In 2023, the Brewers Association published its Water Risk Assessment Tool and the title of the associated webinar, “Water: The Ultimate Supply Chain Challenge,” perfectly encapsulates the importance of addressing water-related risks faced by breweries. According to Quartz, the most vulnerable industries for water stress-related risks include the beverage and food industry along with the apparel, tech, and energy industries, but all are susceptible.
Water stress, and the risk of drought, is a growing concern for companies that engage with suppliers located in areas that are prone to such conditions. The World Economic Forum reports, “water is vital to global trade, with 90% of products moving around the world via oceans and waterways but recent summers have seen severe droughts render several international trade routes unpassable.” They cite four key rivers where parts have been affected by drought: Rio Negro (one of the Amazon’s largest tributaries), Rhine River, Mississippi River, and the Yangtze River Basin.
The much cited March 2024 CDP report, “Stewardship at the Source: Driving Water Action Across Supply Chains,” informs “1 in 5 companies are facing supply chain risks which could have a substantive financial or strategic impact on their business. These risks were estimated to total US$77 billion across 623 responding companies.”
There are several open access resources that identify and map water stress risk-related ares, in addition to a few that have assessment and mitigation capabilities. Here is a list of selected list of resources and indices for consideration for use.
Global
World Resources Institute (WRI)’s Aqueduct – This global data platform allows for companies and governments to identify and respond to water risks, such as floods, droughts and stress. There are four aqueduct tools: The Aqueduct Water Risk Atlas assesses exposure to risk across multiple locations, Aqueduct Food identifies water risks to agriculture and food security, Aqueduct Floods identifies coastal and riverine flood risks, and Country Profile and Rankings compares national and sub-national water risks. WRI partners with many large organizations.
WWF (World Wide Fund for Nature) Water Risk Filter – This resource allows companies to assess water-related risks to strengthen resilience. The Explore section of the filter contains maps that show different water risks at different geographical scales and how water risks will evolve by 2030 and 2050, in addition to country profiles that compare future water risks and those currently being faced under different scenarios. The Assess section allows companies to assess water risks across their operations, supply chain and investments, and the Respond section is coming soon, which allows for mitigation. A Biodiversity Risk Filter is also offered.
Ecolab Smart Water Navigator – Recently, Ecolab’s Water Risk Monetizer and Smart Water Navigator were merged into one tool, also now called Smart Water Navigator. This tool uses a four-step process that includes “identifying water-related business risks, setting water withdrawal targets, implementing practical projects to advance corporate water targets and tracking performance over time.” The tool is developed in collaboration with S&P Global Sustainable1.
National
The National Risk Index – This Index, built by FEMA in collaboration with partners, identifies communities in the U.S. that are most at risk for 18 natural hazards. Of the 18 hazards, water-related risks include Drought, Coastal Flooding, Riverine Flooding, and Tsunamis. When looking up drought hazard scores for Salinas CA, known for its agriculture industry, the drought index (agricultural impacts) score is 99.6 (very high); social vulnerability (susceptibility to adverse impacts) score is 84.5, and the community resilience score is 28.9 (low). Expected annual loss based on the drought index is $18M.
National Weather Service Climate Prediction Center – The Center offers the Palmer Drought Severity Index, and Crop Moisture Index, which are indices of the relative dryness or wetness affecting water sensitive economies. The data is provided for the contiguous United States. The Standardized Precipitation Index includes U.S. and Global monitoring data and seasonal prediction maps.
U.S. Drought Monitor – The U.S. Drought Monitor (USDM) is produced by the National Drought Mitigation Center at the University of Nebraska-Lincoln, the USDA, and the National Oceanic and Atmospheric Administration. The USDM map is released every Thursday and shows where drought is and how bad it is across the U.S. and its territories. The monthly North American Drought Monitor shows drought conditions across the entire continent. Draught summaries provide more detailed information.
National Water and Climate Center (NWCC) – The NWCC, part of the USDA’s Natural Resources Conservation Service, administers the Snow Survey and Water Supply Forecasting Program (SSWSF), the Soil Climate Analysis Network, and manages the Water and Climate Information System.
Note there are subscription-based offerings as well, such as Waterplan and Maplecroft Water Stress Index. Waterplan was established in 2021 and offers an AI-powered water platform for companies to measure, report, and respond to water risk to ensure water security. Maplecroft Water Stress index allows users to assess water stress in a particular business location and view where operations are most at risk.
Image by Manfred Richter from Pixabay.
