Insights from India: This WBCSD Free Tool Can Help Your Business Identify Water-related Risks
India is one of the countries suffering the most from water challenges. As water becomes a more valuable and scarce resource for organizations, a group of leading companies, research organizations and industry associations – including the WRI and coordinated by the WBCSD have developed the Indian Water Tool to help organizations identify water stress related areas in their business location and measure and map water risk in India.
Water is the source of life and, as such, it forms an essential part of running the global economy. As water increasingly becomes a scarcer and more valuable commodity, and its quality and supply decreases, businesses face increasing competition and costs to get access to it, as well as the threat of increasing operational and supply chain disruptions. In India, a country home to 16 percent of the world’s population, but only 4 percent of water resources as its disposal, effective and sustainable management of water is of crucial importance.
The Water Crisis in India
India increasingly faces an upcoming wave of water challenges as it moves forward on the 21st century. I In the past 50 years the country’s rapid population growth, coupled with mass industrialization, expanding agriculture, urbanization, changing lifestyles and projected rapid economic development has resulted in competing demands for water resources and environmental impacts.. According to the 2030 Water Resources Group, a cross-sector partnership hosted by the World Bank Group to close the gap between water demand and supply by the year 2030, India’s demand for water is on path to outstrip supply by 50% by 2030.
Moreover climate change also poses a severe threat, as India has always been dependent on natural hydrological sourcing of freshwater through rainfall. The resulting impacts from climate change such as changes in rainfall patterns, increase in frequency and severity of extreme weather events and climate disasters such as droughts, floods will jeopardize water supply and its security, making it more difficult and expensive to access.
As these water challenges aggravate, 600 million people (roughly half of India’s population) are threatened with high to extreme water stress risks, and if business-as-usual continues many more hundreds of millions will be exposed to water stress risks and there will be a 6% loss in the country’s GDP by 2050 according. Thus, there is an in imminent need to deepen the understanding of water risks before putting in place interventions that can make the water use efficient and sustainable.
Picture 1: Extremely high stress areas are located in Northwest India, while lower stress areas are located in East India and North India.
Water is a financially material issue for business
Leading businesses are increasingly understanding and recognizing the different types of water-related risks (including physical, regulatory and reputational), their potential impacts to business and how the true value of water is not adequately reflected in its market price.
A 2014 survey made by CDP and KPMG of 29 leading Indian companies, indicates that 55 percent of respondents consider themselves exposed to water related risks, moreover 31 percent reported that they have operations in water-stressed regions.
Picture 2: Water related risks reported by Indian companies.
The significance and increasing presence of these risks has resulted in different stakeholder groups such as investors, government agencies and civil society organizations calling for greater transparency of corporate water management and data. Investors, for example, are holding now companies accountable for better ESG management practices, as they can be exposed to potentially significant risks if a company lacks proper management structures to detect and control risk exposure across its operations and value chain.
Better water risk management, better business resilience
One of the greatest challenges for business to make informed decisions regarding efficient and sustainable water management lies in the lack of context and comparability of water data.
As stakeholder expectations and pressure increases companies that manage water well will have the opportunity to contribute to sustainable water management solutions at scale, as well as ensuring long-term business resilience and drive internal business innovation and cost-reduction opportunities.
As part of industry's response to these growing water risks, a working group comprising of 14 partner organizations (incl. companies like Ambuja Cement, BASF, Mahindra, Monsanto, PesiCo and Nestle) and coordinated by the World Business Council for Sustainable Development (WBCSD) developed the India Water Tool.
The India Water Tool is an easy-to-use and publicly available online tool for companies and other users to evaluate India’s water risks and prioritize actions toward sustainable water management.
The India Water Tool is the first national customization of WBCSD's Global Water Tool. Since its launch in 2007 the Global Water Tool has been updated 2 times and has been used by more than 300 companies. Its widespread applicability has enabled companies from diverse sectors – from mining to consumer goods – to find value in its utilization, by developing the India Water Tool as a free for all industry in India. The companies involved have indicate that business can successfully amalgamate around water issues. And also water can be well managed if stakeholders from across sectors continue to show leadership and take responsibilities together, take action, and if water data is well-collected, maintained and publically available, so the launch of the India Water Tool will be an opportunity for others to step forward and support collaboration, whether at national, watershed or plant level.
Companies and users who have the following questions, might find the India Water Tool as a solution for their water management issues.
How many of my sites are in over-exploited or critical areas?
Is my site in an area where the groundwater level is rising or declining?
What have been are the pre and pos-monsoon ground water levels in my area in the last 8 years?
Which of my sites are in areas where the concentration of inorganic contaminants (fluoride, chloride, nitrate, iron, electric conductivity, arsenic) in ground water is above permissible limits for drinking water?
What is the net groundwater availability and projected demand for groundwater in the areas where my sites are located?
What is the total annual rainfall at my sites?
What is the annual availability of surface water in the basin in which my site is located?
How many of my sites are in high risk areas as estimated by water stress indicators?
The India Water Tool uses government groundwater data for the whole of India with segmented and presented. It also adds value to individual company tools on water management by taking them through an initial step to understand and communicate their water risks to enabling them to take mitigating measures, improving their water use efficiencies wherever is the water availability issues raises, across their sites. In addition to understanding potential water availability and quality risks across their official sites using the India Water Tool is first and essential step of a corporate water management strategy.
The tool generates a water inventory containing water risk and indicators. It creates key water reporting indicators that can be used to directly report to different corporate disclosure initiatives (like GRI, CDP Water, DJSI, Bloomberg and UN CEO Water Mandate).
As global organizations like the International Monetary Fund (IMF) and the World Bank Group forecast India to become one of the fastest growing economies in the upcoming years. Risk management tools like the Indian Water Tool can help organizations to navigate in the complexity of these forecoming water challenges.
Picture credit to: Mitchell Ng Liang an
World Resources Institute (WRI) – India Water Tool
100 million Indians live in areas with poor water quality
India Water Tool WRI
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