Frequently, business continuity planning includes water risk assessment, not only in a crisis. Major water risk can be divided into four categories: too much, not enough, too polluted, and disruption of freshwater systems. Lack of access to water supply, and sanitation are also considered.
A water risk assessment (WRA) identifies and evaluates the enterprise’s exposure to water-related risk. It serves as a basis for managing water risk in the enterprise and in the supply chain. These go beyond the immediate natural hazard risk. At an operational level, water risk assessment evaluates water quantity and quantity, and the related risks, including:
- Climate change consequences (rain, storms, lack of or low precipitation)
- Impacts on ecosystems (freshwater and fish)
- Water legislation and regulation (environmental laws)
- Water rights or conflict (drinking or industrial use)
Most enterprises that are highly dependent on water regularly assess water risk. Agriculture and power generation account for 90% of direct water withdrawals. Textiles and paper are also thirsty industries. Yet all types of businesses benefit from developing water risk management strategies. Such strategies protect their operations and supply chains from water scarcity or water stress.
International laws, such as the UN Global Compact CEO Water Mandate also drive enterprises to initiate water stewardship initiatives across supply chains. Water stewardship involves practices and policies to ensure sustainable use of freshwater resources.