Water Risk Assessment Framework

Advancing water stewardship to improve business security

Many regions of the world are experiencing serious droughts, severe water scarcity and poor water quality. This has concentrated investors’, companies’ and institutions’ attention on the problems that water related risks could pose to production and income.

In response, several organisations have developed informative water risk assessment tools. They offer users a first view of the main water risks associated with their business. However, we recognise that a more in depth and tailored assessment is required in order to identify and address specific business related water risks.

In 2016, we developed an advanced Water Risk Assessment Framework that can be tailored for any portfolio or individual business. It seeks to better inform water related risk assessment and to garner interest in turning those risks into opportunities.

The comprehensive analysis we have developed with Water Footprint Network puts us in a strong position to empower our hotels to make a positive difference in their local communities through water stewardship.

Paul Snyder, Vice President of Corporate Responsibility – Environmental Sustainability, IHG.

The Water Risk Assessment Framework can be adapted and tailored to an individual business’ unique set of circumstances. It incorporates details of the business as a whole and includes the variations amongst each individual site included in the assessment. This makes it possible to identify the level of exposure of each operational unit. By combining the level of risk with the level of exposure, a ‘water stewardship business case’ is established for each operational unit and the most appropriate water stewardship actions are selected.

Determining water stewardship business case

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Selecting water stewardship actions

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  • If water risk is low, general best practice water stewardship actions should be implemented.
  • If water risk is high but the business case is weak, regional best practice water stewardship actions should be implemented.
  • If water risk is high and the business case is strong, international best practice and best available technology should be implemented.

Who can benefit from the Water Risk Assessment Framework?

The Water Risk Assessment Framework can be used to assess a range of water related business risks, such as company operations and supply chain, investor portfolios and global portfolios.

Tailored water risk assessments

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InterContinental Hotels Group’s (IHG®) recently performed the hospitality industry’s most comprehensive water risk assessment to date. Using the Water Risk Assessment Framework, we conducted a detailed assessment for all of the company’s hotels, as a first step in developing its worldwide Water Stewardship Programme. This involved undertaking:

  • Rigorous assessment of 11 physical, regulatory and reputational risk triggers related to both water quantity and water quality for over 6000 hotels, both operating and pipeline.
  • Robust risk assessment and water stewardship actions frameworks identify actions that each hotel can do to manage and mitigate water risk.
  • Establishing Hotels Risk Assessment and Water Stewardship Actions databases to guide the Water Stewardship Programme.
  • Developing a deep understanding of water usage at a local level, applying best practice techniques and behaviours to manage and reduce the water footprint.

The Netherlands Development Finance Company (FMO) benefited from the framework; it was adapted and developed into an online tool specifically for the organisation. FMO can use the tool to explore water-related risks in its portfolio of clients, to identify and manage individual investment risks and to engage with clients in monitoring and mitigating their water related risks.

The Water Risk Assessment Framework has also been tailored for the Yaşar Group and applied to help four companies within the Group understand the water footprint of their operations and supply chains and the sustainability of their water use. The results revealed even with a limited amount of data, how these facilities could improve their water use and minimise the potential risk related to their water use. This gave the Yaşar Group a solid foundation for progress towards corporate water stewardship.

If you would like to find out how we help you progress towards water stewardship by tailoring the Water Risk Assessment Framework to your specific needs, please contact us.