The cost to businesses of inaction on water risks is five times higher than the cost of action, yet water security is currently under-represented in the public debate on climate change. This is according to international non-profit CDP.
Suzanne Scatliffe, global sustainability director, AXA XL, said: “Creating a water-secure world requires water resources to be protected and properly managed, which is why it’s more essential than ever that water is at the forefront of corporate climate strategies.
“AXA XL is committed to helping organisations to improve their understanding of water-related risks and how they impact business operations.
The insurer has published a report focusing on seven sectors within AXA XL’s client-base and with high exposure to water risks. These are:
- Food, beverage and agriculture;
- Apparel and textiles;
- Utilities;
- Manufacturing;
- Technology and electronics;
- Healthcare and pharmaceuticals; and
- Transport and logistics
It presents how those sectors may be impacted by three types of water risk:
- Physical – including water scarcity; climate change and threats to ecosystems; poor water quality and pollution of water resources; flooding; and poor management of water resources.
- Regulatory – including higher water prices; regulation of effluent quantity and quality; statutory water withdrawal limits; and regulatory uncertainty.
- Reputational – including negative media coverage and public scrutiny, changes in consumer loyalty and loss of market share due to litigation and damage to brand.
In addition, the report outlines five recommendations – including setting water consumption and pollution reduction targets and carrying out future scenario planning – to help businesses manage key water-related risks.
No comments yet