Every day, our growing population, agricultural needs and the impact of climate change is decreasing our global finite water supplies.
Without the sufficient resources in quantity or quality, even the most conservative business growth agendas are constrained and impossible to execute– not enough water jeopardizes all productions.
On the positive side, scarcity could also offer an advantage in disguise by granting a competitive advantage to companies that gain control over water; however, keep in mind that water is, after all, a human right and a highly complex public shared resource that involves the constant reconciliation of trade-offs between private and public interests. A company’s direct “control” over this essential resource is, then, very limited.
Most companies agree that water has the potential to significantly worsen in the next five years; however, there is an apparent disconnect to address the issue, since “nearly 70 percent of responding companies said their current level of investment in water management is sufficient”, according to the reports from CDP Global 500 and VOX/Pacific Institute, demonstrating that companies still have not properly evaluated the business value of water or potential business value at risk from water risks.
Two major actions that can help the corporate agenda align their water strategy with their business growth strategy are:
- Expanding collective action, where stakeholders sustainably manage water as a common resource and sacrifice short-term for long-term goals and,
- Quantifying the business value of water. Unless water scarcity stops being considered a ‘free’ resource and changes its pricing and regulations, few stakeholders will invest in water protection. The stakeholders’ paradigm needs to change and see that the actual business value of water goes beyond its market cost– the real value of water develops from its uses and it is affected by factors such as quality and the reliability of supply.
In areas such as Texas and California in the United States, regions such as Africa, and countries such as China, where water scarcity is driven by increased competition and extreme drought, multiple constraints and escalating risks are threating businesses’ continuity and growth strategies. Without a clear understanding of the business value of water and enterprise-wide strategy to engage stakeholders, companies like yours could risk their growth by not securing a long-term water supply.
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