Water scarcity as business risk

1
Water scarcity as business risk

• Introduction water scarcity (Charles Iceland)
• Current and future WRI work on water (Charles)
• Water scarcity as business risk (Piet Klop)
• Discussion

2
(No Transcript)
3
Regulatory responses

• Water rights
• Water metering pricing
• Stricter quality standards enforcement
• More investment trading

4
Sectoral impacts differ

• Water consuming
• Water polluting
• Water dependent

5
Value chain Impact Supply chain Production process Product use
Physical
Regulatory ( litigation)
Reputation
6
(No Transcript)
7
Water, power and climate change
power

• 40 of total US water withdrawals
• Cooling water discharge restrictions
• Plant closures in South-East
• Perfect storm France 2003
• Water demands of biofuels, tar sands, CCS
• Power demands of water treatment, desalinisation

Distribution, treatment, desalinisation
Hydro, cooling
CO2
Demand
water
climate
Snowpack, drought, demand
8
Financial implications

1. Disruption of supply chain or production process
2. Higher costs of securing, saving and treating
   (waste)water
3. Delayed or suppressed growth due to increasing
   competition for water

9
From footprint to exposure

1. Overall water stress
2. Acute shortages
3. Long-term sustainability value-price, price-cost
   differentials
4. Equity community access, disputes
5. Security of water rights
6. Compliance
7. Pollution spills

1. Restrictions on siting, growth, business
   decisions
2. Investments in efficiency
3. Ability to pass on increased costs

10
Main message

• Real issue but poor disclosure
• Exposure gt footprint
• Exposure gt water sector
• Exposure gt onsite production
• Focus on food beverage, power, manufacturing

11
Investment opportunities

• Water sector itself infrastructure, metering
• Reducing footprint water efficiencies,
  intensities
• Reducing exposure sourcing, siting, process
  alternatives
• Innovation water markets, watershed services

12
WRI work to be done

• More relevant, region sector-specific
  disclosure
• Water wedges / marginal cost of water savings
• Water protocol

Gov. Purdue (GA) praying up a storm
13
For more, contact

• Piet Klop
• World Resources Institute
• pklop_at_wri.org
• [phone]