Envl Solutions magazine: Global water scarcity poses risk to Canadian supply chains

 

April 18, 2011 – What would happen if water became scarce in a region that Canada depends on for imports? How would Canadian businesses adapt to shortages in the inputs they need to produce goods and services domestically? Do businesses have the tools needed to manage this risk?

These are some of the questions that Canadian businesses need to be asking themselves as the global economy becomes increasingly interconnected and water risk emerges as a prevailing issue.

In a landmark UK study, the Carbon Disclosure Project (CDP) Water Disclosure, 47 per cent of respondents were unable to identify whether their supply chains are subject to water-related risk. For many sectors, supply chains are central to understanding and managing water risk.

“The Study shows us that businesses are not mapping risk by identifying how much water their suppliers use and if those suppliers are operating in water-stressed regions. This knowledge is vital in order to adequately assess business risk,” said Anthony Watanabe, founder of the annual Canadian Water Summit, the country’s first national, multi-disciplinary water conference. “If organizations fail to plan accordingly and acknowledge what we are seeing as a growing business threat, the result could lead to instability and lost economic opportunities.”

The Study warns that increased competition for water in water-stressed areas (particularly the U.S. and Asia) may lead to restrictions and a rise in water prices.  This may affect the availability and cost of Canadian imports that rely on water for production. The majority of Canada’s imports come from the U.S. and China and include machinery, equipment, metals, plastics, chemicals and automotive products, all of which are used to produce goods and provide services domestically.

Canadian companies should be engaging their procurement teams to work with suppliers and assist them with managing water on an ongoing basis. The completion of an annual supply chain water-risk map is also seen as a best practice in an era of increasing global water scarcity.

CDP Water Disclosure will present an analysis of water data from the world’s largest companies at the Canadian Water Summit on June 14. The keynote address will explore water measurement, management, risks and opportunities as they relate to Canadian industries.

The Summit will enable corporations, government and NGOs to build a stronger understanding of the linkages between water and the economy to enhance Canada’s capacity to address water challenges in the 21st Century.

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