There is no shortage of troubling statistics to prove that water management is a global challenge. About 1.2 billion people currently face water scarcity, and a population expected to grow to 9 billion by 2050 will put increased strain on already pressured water supplies worldwide.
But while the water challenge is truly global, it also demands solutions that are tailored to local conditions. Availability, use, and quality of water vary dramatically from place to place.
How Businesses Manage Local and Global Water Risks
Multinational companies and their investors require a global perspective when making strategies or allocating resources across their supply chains and portfolios – like a panoramic picture that shows a whole landscape. However, they also need accurate, detailed, local data to support specific decisions – like a close-up photo of a single flower. Just as a photographer needs the right lens to create the desired image, companies need tools to understand water risk from different perspectives.
World Wildlife Fund (WWF) and World Resources Institute are collaborating to provide global context for water risk in a way that is relevant and meaningful even at the local level. Both organizations have created tools for better understanding water risk around the world .
New Indicators to Evaluate the Full Spectrum of Water Risks
One factor that widens the gap between global coverage and local accuracy in measuring water risks is the complex ways in which those risks can manifest themselves. Physical water risks—such as lack of sufficient quantity, inadequate quality, and competition over use—are relatively concrete and are well-covered and the Water Risk Filter. It is more difficult to capture the risks related to unpredictable water regulation, poor resource governance, and reputational challenges companies can face if they’re seen as poor water stewards in their communities. New indicators should be developed that can provide some insight into these “soft” water risks. Even though such global indicators will not provide a perfect picture of governance, regulatory, and reputational risks facing all companies in all places, they will be a useful guide for companies seeking to better understand where and how they are exposed to those complex threats.
And we’re not alone: Many other groups offer water assessment tools in this arena, each bringing new technologies and data to the table. Ultimately, however, a tool is just that. It can’t make decisions, implement policy, engage with communities, or direct investments. Use of any of these water risk tools must be a starting point, not an end in itself.