Why Water Management Is a Strategic Concern

Water management is a strategic concern due to growing global water risks and challenges. Although water covers 70% of Earth's surface, only 0.5% is usable. Rapid population growth and industrial uses have increased demand, while pollution, climate change, and misuse further exacerbate the problem. As competition for water intensifies, companies and communities must rethink their approach to water management.

Traditionally, companies see water as a utility managed by operations or plant managers, calculating demand based on their business models and rarely considering it a critical factor in strategic decision-making. However, the Global Commission on the Economics of Water warns of a growing water disaster, emphasizing that we cannot rely on freshwater availability for the future.

In 2025, 35.8% of the U.S. experienced drought, affecting every region, with consequences including catastrophic wildfires, low water levels on the Mississippi River, and record-low streamflow in the Northeast. Globally, 30% of land area faced drought conditions due to near-record warming. New operational and regulatory challenges arise, such as France's ban on PFAS, which requires drinking water testing for synthetic "forever chemicals" and penalizes companies for releasing them into the environment.

Water management is particularly critical for growing industries and sectors, such as AI data centers, green hydrogen, and the technology industry's demand for critical minerals. Even traditional sectors like food and beverage and textile production contribute to water demand and pollution. Many small businesses also face water risks, including car wash facilities, breweries, and restaurants.

To address these challenges, executives must appreciate the complex relationships of water flows and cycles and take greater ownership of resources across production and supply chain processes. Managing water efficiently requires setting new KPIs, such as total water withdrawal, water recycle/reuse rate, wastewater treatment improvements, and watershed restoration impact. Companies must monitor both inflows and outflows of water, accounting for local water scarcity risks that often differ from general water scarcity.

In conclusion, water management is a strategic concern that requires rethinking how companies and communities approach water use. Ignoring water issues can have severe consequences for health, well-being, economic development, societal stability, and security.