Before the world runs short of energy or food, it’s likely to run out of usable water. The U.N. says more than 1 billion people live in water-stressed areas, and every forecast shows the situation getting worse because of climate change and population growth. NASA said this year that 21 of the world’s most important aquifers have already passed replacement point: more water is being taken out than is going back in.
Such numbers aren’t lost on the world’s largest companies, many of which rely on water to operate. According to a new survey from CDP, a London nonprofit, 27% of global corporations are seeing “detrimental effects” because of water-related issues. In 2015, these impacts had a reported value of $2.5 billion.
For example, consumer products giant Unilever says the long-term drought in Brazil will create a “new normal” for its consumers: “For our consumers a lack of access to water is likely to result in a change of behavior such as reduced showering and clothes washing. It is likely that continued drought will further impact on our sales in personal care and home-care categories,” it says.
Meanwhile, Brazilian utility EDP told investors the drought has hurt its hydropower operations to the tune of $167 to $223 million this year.
CDP says 405 out of 1,073 companies “deemed to have high water vulnerability” responded to its survey of water risks–or 38%. And more than half of those haven’t done a “comprehensive risk assessment” to understand where the water risks exist. Only 22% of publicly listed oil and gas companies responded to the CDP, even though that sector is often threatened: two-thirds of those reporting say they’re vulnerable to “substantive water risks.”
On the more positive side, CDP picks out eight companies that have achieved an “A” rating its analysis of water risk preparedness. These include Ford, Toyota, Asahi, Colgate Palmolive, Rohm (semiconductors) in Japan, Harmony Gold Mining, Kumba Iron Ore in South Africa, and Metsa Board in Finland. Each has “transform[ed] current standards of corporate water management to meaningful stewardship,” the report says.
CDP’s results show a stark divide between those companies taking water seriously and those assuming it will always be there when they need it. “Just as oil was to the 20th century, water is fast becoming the defining resource of the 21st century. “Unfortunately … unlike oil, there is no replacement for water,” says CDP’s Cate Lamb.