Businesses concerned by water use

By Roger Harrabin
Environment Analyst, BBC News

image captionSome 60% of firms have already set performance targets on the way they use water

Future water shortages are a growing concern for business, according to a global survey published today.

The research shows that more than half of the 147 firms responding expect problems with water in the next 1-5 years.

It says 60% of firms have already set performance targets on the way they use water.

The report predicts that the issue will get much worse as the world demand for water is projected to soar over the next few decades.

The UK's chief scientist John Beddington has warned that water scarcity will form part of a perfect storm of environmental problems.

And today's report from consultants ERM was requested by institutional investors who want to know how much risk their investments face from water problems.

It shows that 39% of the firms are already suffering from water related issues - including disruption from drought or flooding, declining water quality, and increases in water prices.

Sectors reporting the greatest exposure to water risks include food, drinks & tobacco and metals & mining.

Firms are increasingly recognising the risk to their brand if they are seen to be wasteful with water in countries where it is in short supply.

The growing demand for companies to measure their performance mirrors the existing trend for firms to measure their output of greenhouse gases. The ERM report says if firms measure their use of a commodity they tend to draw up policies over the use of that commodity.

But it says water differs from carbon in the sense that there are often alternatives to fossil fuels but there are no alternatives to water.

The challenge lies in managing what we have among competing users, whether they are firms, communities or natural systems.

The research was organised by the Carbon Disclosure Project, which does research on behalf of 137 institutional investors representing US$16 trillion of holdings.

Jacqueline McGlade, director of the European Environment Agency, welcomed the disclosure initiative. "Climate change is altering global water availability, meaning greater scarcity in some regions and more flooding in others. We must adapt our infrastructure and our consumption," she said.