Water Risk Assessment: Safeguarding Business Resilience and Sustainability

In an era where water scarcity and climate change are reshaping global business landscapes, companies can no longer afford to take water for granted. From manufacturing facilities to agricultural supply chains, understanding your water risk is not just about compliance—it's about long-term business resilience. This comprehensive guide explores what you need to know to keep your operations sustainable and competitive.

This article introduces the strategic significance of water risk assessment, the regulatory frameworks driving corporate water stewardship, and provides actionable insights to help businesses make informed decisions in mitigating water-related risks. Whether you're just beginning to explore water risk management or seeking to enhance your current strategies, this guide is tailored to support your business in navigating water challenges effectively.

The Strategic Significance of Water Risk Assessment {#strategic-significance}

Water risk assessment has evolved from a peripheral environmental concern to a core component of corporate risk management. With increasing concerns about water scarcity, pollution and climate change, businesses face growing pressure to address water-related risks comprehensively across their operations and value chain.

Why Water Risk Assessment Matters for Companies

Water risk assessment enables businesses to identify and evaluate potential threats related to water availability, water quality and regulatory compliance. By conducting comprehensive assessments, companies can proactively address water-related risks and minimise potential impacts on business operations. Understanding water risk is essential for:

Strategic planning: Identifying high-risk locations for facility expansion or supply chain vulnerabilities
Financial resilience: Quantifying potential costs from water scarcity, flooding or regulatory changes
Stakeholder engagement: Demonstrating water stewardship to investors, customers and local communities
Competitive advantage: Positioning sustainability as a core business value

For broader context on climate-related risks, explore my article on navigating climate risk.

Three Pillars of Water-Related Risks

Water risk manifests across three interconnected dimensions that companies must assess:

Physical Risk: Water scarcity, baseline water stress, flooding, severe drought and water quality degradation directly affecting business operations. Physical water scarcity in water-stressed regions can disrupt production, increase costs and threaten business continuity.

Regulatory Risk: Increasingly stringent environmental laws, water legislation and compliance requirements that companies must navigate. Regulatory changes often emerge rapidly in response to water crises, creating compliance challenges and potential penalties for non-compliance.

Reputational Risk: Public perception and stakeholder expectations regarding corporate water use, particularly in water-stressed regions or where operations impact local watershed systems. Reputational risk can translate into lost customer trust, investor concerns and reduced market access.

Impact of Water-Related Risks on Business Operations

Water-related risks generate tangible business impacts across multiple dimensions:

Operational disruptions: Water supply interruptions affecting production schedules and facility operations
Cost escalation: Rising water prices, treatment expenses and infrastructure investments
Legal liabilities: Regulatory fines, litigation costs and penalties for non-compliance with water legislation
Reputational damage: Loss of consumer trust, investor confidence and social licence to operate, potentially leading to greenwashing accusations
Supply chain vulnerabilities: Disruptions from suppliers in high-risk locations experiencing water stress or flooding
Financial materiality: Direct impacts on EBITDA, capital expenditure requirements and enterprise value

Understanding these interconnected risks requires systematic water risk assessment across all relevant business units and the broader value chain.

Water Risk Assessment Under CSRD and ESRS E3 {#csrd-esrs-e3}

The regulatory landscape for corporate water disclosure has fundamentally shifted with the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS). Water risk assessment is no longer voluntary best practice—it's becoming mandatory for many companies.

ESRS E3: Water and Marine Resources

ESRS E3 establishes specific disclosure requirements for companies where water has been identified as material through double materiality assessment. Key reporting obligations include:

Water consumption and withdrawal data: Total volumes by source, differentiating between water-stressed and non-stressed areas
Water discharge information: Quality parameters, treatment processes and receiving water bodies
Water-related impacts: Assessment of impacts on local watersheds, river basin systems and communities
Water risk identification: Physical risk, regulatory risk and reputational risk across operations and value chain
Targets and action plans: Specific, measurable goals for water stewardship with timelines
Scenario analysis: How water availability and water quality may evolve under different climate patterns

For large companies in Germany and across the EU, water-related risks and climate impacts must be explicitly addressed in CSRD reporting from the 2025 reporting year onwards. This extends beyond volume reporting to encompass financial implications, scenario analyses and transition plans. Learn more about CSRD water and climate risk reporting requirements.

Integration with Climate Risk Management

Water risk assessment under CSRD must integrate with broader climate risk assessment frameworks. Companies must demonstrate how water risks intersect with:

Physical climate risks (drought, flooding, changing precipitation patterns)
Transition risks (policy changes, market shifts, technological developments)
Financial planning and capital allocation decisions
Long-term business strategy and resilience planning

This regulatory evolution transforms water risk from an environmental reporting exercise into a strategic business imperative with direct governance and financial disclosure implications.

Key Components of Water Risk Assessment {#key-components}

Conducting effective water risk assessment requires systematic methodology across multiple analytical dimensions. The process builds from foundational data collection through sophisticated scenario modelling.

Essential Steps in Water Risk Assessment

1. Site Water Balance Analysis

Understand water supply sources, consumption patterns and discharge characteristics at each facility. This internal data forms the baseline for identifying specific risks and opportunities.

2. Physical Scope Definition

Evaluate the local watershed, river basin context and broader environmental setting. Water challenges rarely respect facility boundaries—understanding the catchment area is essential.

3. Risk Indicator Mapping

Apply frameworks like the WWF Water Risk Filter or WRI Aqueduct to assess physical indicators including baseline water stress, water scarcity, flooding potential and water quality issues. Simultaneously evaluate regulatory risk and reputational risk factors.

4. GIS Spatial Analysis

Extract water risk data using geographic information systems for precise location-based assessment. This enables identification of high-risk locations and facility-specific vulnerabilities.

5. Local Context Validation

Cross-check tool outputs with local knowledge, engaging water experts and local stakeholders to verify identified risks and uncover issues that global tools may miss.

6. Climate Change Integration

Consider how climate patterns will affect hydrologic cycles, water availability and physical water scarcity under different scenarios. Learn more about using RCP and SSP data for climate risk assessment.

7. Value Chain Extension

Extend assessment beyond direct operations to encompass supply chain water risk, particularly in agriculture, food production and power generation sectors.

Industries Most Vulnerable to Water-Related Risks {#vulnerable-industries}

Certain sectors face disproportionate exposure to water risk due to their operational dependencies and supply chain characteristics.

High-Risk Sectors

Agriculture and Food Production: The largest consumer of freshwater resources globally, highly susceptible to physical water scarcity, severe drought and changing climate patterns. Water availability directly determines productivity and profitability.

Energy and Power Generation: Hydroelectric facilities, thermal power plants and nuclear installations require substantial water for cooling and operations. Water stress threatens energy security in many regions.

Manufacturing and Industrial Processes: Textiles, chemicals, pharmaceuticals and food processing depend heavily on consistent water supply and specific water quality parameters. Battery production, as demonstrated in the Tesla case below, represents an emerging high-water-risk sector.

Technology Sector: Data centres require significant water for cooling systems, creating water risk in already water-stressed regions where many facilities locate.

Mining and Extractive Industries: Operations frequently occur in water-scarce regions, creating both physical risk and reputational risk from competition with local communities for limited freshwater resources.

Apparel and Consumer Goods: Reliance on water-intensive agricultural inputs like cotton, combined with complex global supply chains, creates extensive value chain water risk.

Companies in these sectors should prioritise water risk assessment and develop robust water risk management strategies to ensure business continuity and maintain their social licence to operate.

Tools and Methodologies for Water Risk Assessment {#tools-methodologies}

The water risk assessment landscape has evolved significantly, with sophisticated tools now available to support corporate water stewardship. Companies should employ multiple methodologies to develop comprehensive understanding.

Global Assessment Platforms

WWF Water Risk Filter: A comprehensive free online tool that enables businesses to assess water-related risks across operations and supply chains. The WWF Water Risk Filter evaluates physical risk, regulatory risk and reputational risk at facility and river basin levels, supporting water-related goals setting and reporting purposes.

WRI Aqueduct Water Risk Atlas: Provides detailed data on current and future water risk globally, incorporating baseline water stress, flooding potential and water quality indicators. Particularly valuable for assessing multiple specific sites and comparing risk across portfolios.

GEMI Local Water Tool: Complements global platforms with enhanced local context, enabling companies to understand specific water challenges in their local watershed and engage effectively with local stakeholders.

Alliance for Water Stewardship (AWS) Standard: Provides a framework for credible water stewardship, helping companies implement comprehensive water risk management beyond assessment alone.

Advanced Analytical Approaches

Modern water risk assessment increasingly incorporates:

Artificial Neural Network (ANN) models: Predictive analysis of how water context may evolve under different scenarios
GIS-based spatial analysis: Mapping and visualising water risk geographically to identify high-risk locations
Dynamic modelling: Integrating real-time monitoring data with climate projections and regulatory changes
AI-enhanced platforms: Connecting internal data on corporate water use with external datasets on water quantity, water quality and water security

The trend is toward recurring assessment processes integrated into climate risk management rather than one-time studies. Regulatory requirements under CSRD increasingly demand scenario analysis and forward-looking water risk projections rather than purely historical reporting.

Data Requirements for Effective Assessment

Comprehensive water risk assessment requires collecting and analysing:

Water withdrawal volumes by source (surface water, groundwater, municipal supply)
Water consumption (water withdrawn minus water returned)
Discharge volumes, locations and quality parameters
Water treatment processes and technologies employed
Regulatory compliance status and permit conditions
Stakeholder engagement records with local communities
Supply chain data on water use across the value chain
Climate scenario projections for relevant river basin systems

Companies should invest in systems enabling consistent internal data collection to support both risk assessment and regulatory reporting.

Case Study: Water Risk Management at Tesla Gigafactory Berlin-Brandenburg {#tesla-case-study}

The Tesla Gigafactory in Grünheide, Germany, provides a compelling case study for understanding water risk assessment in practice. Situated in Brandenburg, one of Germany's driest regions, the facility's water requirements and environmental impact have generated ongoing debate among stakeholders, including environmental organisations, regulatory authorities and local communities.

Water Risk Profile

High Water Consumption Requirements

Tesla initially projected annual water consumption at approximately 1.8 million cubic metres—equivalent to the needs of a small town of 30,000 residents. Given Brandenburg's existing water stress and declining groundwater levels, this represented a significant water security challenge.

Recent data reveals a more nuanced picture: Tesla's actual water consumption has been substantially lower than originally allocated. The company has returned portions of previously secured water rights to the local water supplier, demonstrating that initial projections overestimated requirements. Current consumption reportedly averages around 1.4 million cubic metres annually, though facility expansion plans could increase this figure.

Regulatory and Environmental Context

The facility faces complex regulatory risk stemming from its location within a drinking water protection zone. This heightens concerns about potential contamination and resource depletion affecting water supply for local communities. The surrounding Natura 2000 protected areas and Löcknitztal nature reserve add ecological sensitivity.

Tesla's wastewater discharge into the Spree River system creates additional risk, given the river's role in Berlin's drinking water supply. Environmental groups have raised concerns about discharge water quality and potential cumulative impacts on downstream water resources.

Community Opposition and Reputational Risk

Local stakeholder engagement has proven challenging. In February 2024, over 65% of Grünheide residents voted against Tesla's expansion plans, primarily driven by water-related concerns. This demonstrates significant reputational risk stemming from perceived competition for limited water resources with local communities.

Activist groups have protested the facility's water footprint and associated deforestation, highlighting the connection between water risk and broader sustainability concerns. The public perception challenges underscore how water issues can escalate into substantial business risk even when regulatory approvals are secured.

Assessment Methodology and Gaps

Tesla and regulatory authorities conducted hydrological studies to evaluate water supply and demand. However, environmental organisations argue that groundwater recharge rates and climate change impacts on water availability received insufficient consideration. Key assessment gaps include:

Limited scenario analysis of how severe drought conditions might affect operations
Insufficient evaluation of cumulative impacts when combined with other water users in the river basin
Inadequate assessment of climate patterns' effects on long-term water security
Limited transparency in water risk data shared with local stakeholders

The case illustrates tension between global assessment tools and local water context. While regional water stress indicators suggested manageable risk, local communities experienced water scarcity concerns that global tools didn't fully capture.

Risk Mitigation and Lessons

Tesla has implemented several mitigation strategies:

Water Efficiency Measures: Advanced treatment technologies and closed-loop systems have enabled lower-than-projected consumption, demonstrating the value of water stewardship investment.

Alternative Water Sources: Proposals to utilise treated wastewater instead of fresh groundwater remain under regulatory review, potentially reducing stress on local watershed systems.

Returned Water Rights: The decision to return excess water allocations to local communities represents constructive engagement with water security concerns, though conflicts around expansion continue.

Ongoing Challenges: Despite efficiency improvements, regulatory risk and reputational risk persist. The facility faces continued scrutiny regarding wastewater water quality, potential expansion impacts and its role in regional water planning.

This case underscores several critical lessons for water risk assessment:

Initial projections should incorporate conservative assumptions about water efficiency
Local context and stakeholder perceptions constitute material business risk regardless of technical assessments
Transparent disclosure and community engagement are essential components of water risk management
Water risk assessment must be iterative, updating as operations evolve and climate patterns shift
Regulatory approvals don't eliminate reputational risk in water-stressed contexts

Companies in water-intensive sectors should learn from Tesla's experience, prioritising comprehensive water risk assessment, genuine stakeholder engagement and adaptive management approaches.

Water Risk in the Context of Planetary Boundaries {#planetary-boundaries}

Water risk assessment must be understood within the broader framework of planetary boundaries—the safe operating space for humanity defined by critical Earth system processes. This systemic perspective reveals how water challenges interconnect with other sustainability risks.

Crossed Planetary Boundaries and Water Security

Recent scientific assessments indicate that several water-related planetary boundaries have been transgressed:

Freshwater use: Both "blue water" (surface and groundwater) and "green water" (soil moisture) boundaries have been exceeded in many regions
Biogeochemical flows: Nitrogen and phosphorus pollution affecting water quality globally
Biosphere integrity: Biodiversity loss compromising ecosystem services including water regulation

These interconnections mean water risk cannot be assessed in isolation. Companies must understand how water stress, water scarcity and water quality degradation interact with climate change, biodiversity loss and pollution to create systemic business risk. Learn more about planetary boundaries and business implications.

Climate-Water Risk Integration

Water risk manifests as both a driver and consequence of climate risk:

Physical Risk Amplification: Climate change intensifies water-related physical risk through altered precipitation patterns, increased flooding frequency and prolonged severe drought events. Companies must assess water availability under multiple climate scenarios using RCP and SSP frameworks.

Transition Risk Linkages: Policy responses to climate change increasingly incorporate water management, creating regulatory risk through allocation restrictions, pricing mechanisms and reporting requirements under frameworks like CSRD.

Value Chain Complexity: Climate impacts on agriculture and food systems create cascading water-related risks throughout supply chains, particularly affecting companies dependent on water-intensive commodities.

This systemic perspective reinforces that water risk assessment is not merely an environmental compliance exercise but a strategic imperative for business resilience in an era of compounding sustainability challenges.

Mitigation Strategies for Water-Related Risks {#mitigation-strategies}

Effective water risk management extends beyond assessment to encompass comprehensive mitigation strategies tailored to specific risks identified.

Operational Water Efficiency

Process Optimisation: Implement lean manufacturing and operational efficiency programmes specifically targeting water use. Many facilities can reduce consumption by 20-40% through systematic efficiency improvements.

Technology Investment: Deploy water-efficient equipment, closed-loop systems and advanced water treatment technologies. While capital-intensive, these investments often generate attractive ROI through reduced water costs and enhanced resilience.

Circular Economy Approaches: Design systems enabling water recycling and reuse, minimising freshwater withdrawal and wastewater discharge simultaneously.

Supply Chain Water Stewardship

Addressing value chain water risk requires collaborative approaches:

Supplier Assessment: Integrate water risk into supplier evaluation and selection criteria
Capacity Building: Support suppliers in high-risk locations with water stewardship training and resources
Collective Action: Participate in watershed partnerships and industry initiatives to address shared water challenges
Transparency Requirements: Establish water disclosure expectations throughout the supply chain

Companies with significant agricultural supply chains should explore opportunities to support sustainable farming practices that reduce irrigation requirements and improve soil water retention.

Diversification and Resilience

Alternative Water Sources: Invest in rainwater harvesting, water recycling systems and, where appropriate, desalination technologies to reduce dependence on stressed water supply sources.

Geographic Diversification: Consider water risk in facility location decisions and supply chain design to avoid concentration in high-risk locations.

Contingency Planning: Develop operational response plans for potential water supply disruptions, including backup sources and demand reduction protocols.

Regulatory Engagement and Governance

Proactive Compliance: Stay ahead of environmental laws and water legislation through systematic regulatory monitoring and early implementation of emerging requirements.

Water Governance: Establish board-level oversight of water-related risks, integrate water metrics into executive performance evaluation and ensure adequate resources for water risk management.

Stakeholder Dialogue: Engage systematically with local communities, water experts and regulatory bodies to build social licence and identify emerging water challenges early.

Disclosure and Transparency: Provide comprehensive water risk and performance data through frameworks like CDP Water Security, supporting investor assessment and demonstrating water stewardship commitment.

Companies should also consider how biodiversity and ecosystem protection support water security. Voluntary biodiversity credits can fund watershed restoration that enhances water availability and quality.

Corporate Water Disclosure Trends {#disclosure-trends}

The landscape of corporate water disclosure has evolved dramatically, driven by regulatory requirements, investor expectations and growing recognition of water as a material business risk.

Accelerating Disclosure Adoption

The number of companies reporting water data through CDP Water Security has increased substantially in recent years, reflecting heightened investor and stakeholder attention to water-related risks. This trend parallels broader expansion of ESG disclosure but shows particular acceleration in water-intensive sectors and companies operating in water-stressed regions.

Water Stewardship Solutions Market Growth

The corporate water stewardship market has emerged as a significant growth sector. Demand for specialised services including water risk assessment, monitoring systems, stakeholder engagement support and regulatory reporting assistance has expanded considerably. This reflects transition of water management from operational concern to strategic business function requiring sophisticated expertise.

Market growth drivers include:

Regulatory mandates under CSRD and similar frameworks globally
Investor scrutiny of water-related risks in due diligence and ongoing portfolio monitoring
Supply chain pressure as major buyers require water disclosure from suppliers
Reputational risk management as water scarcity issues gain public attention
Recognition of financial materiality through direct cost impacts and business continuity threats

Evolving Disclosure Quality

Leading companies are moving beyond simple volumetric reporting to provide:

Context-based water targets reflecting local watershed conditions rather than universal percentage reduction goals
Scenario analysis of water availability and water quality under different climate patterns
Financial quantification of water-related risks and opportunities
Disclosure of water governance processes and board oversight
Transparent reporting of water challenges and setbacks, not just achievements

This evolution supports more meaningful assessment by investors and stakeholders of corporate water risk management effectiveness. Companies should view disclosure not as compliance burden but as opportunity to demonstrate strategic water stewardship supporting long-term business resilience.

How I Can Help {#how-i-can-help}

If your company seeks to better understand and manage water-related risks, I provide tailored guidance across the full spectrum of water risk assessment and management requirements.

Strategic Water Risk Advisory

CSRD/ESRS E3 Implementation: Navigate regulatory requirements, establish compliant water disclosure processes and integrate water into broader sustainability reporting
Double Materiality Assessment: Determine whether water constitutes material risk requiring disclosure under CSRD frameworks
Scenario Analysis: Develop credible water risk scenarios aligned with climate risk assessment methodologies
Governance Integration: Embed water risk into enterprise risk management frameworks and board oversight processes

Operational Water Risk Management

Facility-Level Assessment: Conduct comprehensive water risk assessment for specific sites using appropriate tools and local context
Supply Chain Analysis: Evaluate value chain water risk and develop supplier engagement strategies
Mitigation Strategy Development: Design water efficiency programmes, alternative sourcing strategies and resilience investments
Stakeholder Engagement: Support dialogue with local communities, regulators and water experts to build social licence

Investment and M&A Due Diligence

For venture capital and private equity investors, I provide:

Portfolio Water Risk Screening: Assess water-related risks across existing and potential investments
Due Diligence Support: Evaluate target companies' water risk exposure and management capabilities
ESG Integration: Incorporate water risk into broader ESG due diligence frameworks
Post-Investment Value Creation: Support portfolio companies in developing water risk management capabilities that enhance resilience and valuation

Whether you need support evaluating water challenges in specific locations, implementing regulatory requirements or developing strategic water stewardship approaches, get in touch to explore how we can enhance your company's water risk resilience and build a more sustainable future.

Frequently Asked Questions {#faq}

What is a water footprint?

A water footprint measures the total volume of freshwater resources used to produce goods or services. It encompasses direct water consumption in operations and indirect water use across supply chains, including agricultural inputs and manufacturing processes. Companies increasingly assess their water footprint to understand resource dependencies and identify reduction opportunities.

Why is water risk important for companies?

Water risk can directly impact business operations through supply chain disruptions, rising operational costs, regulatory penalties and reputational damage. In water-stressed regions, physical water scarcity threatens production continuity. Regulatory risk from evolving environmental laws creates compliance challenges. Reputational risk emerges when corporate water use conflicts with local communities' water security. Addressing water risk ensures business resilience and supports long-term sustainability.

How often should a water risk assessment be carried out?

Water risk assessment should be conducted initially during facility planning or supply chain evaluation, then updated regularly as operations, climate patterns and regulatory requirements evolve. Leading companies conduct comprehensive assessments every 2-3 years, with annual reviews of key risk indicators and continuous monitoring of high-risk locations. CSRD requirements effectively mandate annual water risk review as part of sustainability reporting for in-scope companies.

What are the five things a risk assessment should include?

A comprehensive water risk assessment should include: (1) physical risk evaluation assessing water availability, baseline water stress and flooding potential; (2) water quality analysis including pollution risks and treatment requirements; (3) regulatory risk review of environmental laws, water legislation and compliance status; (4) reputational risk assessment considering stakeholder perceptions and community impacts; and (5) value chain analysis extending beyond direct operations to encompass supply chain water-related risks.

How do companies assess their water footprint?

Companies assess their water footprint using industry-standard methodologies and tools. The process typically involves collecting internal data on water withdrawal, consumption and discharge across all facilities, then extending analysis to indirect water use in supply chains using tools like the WWF Water Risk Filter or WRI Aqueduct. Leading companies combine facility-level monitoring data with life cycle assessment approaches. Learn more about lifecycle assessment methodologies.

What actions can companies take to reduce their water footprint?

Companies can reduce their water footprint through multiple strategies: optimising industrial processes to improve water efficiency, investing in water-saving technologies and closed-loop systems, implementing advanced water treatment enabling reuse, sourcing from water-efficient suppliers, engaging in watershed restoration programmes and setting water-related goals aligned with local water context. The most effective approaches combine technical solutions with organisational commitment to water stewardship.

How do regulatory changes impact businesses regarding water use?

Governments globally are tightening water legislation in response to water scarcity and pollution challenges. Regulatory changes increasingly require businesses to invest in water-efficient technologies, improve wastewater treatment, report water use data transparently and demonstrate responsible water stewardship. Under CSRD, large EU companies must disclose water-related risks and management approaches. Non-compliance can result in fines, permit restrictions and operational limitations, making regulatory risk a significant component of overall water risk.

What are the four types of risk assessments?

The four primary types of water risk assessment are: (1) physical risk assessment evaluating water quantity challenges like scarcity, stress and flooding; (2) water quality risk assessment examining pollution, contamination and treatment requirements; (3) regulatory and compliance risk assessment reviewing legal obligations and policy changes; and (4) reputational and social risk assessment considering stakeholder perceptions and community relations. Comprehensive water risk assessment integrates all four types to provide holistic understanding.

How much is a water risk assessment?

Water risk assessment costs vary significantly based on scope and complexity. Basic screening using free online tools like the WWF Water Risk Filter requires primarily internal staff time. Comprehensive facility-level assessments conducted by water experts typically range from €5,000-€25,000 per site depending on complexity. Enterprise-wide assessments encompassing multiple facilities and supply chain analysis can range from €50,000-€200,000+ for large multinational companies. CSRD-compliant water risk assessment integrated into broader sustainability reporting typically represents a subset of overall compliance costs.

How can supply chain management help mitigate water risks?

Supply chain management mitigates water risks by selecting suppliers with demonstrated water stewardship capabilities, particularly in water-stressed regions. Companies can incorporate water risk criteria into procurement decisions, support supplier capacity building in water efficiency and treatment, diversify sourcing to reduce concentration in high-risk locations and collaborate with suppliers on watershed protection initiatives. Transparency requirements and disclosure expectations throughout the value chain enable better water risk visibility and management.

What financial implications can arise from poor water risk management?

Poor water risk management generates multiple financial implications: increased operational costs from rising water prices and efficiency losses, production disruptions reducing revenue, regulatory fines and legal costs from non-compliance, capital requirements for remediation or alternative sourcing, reputational damage affecting customer and investor confidence, and potentially reduced enterprise value in transactions. Companies demonstrating robust water risk management can improve financial performance, reduce liabilities and enhance brand reputation while ensuring business continuity.

By implementing systematic water risk assessment and comprehensive mitigation strategies, companies strengthen resilience, achieve sustainability goals and position themselves to thrive in an increasingly water-constrained world.

Johannes Fiegenbaum

ESG and sustainability consultant based in Hamburg, specialised in VSME reporting and climate risk analysis. Has supported 300+ projects for companies and financial institutions – from mid-sized firms to Commerzbank, UBS and Allianz.

More about

19 min read