WWF tool helps businesses mitigate water risks

A new online tool unveiled by the WWF and German development finance institution Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) allows companies to identify water risk within their supply chains and provides steps to mitigate that risk, which is becoming a major concern for companies operating in China and the rest of the Asian region.

The Water Risk Filter can be used by all industries in any country and was designed to be simple enough for anyone to understand, according to the WWF. DEG provided financing for the development of the tool, which is being made available to users at no charge.

According to the WWF, companies can use the results of the filter’s risk assessment to form a plan of action to mitigate those risks. Investors and creditors may find the information useful to identify risk and the potential for a return on investment.

The Water Risk Filter draws on data from 235 countries and territories, providing interactive maps and case studies and has been piloted by companies including clothes retailer H&M and brewer SABMiller.

Additionally, the results could be used to advise project developers on improvements that will lead to less risky investments, according to the organization.

Bruno Wein, chairman of DEG, noted the increasing importance of water risk as part of the evaluations conducted by project financers. “Water availability is the most underestimated critical issue for the companies we are financing, but we believe that financial institutions can help make the companies more sustainable in their performance,” he said.

Global water demand is likely to outstrip current sustainable supplies by 40 percent in the next 20 years, which could leave businesses competing for dwindling supplies with each other and rapidly growing domestic and agricultural demand.