Impending water shortages spell unforeseen financial losses

Environmental Science & Technology: As the climate continues to change, water shortages will hit all industries hard, warns a new report from the nonprofit water research group Pacific Institute. Commissioned by Ceres, an investor network group, and published at the end of February, the report also tells businesses—and their customers and investors—what to measure to prepare for the inevitable droughts, shortages, and polluted water resources.

Although many of these impacts have been forecast in the past decade, Pacific Institute reports that most businesses are not thinking about looming water problems. Using information from 120 companies in eight industrial sectors covering food, clothing, pharmaceuticals, mining, energy, and more, the authors used a risk framework to calculate the industries’ “water footprints”.

Some companies that sell water-based products already have run up against barriers, the authors report. For example, beverage and food companies Coca-Cola and Nestlé have had trouble situating their facilities in places like drought-stricken California. Silicon computer chip makers also have suffered: one estimate suggests that the shutdown of one plant because of a lack of clean water could amount to losses of up to $200 million per quarter.

So far, water use for energy has trumped water conservation and protection, the report’s authors say. This is especially true in such regions as the Athabasca oil sands in Canada, where water is used for excavating an energy source (crude oil) and then returned to the environment contaminated with drilling oils and other waste….

Dry Falls in Washington State, shot by Ikiwaner, Wikimedia Commons, under the terms of the GNU Free Documentation License, Version 1.2