A new 6-page briefing paper from EDGE, “Water & Business: What Every MBA Needs to Know”, summarizes the key issues for managers and investors, including both business risks and opportunities. “Water is an essential input to many businesses’ products and supply chains–from the water needed for agricultural production of raw materials (food products and textile crops) to the water needed for cleaning and cooling processes in industrial production cycles,” says EDGE managing director Katie Kross.
Water is a fundamental input to the global economy, and a critical component of corporate supply chains, infrastructure, products, and operations. By 2030, demand for water is expected to exceed supply by as much as 40% (more in some regions), creating water stress on both businesses and communities. Businesses may come in direct tension with communities over water use rights. Droughts or flooding may affect agricultural production or interrupt manufacturing or transportation operations. Water infrastructure will be needed to accommodate demand growth and existing infrastructure will need to be made more resilient to extreme weather events.
MBAs should understand water as a pressing challenge in coming decades, with complex connections to food and energy production, climate change, and other issues. There are growing water-related risks for businesses—including financial, reputational, and operational risks. As water stresses increase, businesses may be held more accountable for their water use and stewardship efforts. These conditions create market opportunities for companies offering innovations in water supply and treatment technologies, agricultural technologies, “watersmart” products, and infrastructure finance.