Among the industries most at risk, the report found, are high-technology companies, especially those using huge quantities of water to manufacture silicon chips; electricity suppliers that use vast amounts of water for cooling; and agriculture, which uses 70% of global freshwater. Other high-risk sectors are beverages, clothing, biotechnology and pharmaceuticals, forest products, and metals and mining.
“Water is one of our most critical resources – even more important than oil,” the report noted. “The impact of water scarcity and declining water on businesses will be far-reaching. We’ve already seen decreases in companies’ water allotments, more stringent regulations [and] higher costs for water.”
Droughts “attributable in significant part to climate change” are causing “acute water shortages” around the world, the study said, and pressure on water supplies will increase with further global warming and a growing world population. “It is increasingly clear that the era of cheap and easy access to water is ending, posing a potentially greater threat to businesses than the loss of any other natural resource, including fossil-fuel resources. This is because there are various alternatives for oil, but for many industrial processes, and for human survival itself, there is no substitute for water.”
CERES’ president, Mindy Lubber, and Peter Gleick, president of the Pacific Institute, urged more companies and investors to plan for future shortages and price increases. Few, they said, were thinking strategically “about the profound business risks that will exist in a world where climate change is likely to exacerbate already diminishing water supplies”.
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