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World Water Forum Update: Business facing surging water risk

Posted by: Aqua Blog Maven on March 19, 2009 at 7:36 am

From the Pacific Institute, this press release:

March 18, 2009: Istanbul, Turkey: A world running short of water is presenting a new category of risk to business that many have not even begun to appreciate, the World Water Forum in Istanbul was told today.

And while some leading companies have made great improvements in using water more efficiently in their own operations, they will need to look deep into their supply chains and into the performance of water regulators, warned WWF and noted U.S.-based water research body, the Pacific Institute. “If you are an efficient business sitting in a poorly managed river basin you are still exposed to extremely high water risk,” said Stuart Orr, freshwater manager at WWF International.

Water is so basic a commodity that many businesses do not realise the extent to which disruptions in supply or increases in price – both predicted with increasing frequency – can effect their operations.
“The companies that will best shield themselves from the unexpected will be those that have assessed water requirements and risks in both their direct and indirect operations and in an integrated way with other emerging risk categories such as with climate and energy,” said Jason Morrison, program director at the Pacific Institute.

Morrison used an example of a brewery in an area where climate change had impacted heavily on water supplies. The company not only found unexpected cost increases and reductions in its own water supplies but also rapid increases in energy costs as hydroelectric generation capacity was reduced and difficulties in sourcing barly and hops as water-short farmers put land into fallow.

“Water risk assessment should include physical risks, such as running out of water, and reputational risks where companies can be perceived as irresponsible users of a scarce resource by communities, consumers of their products, regulators or financiers,” said Morrison. “Companies should also consider the risk of more onerous and costly regulation and financial risks as water shortages translate into higher energy prices, higher insurance and credit costs and lower investor confidence.”

The growth in instruments such as water footprint studies and industry standards for water use and discharges was an encouraging sign, but business, often together with civil society, should also become involved in urging better water policy and management overall, Orr said.

“It will be better for business to be seen making a positive contribution to public policy processes over water in a climate of water shortages rather than as a powerful player interested mainly in grabbing or defending its share of water,” Orr said.

Business involvement in improved water management can include advocacy and lobbying for better policies in company with civil society and communities, other partnerships with governments and water authorities, and financial support for infrastructure and capacity building, a key factor in the developing world.

Reports:
WWF: Understanding Water Risks: A Primer on the Consequences of Water Scarcity for Government and Business at http://assets.wwf.org.uk/downloads/understanding_water_risk.pdf
Pacific Institute: Water Scarcity and Climate Change: Growing Risks for Businesses and Investors at http://www.pacinst.org/reports/business_water_climate/index.htm

About the Pacific Institute
Based in Oakland, California, the Pacific Institute is a nonpartisan research institute that works to create a healthier planet and sustainable communities. Through interdisciplinary research and partnering with stakeholders, the Institute produces solutions that advance environmental protection, economic development, and social equity. The Pacific Institute’s Water Program seeks to transform the way societies perceive, manage, and use freshwater resources. www.pacinst.org

About WWF
WWF is one of the world’s largest and most respected independent conservation organizations, with almost 5 million supporters and a global network active in over 100 countries. WWF’s mission is to stop the degradation of the earth’s natural environment and to build a future in which humans live in harmony with nature, by conserving the world’s biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption. www.panda.org/media for latest news and media resources

March 19, 2009 · Filed Under International Water Issues

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