393136 Water Sustainability and Tools Available for Managing Water Risks
The global business community has become increasingly attuned to the potential business risks surrounding the use of fresh water. These may include physical risks to operations related to freshwater availability and quality, reputational risks when public disputes arise concerning local community needs, and regulatory risks of new fees, regulations, and lawsuits. As a result, demand has grown for water risk assessment tools that companies may use in their efforts to sustainably manage the use of water. Numerous water tools have emerged in recent years, each designed to address specific questions that may inform a company’s water management approach.
This paper introduces and compares a variety of water risk assessment tools currently available and highlights how companies have been using water tools to assess water-related risks, develop plans to improve their overall management of water, enhance external communications, and maintain their reputation and social license to operate. Global and river basin-level tools map sites against key indicators of water risks. They are especially effective in identifying hot spots and establishing relative water risk in a company’s portfolio in order to prioritize water management action. Next, local assessment tools may be used to further investigate water impacts and risks at potentially high-risk sites. Local tools rely on recent, credible sources of data for the watershed surrounding a site, which can be used to characterize physical, regulatory, and reputational risks outside the fence line. Local water risk assessments identify specific water risks and impacts and facilitate the documentation of water management activities and opportunities to mitigate water risks.
As stakeholders drive more companies to take stock of their exposure to water risk, companies applying water tools are deriving business value from their use. They provide an efficient, consistent, and credible process for assessing water-related risks, foster internal company communications about water management opportunities, and facilitate external stakeholder communications about a company’s water use and risk management process. The ultimate business value of water tools derives from incorporating their use into an iterative management process for implementing responsible water stewardship.
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