We are killing the planet in so many ways! Climate change and global warming have caused a major water crisis. There are two billion people worldwide who do not have access to safe drinking water according
to the UN. Water supply available has been decreasing due to rise of sea-levels, rise in sea temperatures, and the melting of glaciers and icecaps —which leads to less useable freshwater and increase of water pollution.
The rise in temperatures has also led to risks of draughts, floods, and heavy precipitation rates. The
increase in water disasters in the past 50 years serves as proof.
74% of natural disasters between 2001 and 2018 were water-related. The disruption of the global water system brought on by global warming also has disastrous consequences for agriculture, electricity, and food systems, which are under threat if action is
not taken.
Research indicates that by 2045 the world will become predominantly water-scarce instead of what it is now, water-abundant.
Nature-related action from the financial industry is critical, it was
reported earlier this year that the UK’s GDP could fall significantly due to nature degradation.
Where can the financial industry make a difference?
The path to Net Zero is a significant step in the right direction to protect the environment against further damage, however, biodiversity and natural capital are key systems that are being severely impacted by climate change, and the water crisis is one
gear in the big picture of interlocking ecosystems that are not only damaging supply chains, but the livelihoods of people and wildlife all over the world.
According to CDP research from earlier this year, water risk in supply chains could cost $77 billion, with $7 billion under immediate threat. The research indicated that more and more businesses are becoming involved
in water issues and issuing financial incentives to combat the water crisis. The report collected data from over 3000 large companies with an annual revenue of over EUR/USD 250 million.
Dr Patricia Calderon, CDP’s global head of water,
commented: “Supply chains are the knots which tie our global economy together. But they are coming apart rapidly due to climate change and the reckless abandon we treat the world’s finite resources. The data is telling us our water supplies are becoming
ever more fragile and the financial toll is mounting up. It’s down to large companies with the biggest water impacts to take immediate action, working with their suppliers to stem the tide of water risk.”
Water supply chain risks threaten one in five of these large companies, and could cost them significant damage if action is not taken. A concerning 28% of companies surveyed responded that they do not engage with their water supply chain and are not planning
to within the next two years, despite evidence of the increasing impact of the water crisis on their business.
Henk Ovink, executive director of the Global Commission on the Economics of Water, stated: “We need a paradigm shift in the way our economic metrics, and the politics behind them, value and govern water. Mitigating climate change while adapting for the ever
more extreme impacts, ensuring a just energy transition and securing food for all, restoring our ecosystems, reversing biodiversity loss and building inclusive, green and resilient systems. The key to make all this happen is to view water as a global common
good.”
Research from the CDP indicates that there are businesses on the forefront that are looking at all aspects of their supply chain and assessing what they can do to protect natural capital and finance climate crisis mitigation when it comes to water and deforestation.
However, biodiversity is still not a priority for many major companies that do contribute significantly to damaging the environment. Collective action and government policy is needed to drive action.