In recent years, sustainability reporting has become a standard practice for many companies seeking to demonstrate their environmental, social, and governance (ESG) performance. One key aspect of these reports is the identification of material topics.
Companies that fail to address water issues in the watersheds where they operate are increasingly at risk. The World Economic Forum's 2022 Global Risk Report lists natural resource and water crises among the top 10 severe global risks in the next 10 years. Additionally, the World Resources Institute (WRI) has predicted a 56% gap between global water supply and demand by 2030, if there is no change in the current water management practices globally. This increasing pressure on governments and companies to reduce water consumption due to scarcity threatens efforts to ensure universal access to sustainable water and sanitation for all.
Businesses depend on water for their daily operations, and as water scarcity increases, it can disrupt operations, raise costs, and create regulatory and reputational risks. These more immediate challenges contrast with long-term issues like climate change, making water scarcity a pressing concern. Water scarcity affects businesses regardless of their water usage levels, as it is essential for various operations like sanitation, cleaning, and cooling. Thus, addressing water scarcity is vital for ensuring the sustainability and resilience of businesses in the face of growing water-related challenges.
