Concerns about the world’s most precious resource -- water -- are growing, and businesses are increasingly taking note.

A recent survey with responses from 150 large corporations conducted by CDP Water Disclosure revealed that 39 percent of companies have already experienced disruptions in operations, increasing expenses, and other detrimental impacts related to water.

Although water risk is a significant concern, 62 percent of the responding companies also recognized that a water-constrained world could create opportunities to reduce operating costs with efficiency gains and generate new business in innovative water solutions.

As companies become more aware of the issues water presents to their business, they are quickly realizing these risks and opportunities are complicated and difficult to measure with the tools currently available. This complexity is driven primarily by two factors:

• Water is local. Water risks vary from location to location. Physical attributes such as the abundance, quality, and variability of water change from place to place. Water regulations, competition over use, and other “non-physical” attributes are also different for every locale. Often these non-physical attributes are the ones that most impact people and companies.

• One size does not fit all. Although all businesses need water to function, these needs can be very different for different companies. Certain industries, like semiconductor manufacturing, cannot operate without extremely pure water. Thermal power plants need large quantities of water to cool their boilers. The mining sector has to contain and treat the water it uses to avoid spreading pollutants. Companies in these and other sectors each face a unique set of water risks that call for a unique approach to risk management – an approach that works for one may be entirely inappropriate for the others.

Aqueduct: Addressing the Complexity of Water Risk

Aqueduct, under development by the World Resources Institute (WRI), is a suite of tools that provides the context needed to understand, manage, and mitigate water risk. WRI, in partnership with General Electric and Goldman Sachs, has released a prototype version of the tool at the core of Aqueduct: the Water Risk Atlas. The Water Risk Atlas creates maps that illustrate the variations in water risk from place to place, and can be tailored to reflect the particular water related risks that different companies and investors might be exposed to. The Atlas prototype generates these water risk maps for the Yellow River Basin in China. In the future, WRI will expand the tool to include other economically significant and water-stressed river basins, like the Colorado in the western United States and the Ganges in India.