Water Scarcity and Sustainable Usage

The Water Use – Supply Chain Material ESG Issue (MEI) focuses on how companies utilize water and manage associated risks within their production processes and supply chains. The sustainable utilization of freshwater, a finite natural resource, gains significance amidst escalating global water scarcity. Projections from the United Nations warn of a potential 40% water deficit by 2030. Identifying Risks: Factors Contributing to Water Vulnerabilities Water risks predominantly arise from a company's reliance on water for internal processes and raw material production. Sectors such as mining, agriculture, and semiconductor manufacturing exhibit heightened water intensity. Navigating Geography: Contextualizing Water Risks Assessing a company's water risks necessitates consideration of its facility and supplier locations. Factors influencing water availability encompass water reserve presence, permit requirements, water network quality, and local water demands. Hotspots of Concern: Focusing on Water-Stressed Regions Particular attention is warranted for companies operating in water-stressed areas like portions of Chile, the United States, and Australia, where water scarcity exacerbates risks. Stewardship Strategies: Mitigating Water-Related Risks Companies committed to water stewardship are better equipped to mitigate water risks. Embracing an adaptive business model entails water risk assessments, supplier and community engagement, and the implementation of water recycling systems.