Many of us take access to fresh water for granted. It’s on tap. It’s recyclable. Readily available supplies mean it’s not something we have to worry about.
Yet, as CDP’s Miriam Denis Le Seve and Sonya Bhonsle told Procurement Leaders members during a recent Risk and Sustainability Cohort Call, four billion people experience severe water scarcity for at least one month each year.
The impacts are far-reaching: CDP research estimates the current cost of water-related risks to be as high as $77bn. Furthermore, by 2050, up to 30% of global GDP will be exposed to high water stress. While that may seem a long way off, the headlines show this risk is already beginning to materialise.
Heavy rain in the Rhine disrupting cargo ships, drought causing congestion in the Panama canal, water shortages slowing the production of semiconductors – all of these incidents have been a consequence of water scarcity. The delays and costs they’ve inflicted on businesses are real.
What’s more, research indicates supply chains for certain goods are exacerbating the problem.
Miriam explained to members that around half of rich nations’ water footprint – that is, the total amount of water consumed and/or polluted in producing the goods and services we purchase – originates from areas facing extreme water insecurity. She gave the example of one kilogram of bananas, which requires 800 litres of water to produce. When the bananas are exported, the water in effect leaves those areas and heads to the global north.
Yet despite the impact of supply chains on water scarcity, just 5,000 businesses report on this issue via CDP. Fewer businesses still are engaging their suppliers – even though those that do are seven times more likely to report risks. Not taking action means you can’t identify potential risks, nor can you take action to avoid or mitigate any potential impacts.
Miriam and Sonya explained the steps CPOs can take to ensure their businesses – and their suppliers – become more responsible water stewards. And it probably won’t surprise you to learn that these, in many ways, resemble the actions the majority of functions are already taking to calculate, report on and reduce supply chain carbon emissions: identify the risks, set targets, incentivise staff to act, then start to engage with and incentivise your suppliers to report on their usage and build plans to reduce it.
Although the window to act is closing quickly, CPOs are uniquely placed to take action. As you build your plans for the coming year, don’t overlook the potential impact of water risks – nor your power to help deliver change.
I&D Impact Awards: entries now open
Entries are now open for the I&D Impact Awards 2025, which recognise exceptional achievements in Diversity, Equity and Inclusion. With many procurement teams working to develop outstanding supplier diversity schemes that help create a more inclusive and equitable world, the awards are an important opportunity to celebrate the power businesses have to make a difference.
Visit the website to discover more and enter.
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