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Three Reasons to Take Action on Water
Ryan Flaherty, Manager, Advisory Services, BSR
Given that World Water Day is today, I have taken some time to reflect on corporate water management. And I keep returning to one main question: Why are my colleagues in companies still struggling to get resources to take more action on water?
Most companies understand that water is increasing their operational or sourcing risks, but because water is so cheap, other issues that more directly affect the bottom line tend to take precedence. For those in business grappling with how to make the case for water, I’ve put together three reasons for action (complete with some shareable graphics).
1. The cost of water is increasing.
It’s hard to make the case to invest in an input that’s cheap. For water, those days are coming to an end. The image below shows that U.S. water and sewer costs are increasing much more rapidly than other utilities and the Consumer Price Index. Signals from public and private utilities globally show that this trend will continue and may even accelerate.
Source: Michigan State University Institute of Public Utilities Regulatory Research and Education
2. Water-related uncertainty is on the rise.
Even as the costs go up, water-related extreme weather events are becoming more common and more severe. Insurance companies understand this risk well and are paying close attention to the impact on their customers. The image below shows the increase in the number of extreme weather events and the associated costs.
Source: New Scientist magazine
3. There’s more competition for water.
Competition for inputs is seldom good for business, as it generally drives up cost. This is especially true with finite resources, where supply cannot easily be increased to meet demand. The image below shows the rapidly increasing competition for water. In addition to cost implications, competition for water can lead to allocation decisions that pit companies against other water users. Companies could experience conflict and/or denial of access to water.
Source: UNEP/GRID-Arendal
About the Author(s)
Ryan Flaherty , Manager, Advisory Services
Applying his extensive on-the-ground experience in developing countries, Ryan brings a unique perspective to BSR’s supply chain strategy work... Read more →
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