A new online tool aims to give companies a better idea of their water usage and management, which is emerging as a key risk for businesses worldwide.
In a report released at the recent World Economic Forum, water supply was among the top five global risks in terms of likelihood and impact - along with the likes of food shortage crises, systemic financial failure, and fiscal imbalances.
The World Wildlife Fund (WWF) notes that a lack of water can affect companies' profitability, and in turn, investor confidence. “In the worst cases, poor water resource management can mean the closure of business operations or relocation.”
With this in mind, the WWF and German development finance institution DEG have introduced the Water Risk Filter, an online water tool enabling companies and investors to address water-related risks.
The Water Risk Filter is a questionnaire that draws on data sheets from 235 countries and aims to identify water risk in supply chains and investment portfolios, and provide practical steps to mitigate risk worldwide, says the WWF.
A companion toolkit also outlines various possible responses, says the WWF, including technical solutions, awareness building and public policy engagement.
“We want to enable users to plan and create strategies for their own company, suppliers or investments to drive down risk and become proactive in responding to water issues they face,” says the WWF.
Some 2.7 billion people are currently affected by water shortages worldwide, and this is only set to climb as the global population heads towards the nine billion mark.
Investors are becoming increasingly aware of the relationship between water risk and sustainability, and the Carbon Disclosure Project recently extended its activities to water-related measurement and disclosure. Its call for companies to reveal data about their water usage and management was backed by 354 financial institutions with combined assets of $43 trillion.
The Water Disclosure Project was conducted in SA for the first time this year, and revealed that 85% of water-intensive users among the JSE Top 100 companies are exposed to water-related risk. It also found that many companies have not assessed the true value of water due to a lack of data, and have yet to calculate how their water resources will be impacted by climate change, supply disruptions and inefficient water use.
According to the WWF, the Water Risk Filter can be used to assess water-related risks for companies' own operations, as well as their supply chains. The results of the risk assessment will provide organisations with guidance on focus areas, including programmes that can be initiated with suppliers and partners.
The WWF and DEG add that the tool is evolving, and invite further development through case studies and suggestions for better underlying data sources. It has also made data security a priority, and once companies have input their data, only they can view the results. The WWF will be able to monitor the use of the tool and the results of assessments, but won't be able to use this or any company input data unless specifically agreed to by that company, it says.
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