In recent years, water and water-related risks have become a critical topic for discussion across the globe in a wide array of industries. The UN-Water states: “Climate change is primarily a water crisis. We feel its impacts through worsening floods, rising sea levels, shrinking ice fields, wildfires and droughts.” A fundamental component in creating a climate-resilient business is understanding, adapting, and mitigating water risks.

One of the ways businesses are addressing these risks is through the process of Water Stewardship. The Alliance for Water Stewardship (AWS) define Water Stewardship as “the use of water that is socially and culturally equitable, environmentally sustainable and economically beneficial, achieved through a stakeholder-inclusive process that involves site- and catchment-based actions”.

Businesses that are Water Stewards understand their facilities' water requirements (quality and quantity) and risks whilst looking beyond their fence line to be aware and collaborate with those that can impact the water they use as well as those they will impact upon.

Celebrating their completion of the Alliance for Water Stewardship Standard System Training, SLR’s Tracy Thompson and Emily Owen wanted to share an introduction to Water Stewardship and why it is such an important consideration in long-term business risk management. Tracy and Emily are professionally credentialed to specialist level with the Alliance for Water Stewardship.

Understanding the risk

Water is often a key part of operations, but its importance can be dismissed due to its low cost and relatively easy access, particularly when it comes from a municipal source. But as water scarcity increases across the planet, limits on available water can significantly impact:

• Supply of water for operation and supply of primary input products, which could also be water-dependent;
• Business growth at assets with water restrictions;
• Future economic viability and
• Employee health and wellbeing.

Supply of water and primary products

Many businesses have some form of reliance on water supply for their operations. In some activities, water dependence is an obvious consumption, with water becoming embedded in the output product (like growing a tomato), whilst others may need the water for cooling or to meet health and safety requirements.

For businesses using a municipal supply, this comes at a flick of a tap. But where does that water come from? How aware are you as a business of probabilities that the municipal supply will fail to meet supply? In the UK, water companies have been publishing their most recent water resource management plans and even in a country with a reputation for soggy weather, the cumulative stresses on water supply are clear. Major infrastructure upgrades and new projects are being planned to help meet these demands. But infrastructure can only move water around and if there is no water under their control or the quality is not suitable, then the supply will stop. And then what? Without a plan, you are looking at either a halt in operations or bringing water in yourself, both of which will be a large cost to the business. If you haven’t considered this, can you afford it?

Other sites may abstract their water from boreholes and rivers. This gives the impression that you have control of your water supply. But if too many people are abstracting from the aquifer, groundwater levels may descend below the base of your pump or borehole. What if you have a fluvial abstraction and an upstream user has a discharge of contaminated water? You are still interconnected with everyone (and environmentally sensitive area) within your catchment. Even when you are not reliant on the municipal supply there is potential for your water source to not be available and this can have significant cost implications.

And what about your suppliers? Agriculture, mining, and refining of petroleum products, chemicals and chemical products are all major users of water and water shortages could see disruption for your supply of these inputs. Where you use local suppliers this could mean that not only do you not have any water for your processes but nothing to process either.

Water stewardship practices plan for these eventualities as well as taking actions to reduce the pressures on the water supply with improved water efficiency and not reducing water quality. They then look at working collaboratively across the catchment, to meet shared opportunities to reduce the water stresses.

Limits to business growth

Typically water is controlled in terms of volume allocated to a business. As businesses grow, their water demand may increase and result in the water requirements surpassing their permitted allocation or supply. However, in areas of water stress, it may be the case that no more water can be allocated to a business, and this will prevent the growth of a facility. Firstly, you don’t want to find this out once you have spent the time, effort and money on developing your business and infrastructure plans and secondly, there are many other reasons you may want your facility located here such as access to markets and local expertise.

Working to understand the water risks of your business also helps you to reach the full potential of your water opportunities.

Future economic viability

In their 2020 report A Wave of Change, CDP calculated that of the companies that had disclosed through the CDP water security questionnaire in 2020, the combined revenue at risk was US$301 billion. The total cost of investment to address these risks was just US$55 billion. Additionally, the cost of rectifying water scarcity issues both in terms of quantity and quality is significantly higher than managing the water in the first place. Typically, when water supply fails, the cost of alternative water sources is drastically higher and can be depended on major infrastructure projects.

A problem shared is a problem halved?

Water challenges are complex, dynamic and can be multifaceted in your area, involving several issues beyond your business's control. But it is important to understand that water challenges within a catchment are interconnection and therefore shared - the actions of one can affect all. Very few businesses are in a position to solve the water challenges beyond the facilities fence line. Due to the interdependence of catchments solutions are reliant on stakeholders working together. This is why one of the fundamental cores of Water Stewardship is facilitating collaborative action and working together towards solutions by facilitating and empowering other stakeholders in your catchment, it is possible to share costs and find win-win opportunities.

At SLR we have been supporting our clients with water stewardship, helping them use water in a way that is socially equitable, environmentally sustainable and economically beneficial. This is achieved through a stakeholder inclusive process that involves site and catchment-based actions. To learn more, please get in touch.

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The content herein is the author’s opinion and not published on behalf of the Alliance for Water Stewardship (AWS). The author holds an AWS Professional Credential and this piece of publishing helps fulfil their Continuing Contribution Units requirements. For more information about AWS or the AWS Professional Credentialing Program please visit https://a4ws.org/.