Water bills make up a tiny fraction of operating costs even for companies that use vast amounts of the stuff, and ample supplies have traditionally been taken for granted. But in many areas of the United States and around the world, fresh water is becoming increasingly scarce, polluted and contested.
According to a recent study led by McKinsey, the world may face a 40 percent shortfall between forecast global water demand and available supplies by 2030. In this high-risk environment, companies with water-intensive operations and supply chains – energy, mining, manufacturing, food and beverage, electric power – have the most at stake.
Some in the business world are starting to realize this, with companies from Levi Strauss to PepsiCo to IBM acknowledging the challenge and seizing the opportunity to act. Institutional investors including the Norwegian sovereign wealth fund and the California State Teacher’s Retirement System are also taking on the issue, asking companies in their investment portfolios to better manage water risks.
To create real, large scale, lasting change, however, these organizations need tools to plan, track and measure success. To help companies and shareholders like these create real, lasting change on a larger scale, Ceres and the World Business Council for Sustainable Development recently released a new roadmap for 21st century corporate water management, the Ceres Aqua Gauge. It’s a practical (and free) self-assessment tool that outlines detailed steps for effective water risk management, from the boardroom to the factory floor to the farm field.
Next page: 3 ways to better manage your company's water risk