Water is one of the greatest sustainability challenges facing business and a key issue for Australia as the world’s driest inhabited continent. Water not only underpins the global economy but for businesses, water risks – including drought, flood, pollution, scarcity and stress – affect the bottom line and carry a range of environmental and social implications.

A recent report, informed by 600 companies and published by CDP, states water-related impacts cost companies US$14bn in 2016, a significant rise from the reported US$2.6bn cost in 2015.

Companies that responded to CDP identified 4,416 water risks, and expect over half (54%) of these to materialise in the next 6 years – a likely scenario as climate change continues to exacerbate water issues.

Currently, risks are not being addressed fast enough. For example, one key risk identified was supply chain disruption, but less than half (44%) of respondents ask suppliers to disclose water-related information.

Encouragingly, the reporting identified that a pivot towards water stewardship is underway, with increasing numbers of companies recognising the value of managing water in a more holistic way and finding valuable links to building climate resilience.

The Paris Climate Agreement gives additional momentum to the trend towards water stewardship, with CDP’s data showing that almost a quarter (24%) of GHG emissions reduction initiatives reported by business depend on a stable supply of good quality water. Alongside this, over half of companies (53%) report that better water management is delivering GHG reductions, demonstrating the key role of water in climate action.

The UN Global Compact’s CEO Water Mandate helps companies understand and embed corporate water stewardship and disclose water sustainability policies and practices.

Download CDP’s report, Thirsty Business: Why Water is Vital to Climate Action [PDF]

Download the report summary here [PDF]

Visit the UN Global Compact’s CEO Water Mandate: http://ceowatermandate.org/

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