Report: Water Scarcity is the Biggest Challenge Facing Food Production

Summary

A report from Barclays Capital high­lights the global con­sumer sta­ple sec­tor, par­tic­u­larly food pro­duc­tion and agribusi­ness, as the most vul­ner­a­ble sec­tor due to water scarcity, with the need for fresh water in the indus­try set to increase by 40 per­cent by 2030. Despite the aware­ness of the chal­lenge posed by water scarcity, com­pa­nies in the food indus­try are not doing enough to address the issue, and adopt­ing sus­tain­able agri­cul­tural prac­tices is rec­om­mended to pre­vent a water cri­sis in the future, accord­ing to the report and CDP, a non-profit orga­ni­za­tion that empha­sizes the urgent need for trans­for­ma­tive action to man­age water risks.

According to a report from Barclays Capital, the global con­sumer sta­ple sec­tor – includ­ing food pro­duc­tion and agribusi­ness – is fac­ing a major risk due to water scarcity and is cur­rently the most vul­ner­a­ble of all sec­tors.

“Our analy­sis sug­gests water should be con­sid­ered the largest dri­ver of envi­ron­men­tal con­cern for the sta­ples,” the authors of the report wrote.

The report ana­lyzed the risks and oppor­tu­ni­ties faced by global sta­ples due to water short­ages, and high water costs and increased reg­u­la­tion.

According to Barclays Capital’s fore­casts, the need for fresh water in the food indus­try is set to increase glob­ally by 40 per­cent by 2030 due to a grow­ing pop­u­la­tion. In addi­tion, increas­ing global tem­per­a­tures have wors­ened the sit­u­a­tion. The report con­cluded that water short­age is the most crit­i­cal envi­ron­men­tal con­cern in the food indus­try.

Curiously, while com­pa­nies in the food indus­try are acutely aware of the chal­lenge posed by water scarcity in their day-to-day oper­a­tions, they do not seem to be doing enough to deal with the chal­lenge. Instead, most of these com­pa­nies are focus­ing on the effects of ris­ing car­bon lev­els.

To reduce their depen­dence on water, busi­nesses should adopt sus­tain­able agri­cul­tural prac­tices such as using sen­sors, pre­ci­sion irri­ga­tion, con­sult­ing satel­lite data and soil-less farm­ing, the report rec­om­mended. Following these mea­sures would help to pre­vent a water cri­sis in the con­sumer sta­ples indus­try in the future.

CDP, a non-profit that runs the global dis­clo­sure sys­tem for com­pa­nies, gov­ern­ments and investors to man­age their envi­ron­men­tal impacts, said that most of them could not show that they are doing any­thing tan­gi­ble to min­i­mize the press­ing risk of water-related prob­lems.

According to a CDP sur­vey involv­ing 2,934 com­pa­nies that dis­closed data about their water man­age­ment in 2020, more than one-third of the com­pa­nies increased their water con­sump­tion com­pared to 2019.

In addi­tion, 95 per­cent of the com­pa­nies could not pro­vide rep­utable evi­dence that they were mak­ing progress against their pol­lu­tion tar­gets.

“The water cri­sis must be approached with the same urgency and inno­va­tion as the Covid-19 cri­sis – and the busi­ness case for action is clearer than ever,” Cate Lamb, CDP’s global direc­tor of water secu­rity, said. ​“We can turn this sit­u­a­tion around, but we need much more trans­for­ma­tive action.”

“As investors pay closer atten­tion to com­pa­nies’ man­age­ment of water risks, CDP is call­ing for all com­pa­nies to develop ambi­tious tar­gets to reduce water with­drawals and elim­i­nate water pol­lu­tion, includ­ing net-zero water tar­gets,” she added. ​“Companies must take bold action now to trans­form their busi­ness mod­els.”

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• CDP