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Grayson_Lynn_COLORBy E. Lynn Grayson

 

The World Resources Institute recently released its Aqueduct Water Risk Atlas (Atlas) to help companies identify water-related risks. The Atlas is a tool that provides geographical and sector-specific water risk context for companies. The Atlas is intended to generate risk maps that will help companies understand the complexities of water risk and to manage their exposure to such risks. When completed, the Atlas will include a global map for current and future water scarcity and water quality as well as detailed, multi-variable risk maps for the most water-stressed, economically significant river basins around the world.

As water scarcity emerges as one of the defining challenges of the 21st century, companies are realizing that a company's water use can pose significant risk to its bottom line. Dwindling or variable water supplies can bring manufacturing to a halt. Deteriorating water quality can lead to higher capital and operating treatment costs. Changes in regulation can expose polluting industries to fines and sanctions. Additionally, a company's reputation can be damaged by unsustainable water use, leading to a decline in sales and revenues. Further complicating the issue, exposure to water risk in all of its forms varies significantly from region to region and across sectors.

The Atlas is based upon a water risk framework identifying 14 indicators in 3 categories of water risks to business.

  1. Physical Risks: Quantity – captures a measure of the risks to business driven by having access to too little water (scarcity) or threatened by too much water (floods);
  2. Physical Risks: Quality – captures a measure of the risks to business driven by water that is unfit for use due to pollution; and,
  3. Regulatory and Reputational Risks – captures a measure of the risks to businesses driven by unstable regulatory environments and social tensions and conflicts around water.

The Atlas is focused upon measuring and mapping water risks in a manner relevant and meaningful to business. The project is supported by business leaders including GE, Dow, Goldman Sachs, Talisman Energy and Bloomberg.

The Atlas is available at http://insights.wri.org/aqueduct/atlas including access to a blog that addresses international water scarcity concerns.