We all need clean water to drink, cook, and bathe. But water, or a lack thereof, continues to make headlines across the United States. With Lake Mead drying up and boil water advisories in Mississippi, many households are keeping an eye on the finite resource.
Organizations need water, too, for operations like heating, cooling, manufacturing, production, and irrigation. Without it, buildings cannot be kept safe and comfortable, industrial processes cannot function, and universities cannot provide a productive working environment for students and staff.
Water risk is the chance that droughts, floods, and aging infrastructure make water more expensive or unavailable for normal use. This can seriously disrupt a commercial operation, so it is critical that organizational leaders understand water risk and how to mitigate it.
Here, we explore the drivers of water risk and why a sustainable water management strategy helps organizations safeguard their operations.
Water Risk is Increasing – Here’s Why
In July 2022, The Hill reported that 40 out of 50 U.S. states were experiencing a drought. A month later, The Guardian called it “the summer of floods,” reporting on back-to-back “1000 year” floods in California, Kentucky, and Missouri. The two headlines illustrate America’s new reality: droughts and floods are both on the rise, with costly consequences.
How costly? The frequency of severe droughts and floods that cause over one billion dollars of damages to property, infrastructure, and business operations in the U.S. have increased over the last several decades.
Data source: www.ncei.noaa.gov
Either crisis can disrupt your organization’s water supply. Droughts make water less available for human use. And while it may seem counterintuitive, floods often reduce clean water supply by causing cross-contamination and disrupting pipe access or flow. In either scenario, a water utility may be forced to curtail water use or raise water and sewer rates.
America’s water infrastructure system received a C- on the 2021 American Society of Civil Engineer’s Infrastructure Report Card. Aging infrastructure means more water main breaks, which can restrict commercial operations, and poor water quality, which can require that businesses invest in their own water treatment equipment.
Water touches millions of dollars’ worth of capital equipment at the average commercial facility, so these disruptions can be very costly. CDP, the non-profit global disclosure system for investors, companies, and governments to manage environmental impact, estimates that loss of water puts $301 billion at risk in their reporting audience alone.
Relying solely on municipal water infrastructure can therefore be a risky bet.
Water & Sewer Cost Volatility
Utilities are increasing water rates so they can address the impacts of climate change and upgrade aging infrastructure. Water and sewer rates across the U.S. are increasing faster than any other utility cost—up 43% in the last decade—with no recourse for consumers.
Furthermore, rate hikes can be unpredictable, and rates can vary greatly from region to region, making water utility costs more difficult for businesses to plan for.
An organization’s reputation can be affected by how and when it uses water. Shareholders consider a company’s water use when evaluating its sustainability performance. Environmental advocates often publicly criticize organizations that, in their view, irresponsibly use water in water-stressed regions.
CDP encourages organizations to report on water resiliency in addition to forestry and climate. According to CDP, almost 600 investors with over $110 trillion in assets are requesting that companies disclose on water security impacts, risks, and actions.
Combatting Water Risks
Whether an organization is motivated by operational risks, rising water and sewer costs, or sustainability aspirations, it should consider water as a critical part of resiliency planning.
But incremental improvements, like low-flow fixtures and “save water” campaigns, are likely not enough. Institutions and corporations should take a closer look at their water inputs, uses, and strategies and consider transformational water resiliency solutions, such as onsite systems that capture, treat, and reuse wastewater or storm water.
If implemented appropriately, facilities that pursue water resiliency solutions can expect to achieve:
• 30-60% reduction in potable water use
• 50-100% reduction in waste or storm water discharged
• 50-100% utility water redundancy
• Cost savings
• Fulfilled sustainability targets
Ultimately, this means being less dependent on a local utility and becoming a more self-sufficient, resilient water user.