Water Stewardship: The Imperative for Sustainable Business

In the face of escalating water scarcity and climate change, businesses are increasingly recognizing the necessity of integrating water stewardship into their core strategies. This is not merely a matter of corporate social responsibility; it is a strategic imperative that can significantly impact a company's bottom line and long-term viability. The World Economic Forum's recent assessment, which listed water scarcity as one of the three global systemic risks of highest concern, underscores the urgency of this issue. As the world grapples with declining groundwater tables, reduced river flows, and heavily polluted waters, the need for sustainable water use has never been more pressing.



The economic implications of water scarcity are profound. Water is essential for a wide range of business functions, from manufacturing and agriculture to energy production and technology. A shortage of water can disrupt operations, increase costs, and even force companies to abandon projects. For instance, General Motors faced a $2.1 million increase in manufacturing water needs and an additional $5.9 million in electricity costs due to a drought in Brazil in 2015. Similarly, Taiwan Semiconductor Manufacturing Corporation had to truck water for miles to keep its chip fabrication plants running when the local water supply dried up, growing their water costs exponentially. These examples illustrate the tangible financial risks that water scarcity poses to businesses.

Moreover, the reputational risks are equally significant. Consumers are becoming increasingly aware of the environmental impact of businesses and prefer to support companies that demonstrate a commitment to sustainability. The Ecolab Watermark Study found that consumers ranked access to clean, available water as a higher priority than even addressing climate change and pollution. Companies that fail to address water stewardship risk damaging their brand and losing customer trust.



The integration of water stewardship into corporate strategies contributes to long-term financial stability and growth for businesses in several ways. Firstly, it helps mitigate the risks associated with water scarcity and quality degradation. By proactively managing water resources, companies can avoid costly disruptions and maintain operational continuity. Secondly, water stewardship can lead to cost savings through increased efficiency. Companies that implement water-saving technologies and recycling wastewater can significantly reduce their water footprint. For example, Coca-Cola has invested in water efficiency across its bottling plants, reducing its water usage ratio while increasing production. This not only saves costs but also enhances the company's reputation as a responsible corporate citizen.

Thirdly, water stewardship can help businesses comply with regulatory requirements and avoid potential fines or penalties. As water scarcity becomes more pronounced, governments are likely to implement stricter regulations on water use. Companies that have already integrated water stewardship into their strategies will be better positioned to comply with these regulations. For instance, the SEC proposed new rules that would require disclosure of the percentage of assets located in areas of water stress along with those assets’ total water usage. This regulatory environment underscores the importance of proactive water management.

Lastly, water stewardship can support long-term economic stability by ensuring the availability of water resources for future generations. As water scarcity becomes more prevalent, businesses that have implemented sustainable water practices will be better positioned to adapt to changing conditions and maintain their operations. For instance, the World Bank projects that some areas could see GDP growth rates decline 6% by 2050 if water-management practices don’t improve. By proactively managing water resources, companies can contribute to the sustainability of the planet and secure their own future.

However, implementing water stewardship practices is not without its challenges. Companies face several key obstacles, including water scarcity and quality, regulatory risks, reputational risks, and economic risks. These challenges can be effectively managed through strategic planning, stakeholder engagement, and innovative solutions. For example, companies can mitigate water scarcity risks by assessing their water footprint and implementing water-saving technologies. They can proactively engage with regulatory bodies and advocate for effective water management policies. They can enhance their reputation by setting and achieving water consumption and pollution reduction targets, and by reporting on their progress transparently. They can reduce economic risks by investing in water storage and transfer infrastructure, which can improve availability and allow for further growth in demand.

In conclusion, water stewardship is not just a corporate responsibility; it is a strategic imperative that aligns business success with the sustainable management of the world's most precious resource. Companies that integrate water stewardship into their strategies will be better positioned to navigate the challenges of water scarcity, comply with regulatory requirements, enhance their reputation, and secure their long-term viability. The future of business depends on our ability to manage water resources responsibly and sustainably. The world must choose: cooperation or collapse.