How to Manage Water Risks in 2017

All companies face water risks heading into 2017 and beyond. This includes water pollution and enforcement costs, not enough water for operations within factory walls and on down the supply chain or too much in the form of flooding, which also threatens businesses.

Water-related impacts costs companies $14 billion in 2016, or more than five times more than they did the previous year ($2.6 billion), according to CDP. These financial impacts come from drought, flooding, tightening environmental regulation and the cost of cleaning up water pollution and fines.

Shell recently experienced this when a court ordered the company to pay $22 million to a California city after unsafe levels of a chemical, 1,2,3-trichloropropane, or TCP, were found in the city’s drinking water supply.

World Resources Institute Global Water Program director Betsy Otto, in an interview on Esnia, says there are things all corporations can do right now to better manage their water risk. “One is to understand the nature of the water risks you face — too little, too much, too polluted — in specific locations, and use resources such as Aqueduct’s Water Risk Atlas and Global Flood Analyzer to understand supply/demand relationships and flood risks,” Otto says.

Toyota, for example, uses the Aqueduct tool to analyze and map its global water risk. The automaker’s North American operations reduced water usage by 99.8 million gallons over the past year, according to Toyota’s 2016 environmental report.

Ford also uses tools such as the Global Water Tool and Aqueduct to determine which facilities are located in water-scarce regions.

Another action item that should be top-line for executives is to reduce water and energy demand together “because the two are deeply intertwined,” Otto says. “One effective approach to reducing both is to capture the methane from wastewater and use it to power treatment plants, make electricity to feed into the grid and create compressed natural gas to run vehicles.”

To help water utilities better manage water supplies and control water loss, the EPA has published a best-practices document that says utilities should determine if they are making the best use of existing supplies before increasing pumping and withdrawals or constructing new reservoirs.

The document helps utilities assess the potential for future water conservation and efficiency savings to avoid or minimize the need for new water supply development.