Many of us take access to fresh water for granted. It’s available from the tap. It’s recyclable. Because supplies are readily available, we don’t have to worry about it.

But as CDP’s Miriam Denis Le Seve and Sonya Bhonsle recently explained to Procurement Leaders members in a risk and sustainability conference call, four billion people suffer from severe water scarcity for at least a month every year.

The effects are far-reaching: CDP Research estimates that the cost of water-related risks currently stands at up to $77 billion. In addition, up to 30% of global GDP will be affected by high water stress by 2050. While that may seem a long way off, headlines show that this risk is already beginning to materialize.

Heavy rainfall in the Rhine causes disruptions to cargo ships, Drought causes traffic jams in the Panama Canal, Water shortage slows down semiconductor production – all these incidents were a result of water shortages. The delays and costs they have imposed on companies are real.

In addition, research suggests that supply chains for certain goods exacerbate the problem.

Miriam explained to members that about half of the water footprint of rich countries – the total amount of water used and/or polluted in the production of the goods and services we buy – comes from areas affected by extreme water scarcity. She gave the example of one kilogram of bananas requiring 800 litres of water to produce. When the bananas are exported, the water leaves these areas and ends up in the global north.

Yet despite the impact of supply chains on water scarcity, only 5,000 companies report this issue through CDP. Even fewer companies involve their suppliers – even though they are seven times more likely to report risks that do. If you do nothing, you won’t be able to identify potential risks, nor take steps to avoid or mitigate potential impacts.

Miriam and Sonya outlined the steps CPOs can take to ensure their companies – and their suppliers – use water more responsibly. And it probably won’t surprise you that in many ways these steps are similar to the actions most functions already take to calculate, report and reduce supply chain carbon emissions: identify risks, set targets, motivate employees to take action, then start working with your suppliers and incentivize them to report their consumption and develop plans to reduce it.

While the window to act is closing fast, CPOs are in a unique position to take action. As you make your plans for the year ahead, don’t forget the potential impact of water risks – nor your power to make a change.

I&D Impact Awards: Submissions now open

Registrations are now possible for the I&D Impact Awards 2025that recognize exceptional achievements in diversity, equity and inclusion. With many procurement teams working to develop outstanding supplier diversity programs that contribute to a more inclusive and equitable world, the awards are an important opportunity to celebrate the power of companies to make a difference.

Visit the website to discover more and enter.

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