As agriculture copes with water scarcity, many companies don’t

Major U.S. corporations believe water challenges will significantly worsen over the next five years, affecting their growth and profitability — but the majority have no plans to expand their water risk mitigation measures.

While agriculture faces a water crisis in California and other areas of the U.S. that could imperil production and is already bringing higher prices to consumers, most of corporate America feels its current level of investment in water management is sufficient, according to a report from the Pacific Institute, Bridging Concern and Action: Are U.S. Companies Prepared for Looming Water Challenges?

Companies surveyed were majority Fortune 500, publicly traded, and represented virtually every industry sector. Participants were senior officials who have direct responsibility for water issues.

“Nearly 60 percent of responding companies indicated that water is poised to negatively affect business growth and profitability with five years, and more than 80 percent said it will affect their decision on where to locate facilities,” says Jason Morrison, program director of the Pacific Institute.

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“Water challenges are not just for developing companies — they are happening here in the U.S. While the current California drought gets considerable attention, many other regions face a chronic imbalance between water supply and demand.”

Since most survey respondents had no plans to expand water mitigation measures in the future, Morrison says, “We question whether many companies are adequately prepared for the growing number of water risks and challenges they face.”

There is increasing recognition, the report says that in addition to being a considerable societal problem, water creates specific challenges for businesses — insufficient or contaminated water supply, or a lack of infrastructure to reliably deliver water.

“As more and more corporate boards discuss the impact of social and environmental issues on their profitability and growth, water risk will emerge as central to company strategy,” said Tony Calandro, senior partner and leader of the VOX Corporate Sustainability and Social Responsibility Practice Group.

“This new economic reality necessitates that companies better understand the many ways that water affects their reputation and bottom line, and the multitude of communication and management strategies they may need to adequately address these business challenges.”

Calandro says business leaders surveyed pointed to two significant internal obstacles that hinder a company-wide buy-in of action on water issues: lack of time to raise awareness, and other risks that have a higher, more immediate priority.

One company leader, however, took a different stance. “We’re beginning to see that relatively small capital investments can bring about nearly ten times the amount of savings in annual water and energy costs,” said John Schulz with AT&T.

Read the entire report here:

TAGS: Management
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