Many of you may not know that the quantity of water on the planet has been effectively fixed since it first appeared 3.8 billion years ago! At a fundamental level, we must all be aware that water is part of a global cycle that involves a period of replenishment. It is a closed-loop that has its own rhythm, which is not in line with that of our society, where immediacy rules. Long-term strategic thinking is required to allow water to regain its main role: as a resource for the future, a life source.

One of the things that we’ve learned over the past ten, 15 years, particularly through satellites, is that many groundwater reservoirs are depleting rapidly. Obviously, because they’re underground, they’re invisible. We don’t see them, and so people take no notice. But they’re like a bank account. We’re drawing money out of this bank account and we’re going into debt.

Water is as important to the world’s economy as oil or data. Though most of the planet is covered in water, more than 97 percent of it is saltwater. Freshwater accounts for the rest, although most of it is frozen in glaciers, leaving less than 1 percent of the world’s water available to support human and ecological processes.

Water risk is not a worry to be addressed in some distant future. The supply of freshwater has been steadily decreasing while demand has been steadily rising. In the 20th century, the world’s population quadrupled—but water use increased six times. By 2050, according to UN estimates, one in four people may live in a country affected by chronic shortages of freshwater. 

Water stress is a risk multiplier. Alone, it is a powerful risk with the potential to upend socioeconomic and ecological systems. When compounded with other risks, such as those related to food and energy systems, politics, and infrastructure, it becomes detrimental, and eventually a war booster.

The water issue is the reverse of the carbon problem; the cause is global, but its manifestation is highly spatial and can be addressed in a concentrated way.

In a world where demand for water is on the road to outstripping supply, many companies are struggling to find the water they need to run their businesses. As water stress grows, they will experience that risk in different cost forms: financial, legal, goodwill, and stakeholder relations. The first step to overcome these issues is to study where their processes use water and how much of it. Often, there are a few areas where significant improvements can be made, for a small outlay.

Companies can affect to help mitigate water stress via direct operations, and/or via their supply chain. Within their four walls, companies have several levers they can use to reduce water stress. They can implement water measurement and reporting practices, even including water use in relevant company key performance indicators. Companies can use their influence to ensure that their suppliers and their suppliers’ suppliers are equally rigorous about their own contributions to water stress. Some businesses may choose to go further by using their influence in partnerships that promote water resilience, like the one that belongs to “Pacto para a Gestão da Água em Portugal”.

The low nominal cost of water in many regions means that a lot of investments aimed at cutting its use don’t seem to offer satisfactory returns. This may change when organizations take a broader view of the water: as a “carrier” of production inputs and outputs to which a variety of costs and recoverable values can be assigned.

Water is the lifeblood of humanity. With it, communities thrive. But, when the supply and demand of freshwater are misaligned, the delicate environmental, social, and financial ecosystems on which we all rely are at risk. Climate change, demographic shifts, and explosive economic growth all exacerbate existing water issues. To continue operating, companies in most sectors must learn how to do more with less. Achieving that goal is an opportunity as well as a necessity. 

However, hope is not lost. Businesses can play a leading role in mitigating the water issue to limit not just their own risk but also the risk of all stakeholders relying on these systems. 

The Future of Water depends on everyone’s actions, companies included!

Have a great and impactful week!

Marta Lima
Executive Director Pacto para a Gestão da Água

This article refers to edition #132 of the "Have a Great and Impactful Week" Newsletter and covers SDGs 6 and 17.
Subscribe here to receive the weekly newsletter!