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| World Marketplace |
Illiquid Assets
Peter H. Gleick and Jason Morrison
09/01/2005
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Establish a corporate water
policy and factor water risks into relevant business decisions. Top management,
particularly in water-intensive industries, should clearly articulate the
organization’s policies regarding water resource issues. Given water’s growing
importance, companies should consider scarcity and water risks as fundamental
factors when making a range of strategic business decisions, from factory siting
to new product development.
Measure water use. Companies must understand
and measure water use and wastewater discharges associated with their current
operations and production, including that of their suppliers. This will provide
a baseline for assessing risks, prioritizing efforts and measuring
progress.
Assess local water conditions. Companies, particularly
those with global operations, should assess local water conditions, including
hydrological, social, economic and political factors for all the places in which
they operate. This assessment should flag areas of shortage, rapidly growing
demand and disparities in either access or prices between industrial users and
local communities. Such an analysis can provide advance warning of places where
tensions with the local community may appear in future years or during dry
periods.
Consult with stakeholders. Communities often feel very strongly
about the use of local water resources—and rightly so. Experience has shown that
early identification of local actors and their water-related needs, coupled with
a policy of open and ongoing communication, can reduce the risk of water-related
disputes. In addition, proactive efforts by companies to improve water quality
or water availability can help build positive relations with regional
stakeholders. These efforts can include direct participation in developing local
water systems, provision of funds or appropriate technology, education or water
resource planning.
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