Poses Threat to Global Business
Growing Threat of Water Scarcity and
Pollution Creates Serious Risks
Businesses around the world, from beverage
companies to chip manufacturers, are failing to prepare
for the serious economic and political risks posed by growing
competition for fresh water, the threat of water contamination,
and rising water-related costs. These risks can lead to
plant closures, supply-chain disruptions, and public opposition
to local business activities.
That's the message of a new research paper by the Pacific
Institute, a leading nonpartisan research institute based
in Oakland, Calif. The report identifies a range of worrisome
trends that impact businesses in almost every sector, and
recommends steps that companies can take to meet these challenges
"Water scarcity and other water-related issues already
pose a serious threat to many businesses around the world,"
said Jason Morrison, Director of the Pacific Institute's
Economic Globalization and the Environment Program, and
lead author of the report. "There are solutions, but
unless companies start taking steps to protect themselves
and protect water resources, they could find their operations
The study, Freshwater Resources: Managing the Risks Facing
the Private Sector, outlines a range of problematic trends:
Growing water scarcity in the face of skyrocketing demand
and increasing competition; community concerns about industrial
water use and pollution; and potential changes in water
availability and quality stemming from climate change. Severe
water shortages can lead to supply chain interruptions,
poor product quality, and even loss of license to operate.
Already, local governments have forced some multinational
companies to close major factories due to concerns about
the impacts of their water use.
"The report makes clear that to be responsible stewards
of shareholder resources, companies must become more responsible
stewards of water resources," explained Steve Lippman,
Senior Social Research Analyst from Trillium Asset Management
"The good news for businesses," continued Arvin
Ganesan, Associate Social Research Analyst from Calvert
Group, Ltd, "is that there are a range of steps they
can take to protect themselves while helping protect these
key resources for the future."
The report recommends ten steps companies can take to reduce
their water-related impacts on the environment and local
communities, and help protect their operations and their
shareholders from business risks related to water. These
steps include measuring their current water use; establishing
a water policy with specific goals and performance targets;
improving water efficiency and conservation efforts; and
engaging suppliers, community groups, and outside partners
in an open dialogue on the issue.
Based in Oakland, California, The Pacific Institute
an independent, nonpartisan think-tank studying issues at
the intersection of development, environment, and security.
Boston-based Trillium Asset Management Corporation (www.trilliuminvest.com)
is the oldest and largest U.S. investment management firm
dedicated solely to socially responsible investing. Two
years ago, Trillium Asset Management filed one of the first
shareholder resolutions raising the issue of the business
risks of water scarcity.
Originally released: August 23, 2004