Strategic Focus: Industrial Water Risk Criticality

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Executive Summary

Over the past decade, the criticality of water for industrial operations has become increasingly apparent, as climate change, ESG reporting and public perception have altered historical norms. The role of water as a key component for almost every industry – either directly in production, or along the value chain – is elevating it within risk functions as a direct concern. An enhanced perception of the significance of water is driving an evolution in how firms view water risk and manage their water usage, and is spurring greater investment in novel solutions that can transform water management. As climate change continues to influence water scarcity and alter precipitation patterns, risk functions will be forced to apply the same level of concern to water as is currently directed towards carbon. 
Water management has transformed from a box-checking exercise to a critical component of enterprise risk
The focus on water management is shifting away from pure compliance
Climate change and ESG risks are driving concerns
No industry sector is safe, but some are at higher risk than others
Innovation and funding are driving solution generation and creativity, to tackle looming water risk
Figure 1. 2021 combined energy and power generation water withdrawal (billion cubic metres)
Figure 2. 2015 water withdrawal and usage by category (billion litres per day)

About the Authors

Nathan Goldstein

Nathan Goldstein

Senior Analyst

Nathan is a Senior Analyst in the Verdantix EHSQ practice out of the New York office. His current research agenda focuses on the intersection of sustainability and ESG trends …

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Bill Pennington

Bill Pennington

VP Research, EHS & Risk Management

Bill is the VP Research for the Verdantix EHS & Risk Management practices. His current agenda focuses on understanding the evolution of EHS and enterprise risk management,…

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