From droughts to floods, we are currently dealing with extreme weather, and business should prepare for worse to come, says Peter Knight

Lettuces are virtually extinct in the parched and now mostly fallow fields of California. A month ago in parts of the UK you would have to don scuba gear to harvest what’s left of the flooded winter crop.

With such contradictions in the story of water, no wonder business is so confused about how it should prepare for a future with a dire shortage (or over abundance) of water. Business can’t continue to ignore the watery warnings or continue to treat the subject so glibly.

Nowhere is this confusion more obvious than in the trivial corporate reporting on water. Gushing stories of the dual-flush lavatories on the seventh floor are really quite uninteresting and merely tell the reader how ignorant the reporter is of the broader picture.

Water once powered the industrialising world. Now it is essential for virtually everything we make – even iPhones need a good wash – and our nuclear power stations must be near the sea or large rivers for the cooling needed to keep the reactors under control.

But to really grasp the essential role that water plays in the commercial world you have to get your head around the idea of “virtual water”, or what some call “embedded water”. This is the amount of water it takes to makes something, like the paper page or screen you are reading now.

Some virtual water you can actually see, like that in your morning shot of avocado pear juice or espresso. But most is invisible because it was used to make the now dry item before you.

An apple takes about 88 US gallons (330 litres), a burger 660 gallons (2,500 litres) and pair of jeans 2,900 gallons (11,000 litres). The availability of that water, its ownership and what happens to it once used all contribute to a fast-flowing crisis that business seems determined to ignore.

Extreme contrast

While California prepares to truck water to parched communities facing the worst drought in 500 years, UK farmers have abandoned tractors for boats. In a couple of years the English could be in the same metaphorical boat as the Californians because it is the climate that matters and not the weather. The long-term indications are that our climate is changing (sorry, but it’s true), and with that comes wonky weather which affects our water supply.

A few years ago there was so little ground water in southern England that the countryside was more parched than southern California. Now one of the main reasons for the flooding is water bubbling up from underground, filling homes and turning streets into rivers.

While the rain may be from God, water is controlled by mortals. This not only determines water availability but also plays into the politics of regions and nations. That avocado juice, if produced in Israel, could contain water “owned” by the Palestinians but used by Israeli farmers, and drunk by you. And as Scarlett Johansson discovered with her promotional work for SodaStream and Oxfam, getting involved in those politics carries a serious health warning.

Most virtual water is used, not consumed, and in the process it is inevitably polluted. As populations grow and clean water becomes increasingly scarce, so does the cost of cleaning what you use.

While those outside the manufacturing industry can rightly claim that they themselves are not the users, this does not absolve them from taking responsibility for what happens in their supply chains.

But what should business actually do about water, and where does it make a start? Here are seven things that successful companies do when navigating water:

1.      Understand: how you use water and how much you use (your water footprint) and the risks that your business faces if the flow stops.

2.      Strategise: analyse usage, prioritise areas of risk for early action, and plan to shrink your footprint.

3.      Act: tackle your challenges and capitalise on opportunities.

4.      Report: disclose your performance.

5.      Communicate: tell your water story (especially to investors)

6.      Engage: listen and be humble, but inspire others to follow your lead.

7.      Learn: anticipate change and stay ahead of the trend.

Peter Knight is chairman of Context.

Visit www.contexteurope.com for a free copy of Context’s pocket guide to water and business: The Wh2Ole Story.

California  climate change  water crises  water resources