Although the UK gets plentiful rainfall, around two-thirds of the water it indirectly consumes comes embedded in imported food, clothes and industrial goods, according to estimates.
The new WWF study says 80% of all UK imports by value face at least a moderate level of water risk, while 40% come from countries that have ‘hot spots’ of severe water scarcity or pollution.
The reputational and regulatory water risks for businesses operating in China are particularly high, argues the report. These arise from new laws aimed at cleaning up China’s water supply, increasing scrutiny of water issues in the country, both domestically and internationally, and lack of coordinated planning within river basins.
Textiles in China singled out
WWF has singled out the textile sector as particularly vulnerable to these risks, although a range of industries, including beverages, food and pharmaceuticals, are also implicated in wasteful or polluting use of water.
China is the main supplier of clothing to the UK, along with India, Pakistan and Bangladesh.
Companies that rely heavily on clothing from the Yellow River area of Shandong province and the Yangtze river basin – both centres for clothing production – face increasing challenges because of water scarcity or pollution.
The toxic pollution caused by supply chains used by top clothing brands has been well documented. Chinese NGO campaigns have galvanised brands such as H&M and Gap to root out the worst polluters among their suppliers, but others such as luxury brands such as Dolce & Gabbana continue to dig their heels.
In China WWF has been working in the Taihu basin, part of the Yangtze river system, with industry and NGOs since 2012 to improve water quality at an industrial park. The local Jiangsu government has now agreed to expand this approach, says the WWF team who wrote the report.
China’s tough new water regulations should also make companies sit up and re-examine their supply chains more closely. The government’s much-anticipated “Ten point water plan” to combat water pollution unveiled last month also singled out textiles, along with dyeing and finishing, pulp and paper industries.
On top of the impending wastewater tariff hikes, factories will also have to treat wastewater to higher standards or face high fines under the amended environmental law. Polluters could also go to jail for offences and smaller factories with thin profit margins will likely be forced to close or merge with others.
Whether authorities can enforce the new regulations is another question.