Measuring, mapping and understanding water risks around the globe.
Water risks such as floods, scarcity and pollution are increasingly chipping into corporate bottom lines. The financial sector is taking notice--and taking action.
Calvert Investments asked Hanes Brands to evaluate its losses from cotton-supply shortages due to the 2011 US drought, determining that the company lost $5.2 billion.
This article first appeared in Project Syndicate
Water is never far from the news these days. This summer, northern India experienced one of its heaviest monsoon seasons in 80 years, leaving more than 800 people dead and forcing another 100,000 from their homes. Meanwhile, Central Europe faced its worst flooding in decades after heavy rains swelled major rivers like the Elbe and the Danube. In the United States, nearly half the country continues to suffer from drought, while heavy rainfall has broken records in the Northeast, devastated crops in the South, and now is inundating Colorado.
Businesses are starting to wake up to the mounting risks that water – whether in overabundance or scarcity – can pose to their operations and bottom line. At the World Economic Forum in Davos this year, experts named water risk as one of the top four risks facing business in the twenty-first century. Similarly, 53% of companies surveyed by the Carbon Disclosure Project reported that water risks are already taking a toll, owing to property damage, higher prices, poor water quality, business interruptions, and supply-chain disruptions.
The costs are mounting. Deutsche Bank Securities estimates that the recent US drought, which affected nearly two-thirds of the country’s lower 48 states, will reduce GDP growth by approximately one percentage point. Climate change, population growth, and other factors are driving up the risks. Twenty percent of global GDP already is produced in water-scarce areas. According to the International Food Policy Research Institute (IFPRI), in the absence of more sustainable water management, the share could rise to 45% by 2050, placing a significant portion of global economic output at risk.
We seek to catalyze a global movement to enhance water security and bolster economic development through landscape conservation, restoration, and sustainable management.
WRI experts Betsy Otto, Charles Iceland, Tien Shiao, and Paul Reig will attend World Water Week in Stockholm next week. Among other activities, they’ll co-host a session on using satellite data to map global water risks. Here, Andrew Maddocks explores the role that satellite data can play in improving water management. Learn more about WRI’s World Water Week Activities.
To maintain its economic growth and provide for its massive population, China must reconcile two powerful, converging trends: energy demand and resource scarcity. One prime example of this tension is the country’s coal use and water supply.