Understanding and acting on water risks in the agrifood sector

These challenges can profoundly affect water availability and quality, leading to critical issues. The cost of inaction on water can be up to five times higher than the cost of taking proactive measures, as reported in the CDP Global Water Report 2020. Gaining insights into priority water risks and impacts as part of agribusiness' supply chain is crucial. By understanding these factors, companies can make informed decisions about their water management practices, anticipate financial and regulatory implications, and safeguard production and reputation.

The growing threat: Climate change and water risks

Agrifood is under increasing pressure to feed our growing global population, enhancing cost efficiency and address sustainability challenges. One significant challenge is the impact of climate change on water resources availability and quality. The impacts on the license to operate can be immeasurable, such as total crop loss due to dried-up water reservoirs and resources. There is an urgent need to rethink strategies and transform business models to ensure water security and resilience. The "business as usual" approach is no longer viable as negative exposure to water-related challenges can result in financial and reputational risks. Addressing these challenges requires insights into water-related risks as part of operations and their supply chains to ensure informed actions. But agricultural supply chains can be vast, and challenges can vary per commodity and region. How can a company gain insights into water-related risks and take informed actions?

Solutions for a water-secure future: How to mitigate water risks

At Royal HaskoningDHV we have supported multiple companies to identify risks and translate these into corporate and site level goals and targets in relation to water. From water risks assessments to water footprint assessment and contextual goals and target setting, at Royal HaskoningDHV we follow the principles of Good Water Stewardship and align with internationally recognized approaches to ensure our analysis will meet stakeholder's standards.

Understanding water footprints and assessing water risk are essential steps for businesses. By prioritizing water management, companies can mitigate risks, enhance sustainability, and contribute to a water-secure future.

For a multinational agribusiness company, water risks were analyzed across their operations and supply chains to define most relevant water-related risks and set priorities on where to take actions. This was done by combining global data sets from WWF Water Risk Filter and WRI Aquaduct with company water data for all their assets. The results were presented in interactive maps. The company had so far been focusing on water-efficiency and reducing its water consumption without understanding on which assets to prioritize investments for water efficiency nor assessing water-related risks. The water risk assessment highlighted that although a large number of sites were facing water quantity related risks like drought and scarcity, risks of flooding, water pollution and regulatory risks due to proximity to nature areas were prevailing risks across multiple sites. The company diversified its definition of water goals and targets, beyond water efficiency only, and ensured its asset level plans included actions on the context specific water-related risks. At selected assets, our process engineers support the selection of most appropriate water supply, processing and treatment technologies.

Royal HaskoningDHV offers a wide range of services that can support agrifood business to gain insights into risks and opportunities. We help to ensure business continuity, regulatory compliance, and positive brand imaging. Reach out to us to learn more and start your journey towards sustainable water management for your company.