With its high reliance on manufacturing, mining, and agriculture, South Africa’s economy runs on fresh water. Recent projections estimate a startling 17 percent gap between water demand and supply in the country by 2030. Even more concerning, the areas most affected, the Gauteng and Vaal River regions, are also the most economically significant: According to the Department of Water Affairs and Forestry, these two areas produce more than 50 percent of South Africa's wealth and supply more than 80 percent of the country's electricity requirements (more than 50 percent of all the electricity generated in Africa).
For many companies, water issues have recently migrated from corporations’ social responsibility departments to finance and risk management departments. Companies have been reporting a growing exposure to water-related risks like flooding and pollution, and many have already started to experience water-related business impacts.
This trend prompted WRI’s Markets and Enterprise Program to build a tool to help companies and investors identify water-related risks across their operations or portfolios. The tool, named the Aqueduct Water Risk Atlas, is based on an indicator framework that quantifies and maps different drivers of water risk, otherwise known as the Water Risk Framework. After testing this framework in various regions, WRI recently released its revised version. This updated framework will eventually be used to assess water risks in every part of the world.
The Wei River in west-central China is not just the largest tributary of the Yellow River, but it has also been a critical water source for communities for thousands of years. To manage this important resource, water authorities in China just announced that they plan to invest 6 billion yuan - more than US$950 million - this year to fight floods and pollution in the Wei.
This investment in water management comes after flooding on the Wei killed dozens of people and forced tens of thousands from their homes in the fall of 2011. On top of these terrible human costs come severe economic impacts. According to some estimates, the 2011 flooding cost China more than 6 billion U.S. dollars.
This article is one in a series of updates from WRI’s Next Practice research team to highlight tools and guidance for developing corporate sustainability strategies. It builds on previous themes - Filling the Sustainability Innovation Gap and Mining Megatrends for Innovation - with examples of recent research and evidence that help build the business case for sustainability.
A recent KPMG report highlights ten “sustainability megaforces” that will shape markets in the decades to come. The list includes population growth, energy and fuel, ecosystems decline, and material resource scarcity, among others. These interconnected trends will create risks and opportunities for business. In response, companies need new strategies, particularly for market impacts relating to what KPMG calls the “megaforce” influencing all others: climate change.
Emissions result from a variety of activities, like heating and cooling buildings, traveling to meetings, or shipping products to consumers.
Conceptualizing a Robust Greenhouse Gas Inventory for Financial Institutions
This report takes a first step in helping financial institutions create more robust GHG inventories, by discussing objectives, options, and challenges for financial institutions and stakeholders to consider when creating and evaluating a GHG emissions inventory.
Corporate Environmental and Social Reporting in Emerging Asia
This report focuses on corporate transparency on environmental risks, and lays the groundwork for understanding environmental disclosure and reporting issues in emerging markets through an investor lens. It is the second report in a series establishing the link between issues like climate change...
Insurance as a Risk Management Tool for Climate Change
This working paper aims to clarify the issues around insurance mechanisms designed to improve resilience among the poor to climate change impacts. We hope the analysis will inform the ongoing insurance discussions at the UNFCCC in the build up to the Conference of Parties in Copenhagen in...
Corporate Action for a Strong, Low-Carbon Economy
This report assesses how companies have fared in addressing “cutting-edge issues.” The experiences of our corporate partners illustrate important progress and barriers.
Private Investment Opportunities in Agricultural Water Use Efficiency
This report was prepared by Rabobank in collaboration with the World Resources Institute.