Water. Depending on where you live, some years there's too little of it (the current drought in the US) and some years there's too much of it (Thailand floods -- ring any bells?).
In either case, the global need for water -- for personal consumption, to grow crops, or to help produce electronics parts -- keeps increasing. This brings with it a growing concern about the impact worldwide water scarcity will have on all of us. In fact, it's so important that the World Economic Forum named it a top global risk for 2013. (See Water Risks Impacting Supply Chains .)
But, while identifying a risk is a good start, unless something is done about it, having it simply written down somewhere and noted mentally doesn't mean much.
& Not a Drop to Drink
Does your company require suppliers to report on their water use,
risks, and management? If not, it might be time to broach the question.
Along those lines, I started thinking about an article I recently read on Oxfam's site. Although the story focused primarily on how food and beverage industries are managing their water resources, it points out these United Nations water-use statistics:
- 70 percent of the world's freshwater is used for irrigation,
- 22 percent for other industrial use, and
- only 8 percent for domestic use.
Further down in the article, author Suzanne Zweben, a senior advisor in the private sector department of Oxfam America, asks some pointed supply chain-related questions, which I think should be asked of all industries:
Does the company require its suppliers to report on their water use, risks and management? Are requirements on water rights and use specified in a company's supplier code? Has the company set a specific target to reduce its water use along its whole value chain?
The broader questions she's really asking -- and the ones I'm directly asking you, Mr. or Ms. High-Tech Supply Chain Executive -- are:
- Do you have a water supply chain? Some specific action plan you routinely apply to your water usage and some way of monitoring and holding your supply chain accountable for its water footprint?
- Is it a practice that's as embedded and deemed as important as, say, inventory management practices or build-to-order requirements?
- How strongly linked is it to your company's overall corporate responsibility program?
- And if you don't have a water plan in place, what are you waiting for?
There are initiatives such as the CEO Water Mandate, which was launched by the UN Secretary-General to assist companies in the development, implementation, and disclosure of water sustainability policies and practices. And yes, many leading companies such as Cisco and Intel have had their water-management programs cited as case studies here and here, respectively.
Baby stepsBut, whatever you're doing, it's probably still only the tip of the iceberg. In an age when being good corporate citizens is vital to securing a brand's reputation and maintaining a loyal customer base, isn't it time to take the water conversation further?
Some executives already are. A recent report from CDP, formerly known as the Carbon Disclosure Project, says:
More respondents are assessing water-related risks in their direct operations and supply chains and are also evaluating water-related opportunities. In addition, respondents report taking more tangible action to manage these issues and seize opportunities.
The organization found:
- 71 percent of respondents are now able to state whether or not they are exposed to water risks (up from 62 percent in 2011);
- 71 percent of respondents reported a total of 319 water-related opportunities such as the sale of new products or services;
- 79 percent of opportunities reported with an associated timeframe are expected to materialize now or within the next five years, some with a sales potential of more than €800 million by 2020.
Focus, focusDespite that headway, the CDP reports that water management isn't receiving the significant boardroom attention it warrants:
The proportion of respondents with board-level oversight of their water-related policies, strategies, or plans is essentially unchanged from 2011 at 58 percent. Furthermore, the proportion of respondents setting concrete water-related goals and targets has also changed little at 55 percent.
This all comes full circle. Oxfam's Zweben concludes her article with this observation:
I'm waiting to see who the real leader is going to be -- this company will leverage their influence across their supply chain to take on all three of the key fundamental issues of the human right to water, transparency, AND supply chain management.
What if we turned that observation into a call to action?
The whole world would benefit if companies made a more proactive commitment to address water use as a top supply chain and risk-management issue.