Scarcity

If you don't have it, you can't bill for it. If there weren't enough for businesses to worry about these days, here is another threat: water scarcity. Companies in industries from technology to agriculture to apparel are vulnerable to the risks posed by a falling supply of available water, according to a report released Feb. 26 by the Boston-based investor coalition Ceres and the Oakland (Calif.)-based Pacific Institute.

Decreasing water availability, declining water quality, and increasing water demand are creating major new challenges for businesses and investors who have historically taken clean cheap water for granted, says the report. It warns of water shortages in many areas of the world in the coming decades and urges companies and investors to examine business's exposure to water scarcity risks to prevent them from eating into revenues and harming corporate reputations.

"This report makes clear that companies and investors can no longer take water for granted," says Anne Stausboll, chief executive of the California Public Employees' Retirement System (CalPERS), the largest U.S. public pension fund, with approximately $170 billion in assets. CalPERS is a member of Ceres. "For many years, CalPERS has advocated for corporate disclosure of environmental risks, and it's clear that this disclosure must include water-related risks and opportunities."