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School of Geography

John Hughes John Hughes

Contact details


School of Geography
University of Leeds
University Road
Leeds LS2 9JT   UK

Email:
gyjhu

Telephone:
tbc

Project title

Incorporating Water Scarcity Risks into Business Decision-Making

Project overview

At this year’s World Economic Forum a survey of over a thousand experts from industry, government and academia rated water number one biggest risk to society in terms of impact for the short term. The water supply crisis is also beginning to make its way up the agenda in many company boardrooms across the world, with the Financial Times reporting that in the past three years multi-national firms have committed over $84bn to address how they obtain, manage and conserve water. As the global economy recovers from the 2008 financial crisis, many CEOs and investors are now acknowledging the impact an environmental crisis would have on company profits and growth expectations. In 2013, the CDP reported in their annual Global Water Report that 70% of the 530 respondents identified water as a substantial business risk, either directly in their operations or indirectly via their global supply chain.

Water scarcity is an issue of today, not just the future. While climate change will surely become an important driver of water scarcity in a few decades time (and to a lesser degree climate change impacts are already observed in some arid/semi-arid areas), the majority of companies focus their strategic decision-making on immediate (next year) and short-term (5-10 years) time scales. As pressure on water supplies increases across the globe, partly driven by an increasing domestic demand of a growing population, growing operational, reputational and regulatory water risk will impact businesses. Managing these risks at the regional and/or company level requires tools to screen both direct and indirect water footprint and water risk across geographical regions, down multiple tiers of supply chains, and across industry/household consumptions, both now and into the future.

Aims/objectives

The aim of this project is to develop and demonstrate an approach capable of incorporating water scarcity risk assessment within a framework useful for economic decision making at the regional, national and company level. An initial list of research questions we will pursue is:

  1. Using the disclosures included in the 2014 CDP Global Water Risk survey, carry out an analysis of what companies are reporting on their water risks and compare to predictions made with WaterGAP
  2. How are companies assessing their global operational water footprint? And are they relating this water footprint assessment to water scarcity risk when formulating key business strategies?
  3. Using past trends in domestic, industrial and energy water use, are some sectors/regions more likely to experience stalled growth compared to the overall economy when projecting 5-10 years into the future under multiple scenarios?
  4. Assuming that a sector/region has maximum controllability over its supply chain, how much can that sector/region reduce its water risk?

Funding

ESRC White Rose DTC and Ove Arup & Partners

Conferences/training courses attended

2015 Understanding and Communicating Environmental Risk and Uncertainty. Cranfield University

2014 Understanding Uncertainty in Environmental Modelling. London School of Economics