Water risk can cost your business billions. Is your company set to sink or swim?

Himanshu Gupta • December 7th, 2022.

 

Water-related issues will be the defining challenges of the 21st century. Around the world, water sources face new threats from human activity and climate change, including water stress, extreme weather events, scarcity, contamination, and unpredictable access.

For companies, such water impacts quickly turn into material financial risk through increased costs or lost revenue. The total potential cost of reported water risks was more than $300 billion in 2020 alone, according to estimates from leading risk nonprofit CDP.  

As these risks accelerate, investor interest, consumer focus, and regulatory action are converging on this key set of issues. In our new e-book, we focus on: 

• the dimensions of water risk and how they affect businesses
• the types of businesses are most at risk now and over the coming years
• the current parameters for evaluating water risk
• what companies are doing today to mitigate water risk
• where current practices fall short
• effective ways to mitigate water risk and even identify water opportunities

In the e-book, we cover how forward-thinking companies are already taking action by assessing their water risks. Their approaches are similar to climate risk assessments: Typically, they start with watershed evaluation (largely using the World Resources Institute’s open tool called the Aqueduct Water Risk Atlas); then, evaluate suppliers; next, evaluate local risks; and last, disclose publicly, often using CDP, the global disclosure system for environmental impacts.

Still, voluntary water risk disclosure can lead to a lack of comparable, consistent, and quantifiable measurements — which are necessary for companies and investors to understand, price, and manage climate risks and opportunities.

New tools and technologies can help companies understand their water-related risks — however, unfortunately, today’s water risk assessment tools and methods leave major gaps in key decision-making information for companies. Three large gaps remain in current water analysis tools:

In addition, while there is a lot of publicly available data, having it all in one place and getting key insights is an arduous task for most companies. Companies need more granular, accurate, business-specific, and actionable resilience tools to adapt to a water-scarce, climate-changing world.    

An end-to-end water and climate resilience platform can meet companies’ challenges by projecting future water impacts and extreme weather risks, and translating them into financial terms, for the year or decades ahead. Better forecasts and climate insights will be essential as conditions get more volatile and water becomes more scarce. 

Given the intrinsic connection between water and climate, water availability needs to be broken down by industry-specific metrics, such as surface water, groundwater, soil moisture, and other variables, and displayed alongside climate variables like heat waves or hurricane risks, for desired time scales, from months to decades.

This e-book takes you through the who, what, where, and why of water risk: Download Now

 

Ready to dive into better water risk insights? Contact us today for a demo of our water risk tools. https://climate.ai/request-a-demo/