Philosophers have long pondered the value of water, from Franklin’s aphorism of ‘When the well is dry we know the worth of water’ to the paradox of diamonds and water:
Nothing is more useful than water: but it will purchase scarce any thing…A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.– A. Smith, Wealth of Nations
The perceived value of water is changing yet again as population and business growth increase competition for water resources even in humid regions. This competition has increased pressure on businesses to quantify and justify their impact on water resources. But there are few standards for evaluating and reporting what has become known as the ‘water footprint’ of a corporation, loosely defined as the total volume of freshwater that is used to produce the goods and services of the business. Corporate managers and shareholders have also begun to realize that their operations can be compromised because of water quantity, quality, and politics even if their products do not incorporate water. Identifying water risks can be challenging for multinational corporations because the risks are location-specific and also depend on public perception and corporate participation in water-resources policy making.
Several tools have been developed to help quantify the water footprint of a corporation and assess water risks. One is the Global Water Tool (GWT), developed by the World Business Council on Sustainable Development (WBCSD). The GWT is a Microsoft Excel workbook with WHO data that compiles water use statistics and risk indices that can be used to screen corporate operations for water use and risks. Another useful tool is the set of sustainability tools offered by the Global Environmental Management Initiative (GEMI). The GEMI approach uses questionnaires to guide the user through a logical risk assessment for a specific location, providing a few calculators and references to assist the process they call Collecting the Drops.
An approach I’ve suggested for assessing water risks is to use the tools in combination, with the GWT to screen corporate operations for at-risk locations, followed by using Collecting the Drops for the specific locations identified as having high water risks. Although these can be augmented by Geographical Information System and database technologies, it will still require some experience in hydrology to realize when data gaps and uncertainties are leading you astray. Users also need to be aware that, although the GEMI tool mentions interannular variability like drought, neither tool addresses climate change.