Problems with water supply have had a detrimental impact on business in the last five years, for half of the big companies surveyed in an annual global water report.
The non-profit organisation CDP used data provided by 180 companies listed on the FTSE Global 500 Equity Index and found the percentage of companies predicting that problems with water would impact on their business within the next five years was 16% higher than in last year’s report, reaching 64%.
The most widely reported near-term risks related to water scarcity, followed by flooding and rising costs of complying with regulation. Declining water quality, higher prices and reputational damage were also pressing concerns for many.
The report said the focus of most companies was too narrow, with efforts centred on reducing their own water use. It said not enough emphasis was placed on supply chains, as less than two fifths (37%) required their suppliers to measure and manage water risks and almost a quarter (23%) didn’t know if water posed a risk to their supply chain.
The report called for a “step change” in the way companies dealt with water related risks and said corporate water ‘stewardship’ was the answer to the problems they faced. The study said firms needed to “know their [water] basin” and the impact they were having on it, both in terms of their own operations and their supply chain’s.
Cate Lamb, Head of CDP’s water programme said: “Although we are seeing great strides in corporate ability to identify water-related risks, the approach to managing those risks is misguided. If businesses are to become truly resilient to the growing threats that water poses, they must strive for stewardship.”