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Executive Perspectives

EXECUTIVE PERSPECTIVE: Water, the second biggest global risk?

By Peter Brabeck-Lethmate,  Chairman of the Board,  Nestle, and Anders Berntell, Executive Director, Chairperson 2030 Water Resources Group 

21 January 2013.   At the launch of the World Economic Forum’s Global Risk 2013 when more than 1,000 international experts from various sectors were asked to evaluate 50 global risks from an economic, environmental, geopolitical, societal and technological perspective, the Global Water Crisis came second.

It came second in relation to impact, after Major failure of the financial system, but before other risks such as Chronic fiscal imbalance, Food shortage and Weapons of mass destruction. And it also made it into the top five concerning the probability of the risk becoming reality within the next couple of years.

CEO’s of many companies have begun to realize that water underpins all economic activities, including their own. In the 2010 CDP Water Disclosure questionnaire sent to 300 of the world’s largest companies, 39 percent stated they are currently experiencing disruptions to their operations due to water shortages or quality concerns, while half responded that they will face risk of disruption within five years.

The results of these surveys are examples of the increasing awareness of the seriousness of the water resource challenges we are facing. Traditionally, it has been the water experts that have rung the alarm bell, but now we see an increasing number of business leaders, as well as experts from other sectors such as agriculture, energy, health and the environment that are becoming equally concerned.

There is an emerging gap between safe freshwater availability and water demand in many developing and fast-growing economies around the world. Recent analysis suggests that this gap will be about 40% globally by 2030 if business as usual water management approaches continue. The economic, environmental, social and political challenges that this water gap presents to governments are very real. Agriculture is currently responsible for about 70% of annual global freshwater withdrawals and up to 90% in some parts of Asia; yet governments across Asia will also need on average 65% more freshwater withdrawals for their industry, energy sectors and household use by 2030 in order for their national economies to grow as forecast and for people to have access to water. With finite limits to freshwater availability (including for environmental sustainability) facing many governments across Asia, Africa and Latin America, and the Middle East how can water resources be organized to safely deliver the water needed to fuel growth, as well as for humans and the environment?

Under these conditions, crises involving water security thereby provide us with the opportunity to work towards bridging this gap.

Collaborating with governments to help narrow this gap is the scope of our work at the 2030 Water Resources Group (WRG)* and we are not alone in this effort. We strongly rely on partners like the World Economic Forum, International Finance Corporation (IFC), the Swiss Agency for Development Corporation (SDC), Swedish International Development Agency (SIDA), The Coca-Cola Company and PepsiCo, WWF, Global Water Partnership (GWP) and the Global Green Growth Institute (GGGI). Additionally, we collaborate with other initiatives and institutions representing a range of other parts of the World Bank Group, Regional Development Banks such as IDB, ADB and AfDB, UN-agencies and programs, NGOs and civil society organizations.

The results so far show how powerful such collaboration can be in addressing the challenges at hand. Only when we work together, across sectors, across the public-private-civil society divide can we solve the water crisis.

This is the core of our Governing Council meeting at Davos this year, where we will have an opportunity to engage with the broader community at the World Economic Forum to present our results, and our plans for the future. We welcome more actors, public, private, NGOs and civil society organizations to join our efforts. Only together can we succeed.

2030 Water Resources Group:

WRG is a unique public-private-civil society partnership that helps governments to accelerate reforms that will ensure sustainable water resource management for the long term development and economic growth of their country. It does so by helping to change the “political economy” for water reform in the country through convening a wide range of actors and providing water resource analysis in ways that are digestible for politicians and business leaders.

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