How to do business in a world running out of water

If there’s any doubt that water crises loom over the globe, consider these news headlines from a mere 10 days in January: from Brazil, “Sao Paulo state faces worst water crisis in its history”; from Nigeria, where 73,000 deaths were tied to water scarcity, “Water shortage deadly”; from Ireland, “Thousands more to take to the streets over water.”

Protests and riots over water also dominated headlines from Parbatipur and Maheswaram, India, where residents “had no drinking water for two weeks.” Meanwhile, newspapers in Winnipeg, Canada, warned residents to boil water before drinking it. Those in Flint, Mich., were just plain told not to drink tap water. And a water dispute in parched California had to go to the U.S. Supreme Court to be resolved.

In this context of ever-rising tension over rights and access to clean water, the United Nations Global Compact and the Pacific Institute have issued a Guidance for Companies on Respecting the Human Rights to Water and Sanitation (PDF). The key takeaway for businesses is that water scarcity and resulting human suffering — which can turn into social turmoil reverberating through local economies — don't look likely to recede anytime soon, putting pressure on companies to be on the right side of the equation. They'd be smart to act now to mitigate potential risk.

“We think this is broader than CSR. This is not just philanthropy," Mai-Lan Ha, a lead author of the report and senior research associate at the Pacific Institute, told GreenBiz. "It's insuring that as a business you have enough water for operations but also ensuring that the community where you're doing business also has access to water," which alleviates risk. Companies are grasping the compelling business case for water stewardship, she said. "It is core to makng sure a business is successful in the future."

Indeed, business leaders gathered last month at the World Economic Forum — not to mention recent U.S. intelligence reports (PDF) — cite water crises as likely to have significant impacts on global security and economic activity in the years ahead. The U.S. Office of the Director of National Intelligence predicts that the next 10 years will usher in a convergence of environmental and social fallout linked to water issues, as many countries will experience "shortages, poor water quality, or floods — that will risk instability and state failure."

That means that gone are the days of cheap water when companies could use massive volumes for operations without concern about whether there's also enough water for local communities or host countries.

The rising number of water shortages, contaminations, floods and human dislocation and suffering resulting from water problems are not expected to abate. That means there's risk both in water availability and stability of communities.

None of this is particularly new news to the U.N., however. Work on drafting the guidance began back to 2010, when the U.N. General Assembly voted to recognize a Human Right to Water and Sanitation (and was then included in the U.N. Guiding Principles on Business and Human Rights in 2011). Large multinational water users — Coca-Cola, PepsiCo International, Nestle and about 120 others — also helped draft the report. The Pacific Institute and Shift drafted the specific language and implementation steps to help businesses.