Business warned over water shortages

By John Dean - 08 Apr 2011 15:44:0 GMT
Business warned over water shortages

A hard-hitting report has revealed the threat to businesses from damage done to the world's freshwater supplies by problems including climate change.

Produced by pressure group WWF and German bank DEG, the report argues that the shortage of freshwater not only hits people but is also posing an increasing threat to businesses who rely on its ready availability.

The report says that climate change, population growth and increasing living standards are contributing to the rising pressure on already-scarce water resources, particularly in developing countries in areas including South-east Asia and Africa.

According to DEG and WWF, 191 out of more than 300 companies studied as part of the report showed signs of vulnerability to freshwater shortages. They include agribusiness whose sector accounts for 70 per cent of global water consumption.

The bank and WWF hope that investors will realise that they have to factor in water shortages when making their decisions.

Their report says: ''Business risk stemming from a company's relationship to water can be broken into three broad, inter-related categories: physical - as a result of too little, too much or polluted water; regulatory - with dwindling availability and increased pollution, the regulation of water is bound to become stricter; and reputational - public and media awareness of water and how companies are handling this resource is on the rise.''

It adds: 'All of these risks can cause disruption of supply and, in worst cases, termination of business operations.'

Calling on companies to consider the issue more, Martin Geiger, head of Freshwater at WWF Germany, said: ''Sustainable use of water is a responsibility of companies to eco-systems and the local population, which is dependent on this water.'

Dr Peter Thimme, head of DEG's department for Sustainable Development/Environment, said: 'The availability of water is becoming a development bottleneck for companies.'