Companies Slow to Act as Water Issues Erode Profits

A survey found 60% of U.S. companies expect water issues such as extreme weather to hurt their business, but few plan to invest more in risk management.

Water Concerns vs. Actions

Researchers distributed an online survey to businesses across the U.S. spanning different industry sectors. Of 51 that responded, including several Fortune 500 corporations, 79% reported currently facing water challenges, and 84% expect they will in the next five years. 60% expect water-related issues will negatively impact their businesses moving forward—a response that has tripled from five years ago. The majority of these companies recognize a broad range of water risks that could impact their businesses, from supply issues that could affect profitability to reputational risks that could affect their ability to market products (if the media uncovered a water pollution scandal, for example). Nearly 80% of respondents said water issues will affect where they locate facilities in the future, referencing both water scarcity and vulnerability to extreme weather as prominent considerations.

Despite the growing awareness, according to the report, there exists a large gap between concern and action. Nearly 70% of responding companies said their current level of investment in water management is sufficient. The authors suggest this is because companies need more time to raise awareness, and mitigating other risks is currently a higher priority. However, the report concludes that water is no longer a peripheral concern, and companies would do best to consider it an essential part of business strategy.

A 2011 report from the Natural Resources Defense Council examined municipalities’ water-related vulnerability, finding a similar lack of preparedness among city governments (see Warm Globally, Flood Locally: Water Crises Loom for U.S. Cities).