Given the record flooding seen in parts of the United States this spring, it may beÃ‚ hard to imagine water scarcity being an issue right now for the business community. However, according to a new report from LloydÃ¢â‚¬â„¢s and the WWF, global water shortages are an increasing threat to business and risk managers must act now to address this risk.
The report observes that as well as being our most important human resource, water is critical for many businesses because all goods require water in their production. But there is a finite amount of freshwater on our planet Ã¢â‚¬“ only 3 percent of the total water in the world is freshwater and less than 1 percent is readily usable by humans. It warns that economic growth, population shifts and climate change will contribute to severe shortage and degradation of global water supplies and ecosystems over the next 30 years.
LloydÃ¢â‚¬â„¢s CEO Richard Ward makes the point that the issue of water scarcity is acquiring a new impetus and managing water is no longer simply a corporate social responsibility matter Ã¢â‚¬“ itÃ¢â‚¬â„¢s now a core business issue:
Over the next few decades, the world will have to make some hard decisions about water. The global population may grow by 3 billion people up to 2050, all of which will need water, and rising prosperity in Asia will further heighten demand. Set against more extreme and unpredictable climate conditions, we in the corporate world will need to find a way to ensure the sustainability, and appreciate the value, of the worldÃ¢â‚¬â„¢s water resources.Ã¢â‚¬
He goes on to observe that this report is not simply for the insurance market, or solely concerned with the physical risks of too much, or too little water. It covers a wide variety of issues relating to water use for todayÃ¢â‚¬â„¢s risk manager. Questions to consider are:
- Ã¢â‚¬ ¢ How confident are you in your ability to maintain a steady supply of water?
- Ã¢â‚¬ ¢ Could the record of your suppliers on water management damage your brand or reputation?
- Ã¢â‚¬ ¢ What new regulations could be imposed on how your company manages water?