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The water crisis: the new business unusual

The World Economic Forum (WEF) identified the Global Water Crisis as the top risk facing humanity for the next decade. Are South African businesses doing enough to future-proof themselves?

South Africa is in the midst of a water crisis, with water restrictions in place across the country.  The past months have seen the country nervously watch dam levels as they teeter on critical levels.  Gauteng experienced a near miss at in the last months of 2016, with the Vaal system only being saved from collapse by last minute water transfers.  The Western Cape is now also watching its lifeblood – the Theewaterskloof Dam- shrivel day by day. 

This is a tangible lesson of long known truth: our ability to sustain our societies and economies relies on the availability of water.  Yet our historical response has never matched the severity of running dry.   There are a number of reasons for this, not least that water in South Africa has been too cheap.  It seems that because we’ve been spoilt, we have an innate assumption that water will be on demand at a given quality, quantity, and price.  This assumption simply no longer holds. 

These concerns are echoed globally, with the World Economic Forum (WEF) identifying the Global Water Crisis as top risk facing humanity for the next decade in 2016.  There is now a stark realisation that in order to meet our human needs – let alone economic growth aspirations – we need a lot more water than is available.   Furthermore, shortages and compromised quality of water will exacerbate all other major risks, such as unemployment, food security, poverty, inequality, and energy shortages. These risks can, therefore, exasperate each other’s effects, making their consequences difficult to predict and navigate.

South Africa faces a number of added challenges.  Climate change will make the country drier.   Add to this the crumbling state of infrastructure, a lack of financial resources, deteriorating water quality, skills shortages and lack of political will to authentically address these issues, and it becomes clear that it is up to business to future proof themselves.

Understanding water as a business risk, however, is about more than planning for expensive water bills.   Water is embedded in everything we produce and consume – from the simple fruit we eat to the clothes we wear and the technology we use.  Every product, company, and industry, therefore, has a water footprint, which can be understood either as its impact on this resource or as its vulnerability to shocks in supply, quality, or price.   To put this into context the Water Footprint Network has calculated the volume of water it takes, over a product’s entire lifecycle, to produce simple everyday items.  On average:

  • One apple costs 125 litres of water
  • A pair of jeans costs 11 litres of water
  • A 250ml glass of beer (from barley) costs 74 litres of water
  • A kilogram of beef costs 15415 litres
  • A kilogram of chocolate costs 17196 litres

What these figures suggest is that the quality, availability, and price of water can shift entire industries, affect their global competitiveness, and disrupt supply chains. For the most part, however, South African companies are generally not applying sufficient resources to understanding the risks associated with this reality.   In this context, business leaders – through regulatory, investor, and consumer channels – are being called on to develop informed and engaged response strategies to the risks that they both impact on and are impacted by.

There are a number of tools or strategies that companies can use to start this process, but almost all will start with getting accurate data.  Companies should be able to answer questions such as how and where they use water, what the external physical or institutional risks are in the areas they do business, and where changes in water quality, availability, or price would most materially affect the business.   Through initiatives like CDP Water, through which companies disclose and reduce their water-related risks, investors are starting to factor this sort of information into their investment decision making.

Organisations and companies who wish to learn more about how they can reduce their water consumption can contact GCX at or call 021 702 4058

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