborative partnerships.
Businesses must think collaboratively, and leading companies are already demonstrating the value of partnerships in managing water risk in their value chains.
According to a CDP report published last week, two thirds of the world’s largest companies — including Merck, Unilever and H&M — are reporting exposure to water risks, some of which have potential to limit growth.
This concern was echoed earlier this year in an Environmental Defense Fund blog, which said that companies including AT&T, Deloitte, MillerCoors and Veolia see water scarcity as a business risk.
Photo Credit: Water shortage via Shutterstock