Aqueduct sheds new light on water risks for business

Managing one of the most important resources in the world is a collaborative issue and should be considered during all planning phases
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hurricane irene
Hurricane Irene dumped millions of tonnes of water on the eastern United States, while elsewhere drought lays waste to crops and livestock. Photograph: Hans Pennink/AP

Water, or the lack of it, is never far from the headlines. While Hurricane Irene (pdf) dumped torrential rain on a huge area of the eastern US seaboard and caused record flooding, prolonged droughts have afflicted the plains of Texas, the Horn of Africa and the Yangtze River. 

These water-related disasters are not only devastating for people and nature. They pose major risks to businesses and economies worldwide.

Economies depend on water to grow their crops, run their machines, and cool their buildings. The withering drought in Texas has cost the agricultural sector $5.2 billion in crop and livestock loss, according to state officials. For commerce, inadequate river flows can make shipping difficult or impossible. Water shortages can lead to power outages and higher electricity costs. And water pollution can increase the cost of treatment. 

With nearly one billion people worldwide lacking access to clean water, there has never been a more crucial time to get water resource management right. Closing the water access gap worldwide should be a top priority. While long-term shifts in precipitation patterns, in part driven by climate change, are threatening water supply, global demand for water is increasing dramatically. With rapid population growth and economic development, global water use has tripled in the last 50 years. This is projected to increase by an additional 50% by 2025 in developing countries, and by 18% in developed countries. As the global population heads toward nine billion people and beyond, rising demand for water is a trend that's here to stay. 

Since the early 2000s, the Coca-Cola Company has undergone a radical evolution in its approach to water. As the challenge of water scarcity has come into focus, Coca-Cola has realised that water resources need to be managed strategically just like any of its other essential ingredients. Indeed, water is literally the lifeblood of its business. 

Coca-Cola spent years building a comprehensive global data package on water scarcity trends around the world in places where the company operates today or may want to operate in the future. This data includes sophisticated hydrological models designed to show where water stress is most acute now, and projections for how the water scarcity situation could change down the road. These detailed global maps provide support for strategic decisions for the most effective implementation of Coca-Cola's global water stewardship strategy and programmes, and how best to manage those risks.  

Until now, the data and one-of-kind maps have been proprietary. However, Coca-Cola has realised that its water information can offer more value and have more impact as a comprehensive, public platform than when only used internally. Coca-Cola has, therefore, released its water data to the World Resources Institute's Aqueduct project

Aqueduct, founded by General Electric, Goldman Sachs, and other large businesses, is using the data from Coca-Cola, along with other sources, to create highly detailed maps of water risks. These maps incorporate information on water availability with other drivers that imperil global water resources and increase water-related risks to society and business. Aqueduct will soon be able to provide precise, high-quality local-level information for many of the most water-stressed river basins in the world. This project is a prime example how businesses and non-profit organisations can work together to address a vital global issue. 

More companies are realising that reliance on scarce water resources creates risks that cannot be addressed in isolation. Because there's so much variety in the availability of water and the types of businesses who use it, water requires collaborative management among companies, NGOs, governments and local communities. 

While Aqueduct represents an important step forward by providing the information needed to assess and understand complex water risks, information alone is not enough. Business leaders and other decision-makers must incorporate water risk management across all planning phases and take appropriate action to enhance the sustainability of their businesses and ultimately, the natural resources upon which we all depend. 

Kirsty Jenkinson is director, Markets and Enterprise Programme at the World Resources Institute. Joe Rozza is manager, Water Resources Sustainability, the Coca-Cola Company


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