The Financial Risks Of Poor Water Stewardship
With more frequent extreme weather events heading our way thanks to climate change, whether that’s flooding or prolonged periods of drought, there has never been a more urgent time for businesses to review their water stewardship practices so they can increase their resilience in a changing world.
Water is an absolutely essential resource for business operations around the world and future shortages globally could have huge implications for companies big and small, across all sectors and industries.
As the Alliance for Water Stewardship explains: “Good water stewards understand their own water use, catchment context and shared risk in terms of water governance, water balance, water quality and important water-related areas and then engage in meaningful individual and collective actions that benefit people and nature.”
Gaining a deeper understanding of all your water-related risks as a business, taking into account your entire supply chain, will help you bring in the most appropriate strategies that can reduce the risks you face and ensure that you operate in a sustainable way over the long term.
Water-related business risks
Water is necessary for every aspect of business, whether that’s raw material production, manufacturing, product distribution or something else. Transportation, energy production, livestock, irrigation, sanitation, drinking supplies… water underpins everything about 21st century life.
As such, reducing water-related risks is fast becoming a necessity as well, so it’s important to identify those that are most urgent so that action can be taken to ensure continued operations.
Physical risks, for example, could be caused by drought, flooding or pollution, where you are no longer able to access the water supplies and services you need to run your business. Any company in a water-scarce part of the world and which has very water-intensive consumption habits may well have already experienced problems in this regard.
And, of course, with climate change now a serious reality, water scarcity issues are only expected to grow, so this business risk will increase as time goes on.
Companies also must also take regulations and the law into account when it comes to managing their water resources – and it may be that access is changed in the future, or operation costs will go up, which could have a big impact on how corporations use water.
Water conflict and scarcity could drive decision-makers to bring in new laws, regulations and ways of working that could make the landscape more challenging for businesses, so it’s important for stakeholders to take this into account, as well.
Something else for businesses to bear in mind when considering the financial implications of poor water stewardship is that consumers are becoming more discerning about where they want to spend their money – and, increasingly, green credentials are what they look at first when choosing which brands and companies to remain loyal to.
Any business activities that could result in environmental damage or have a negative impact on water resources, ecosystems and communities could see serious damage done to business reputations in return… which, in a hugely competitive world, could mean the end to what would perhaps otherwise have been a very successful company.
How do you improve water stewardship?
In order to drive improvements where water stewardship is concerned, it will be necessary to focus on operational performance, as well as that of the entire supply chain of your business.
It’s also helpful to look at water stewardship as a never-ending journey and it’s likely that you’ll need to review your practices and make changes in the future, based on current events and changes in the overall situation,
WWF has a useful framework that could be a particularly good jumping-off point if you are interested in focusing on water stewardship at the moment. It has identified five steps to take in order to deliver improvements in this regard: water awareness, knowledge of impact, internal supply chain and action, collective action and influence governance.
There is also a global water standard that was launched back in 2014 by the AWS, the first international standard in the world to promote socially beneficial, environmentally responsible and economically sustainable use of freshwater resources, which could also prove helpful for businesses keen to reduce their water footprint.
It can be used to further your understanding of your water use and its impacts, while working collaboratively and transparently to support sustainable water management within your catchment.
Water-using sites are asked by the AWS to view their water-related challenges in such a way that moves them towards best practice in water governance, sustainable water balance, good water quality status, important water-related areas and safe water, sanitation and hygiene for all.
Benefits of implementing this standard include understanding water dependencies and impacts, mitigating operational and supply chain risks, promoting responsible water procedures, building relationships with local stakeholders and addressing shared challenges within a catchment context.
Any site in any sector or industry, anywhere in the world, is able to adopt this standard and it can also be used by others interested in mitigating water-related risks, whether that’s a public sector agency, an investor or corporate professionals.
It’s also worth noting that implementation of water stewardship practices can also have a positive impact on a company’s bottom line, helping them to make potentially significant cost savings across their supply chain, simply by becoming more water efficient.
If you’d like to find out just how much water your business is using and where you’re using it but are unsure where to start, get in touch with the SwitchWaterSupplier.com team today to find out how we can help.
We can advise on a range of issues, everything from bill monitoring and water audits to changing business water supplier. Give us a call today to find out more.