{"id":501212,"date":"2022-03-08T06:12:22","date_gmt":"2022-03-08T14:12:22","guid":{"rendered":"https:\/\/www.esri.com\/about\/newsroom\/?post_type=wherenext&p=501212"},"modified":"2024-05-10T06:28:47","modified_gmt":"2024-05-10T13:28:47","slug":"water-management-a-rising-business-risk","status":"publish","type":"wherenext","link":"https:\/\/www.esri.com\/about\/newsroom\/publications\/wherenext\/water-management-a-rising-business-risk","title":{"rendered":"Why Water Is Key for Sustainability-Minded Executives"},"author":501,"featured_media":0,"parent":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"sync_status":"","episode_type":"","audio_file":"","castos_file_data":"","podmotor_file_id":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","itunes_episode_number":"","itunes_title":"","itunes_season_number":"","itunes_episode_type":"","_links_to":"","_links_to_target":""},"categories":[],"tags":[477422,97842,1661,22772,381332],"department":[488822],"wherenext-category":[],"industry":[],"class_list":["post-501212","wherenext","type-wherenext","status-publish","format-standard","hentry","tag-a-climate-of-change","tag-agriculture","tag-asset-management","tag-manufacturing","tag-operational-awareness","department-sustainability-risk"],"acf":{"short_description":"Location intelligence helps companies analyze the risks of water scarcity\u2014one of the most significant threats to business continuity.","pdf":{"host_remotely":false,"file":"","file_url":""},"flexible_content":[{"acf_fc_layout":"content","content":"Water is as vital to the cycles of global business as it is to our daily lives. It cools supercomputers that process global transactions, powers hydroelectric energy, replenishes crops that nourish people and livestock, and washes everything from surgical tools to semiconductor chips."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Left","content":"Article snapshot:<\/strong> While business executives focus on energy consumption, emissions, and sustainable practices, some experts say they\u2019re overlooking the greatest rising threat. A look at water management across industries","snippet":""},{"acf_fc_layout":"content","content":"With the oceans covering nearly three-fourths of the earth\u2019s surface, too many business executives and individuals pay little attention to water management. But an alarming drumbeat<\/a> of rising temperatures, worsening droughts, and depleted aquifers is puncturing that complacency, with profound consequences for companies and the economic and social order.\r\n\r\nIn late 2021, S&P Global named water scarcity the biggest threat<\/a> to corporate assets in the coming decades\u2014greater than hurricanes, wildfires, and other hazards. By 2030, water demand is expected to exceed supply by 40 percent worldwide, and half the human population will live in water-stressed areas, according to a McKinsey analysis<\/a>.\r\n\r\nA geographic approach shows promise for guiding companies through this challenge. To understand the risk of water stress to their networks and suppliers, forward-thinking business leaders are turning to a geographic information system (GIS)<\/a> to capture and analyze relevant data in a location-based context.\r\n

Water Management: A Sustainability Priority Executives Can\u2019t Ignore<\/strong><\/h3>\r\nBecause water is critical to the daily operations of countless industries, smart management of this resource has already become the number one sustainability priority for a select group of firms.\r\n\r\nWith a GIS-based smart map of a company\u2019s international operations, a supply chain or manufacturing executive can layer visualizations of data about global warming rates, flood risks, storm overflows, water quality, drainage, groundwater status, or drought intensity\u2014all key components of water management.\r\n\r\nInsights from GIS, known as location intelligence<\/a>, are generating a new understanding of the true price and productivity of water. A company\u2019s utility bill might be cheap\u2014but the cost of building a textile factory in a region where water scarcity could paralyze operations in a few years is not.\r\n\r\nThe operational intelligence GIS provides (see sidebar for more on how GIS works) can help organizations discover sources of waste as well as ways to reuse water that will cut costs and benefit local communities. Location technology empowers business leaders to analyze water-related risks and opportunities, respecting the limits of natural resources as well as an organization\u2019s bottom line."},{"acf_fc_layout":"quote","image":501222,"text":"Without such visibility, executives run the risk of making costly decisions when planning the locations of production or capital investments.","author_name":"","author_profession_organization":""},{"acf_fc_layout":"content","content":"

A Flood of Change<\/strong><\/h3>\r\nIn some regions, water-related disruptions aren\u2019t a looming danger but an immediate threat, with real impacts on global commerce. When the worst drought in a half-century hit Taiwan<\/a> in 2021, it temporarily crippled the country\u2019s semiconductor industry, compounding the auto industry\u2019s supply woes and underscoring the need for water management. In a typical day, a chip-producing facility uses up to 4 million gallons of ultrapure water (filtered to become particle-free) to clean components. In Taiwan, producers were forced to ration water; the world\u2019s largest contract chipmaker even began buying water by the truckload."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Right","content":"How Does GIS Track the Status of Water Resources?<\/strong>\r\n\r\nModern GIS technology aggregates, analyzes, and contextualizes data from reliable sources, creating an easy-to-access atlas of the world<\/a>. An executive trying to gauge the availability of water resources in a region could, for instance, consult a map of satellite imagery showing reservoir changes over time or a network of sensor readings to assess local water stress.","snippet":""},{"acf_fc_layout":"content","content":"Supply chains were similarly rattled when a 2018 heat wave lowered the water levels of Germany\u2019s Rhine river<\/a>, one of the country\u2019s major shipping routes. Freighters reduced cargo or stopped transportation altogether, halting production and driving up manufacturing costs.\r\n\r\nPoor water management poses reputational risks as well. In places like India and Mexico, companies have scrapped plans for new facilities when local communities, worried about equitable access to watersheds, raised outcries.\r\n\r\nMajor tech companies\u2014many of which operate water-intensive data centers\u2014are among the most prominent corporate voices calling for a new relationship with water. Microsoft, Facebook, and Google have all pledged<\/a> to become \u201cwater positive\u201d by 2030\u2014meaning they will replenish more water than they use.\r\n\r\nBut in nearly every sector, there are signs of a dawning awareness that the water-use calculations of the past no longer hold. Companies as diverse as the clothing manufacturer Lululemon, the beer producer Molson Coors, and ride-sharing service Lyft have all begun including water risk assessments<\/a> in their annual SEC reports.\r\n\r\nFor most businesses, the trajectory points toward a changing relationship with water, says Charles Fishman, a journalist and the author of The Big Thirst: The Secret Life and Turbulent Future of Water<\/em><\/a>. \u201cWhatever your water status quo is, it\u2019s going to be disrupted,\u201d he told WhereNext<\/em>.\r\n

Water, Water, Everywhere . . .<\/strong><\/h3>\r\nForward-looking companies are aiming to get out ahead of the issue and adjust decision-making now to forestall water-related disruptions. By interlacing data on ecological and economic trends, GIS helps identify potential impacts to an organization and its stakeholders. With that data, C-suite leaders can rank the locations of greatest priority, determine the next course of action, and monitor impacts using dashboards or smart maps."},{"acf_fc_layout":"sidebar","layout":"standard","image_reference":null,"image_reference_figure":"","spotlight_image":null,"section_title":"","spotlight_name":"","position":"Right","content":"Anticipating the HEAT<\/b>\r\n\r\nTo see projections of water and heat conditions in the US years from now, check out journalist James Fallows' recent article on HEAT.gov<\/a>.","snippet":""},{"acf_fc_layout":"content","content":"\u201cIt is really important to ask, \u2018What impact does water have on our operation\u2014beyond cost?\u2019\u201d Fishman says. Water tends to be cheap, so price isn\u2019t a reliable indicator of its value. Instead, a simple way to gauge its impact is to determine what would happen if the water were turned off. \u201cMost places would be in a world of hurt in 14 different ways,\u201d he says.\r\n\r\nBefore businesses can improve water management, they first must be able to measure the amount of water they\u2019re using. A strong grasp of geographic context is almost always necessary to answer that question comprehensively. To fully know where water comes from, and where it goes once a business has used it, leaders must be able to view the entire chain of operations\u2014from global headquarters to tier 3 suppliers\u2014not just the assets the company owns.\r\n\r\nThe bulk of water use often occurs outside the company\u2019s direct line of sight. In the case of a clothing retailer, for instance, McKinsey found that subsuppliers account for as much as 90 percent of water use<\/a> through the supply chain. The retailer\u2019s own operations might add just 1 percent.\r\n\r\nFishman says the critical questions are simple and direct:\r\n