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Kate Zerrenner headshot

Climate Change is Worsening Water Scarcity: How Business Can Help

Climate change is already worsening water scarcity — and it's in the private sector's best interest to take action. This soon-to-be-updated tool helps companies track risk in the watersheds where they do business so they can respond meaningfully and locally.
By Kate Zerrenner
water stewardship water scarcity

About 4 billion people live in water-stressed areas and face severe water scarcity during at least one month each year. Over a billion more — including 1 in 4 children — will live in areas of extremely high water stress by 2040. Climate change is already disrupting weather patterns, leading to extreme weather events, causing unpredictable water availability, worsening water scarcity, and contaminating freshwater supplies. 

As major water users, manufacturers have an influential presence in communities worldwide. More specifically, multinational businesses can use their scale to play a significant role to protect the watersheds where they do business and forge partnerships with governments, nonprofits, and other community stakeholders who are best poised to understand the intricacies of local water problems.

Water scarcity poses risk to companies — and climate change is making matters worse

Already, companies must consider the realities of available resources on the ground and factor in other stakeholders that might be in competition for those resources. Climate change only exacerbates this tension. In fact, in its 2021 Global Risk Report, the World Economic Forum listed failure to act on climate change as a top risk impact for the global economy, second only to infectious diseases. 

Water scarcity, specifically, poses a major risk. The World Bank predicts a growth rate decline of 6 percent of global GDP by 2050 as competition for water intensifies across all sectors. While these figures are stark, opportunities exist to create innovative solutions to these challenges. Companies are better poised to drive faster change, and due to the risks they face, it is in their interest to do so.

Chennai water scarcity
The bustling coastal city of Chennai, India, floods frequently during monsoon season and is historically one of the wettest urban centers in the world. But in 2019, it almost ran out of water. 

A personal connection gives way to a global solution 

For Vetri Dhagumudi, global water program leader for Kimberly-Clark, these issues are personal as well as professional. He grew up in Chennai, India, a city of 11 million people that nearly ran out of water in 2019, despite historically being one of the wettest cities in the world

“As a child, growing up with no water was normal,” he told TriplePundit. “Every day, someone’s duty was to pump water from a hand pump. We had no water as part of a daily routine, and then when it rained, you walked to school [in] waist-high water.” 

Dhagumudi trained as an engineer focused on wastewater management, but it wasn’t until he started working in the Arizona desert that he realized how much his life had always been connected to water. He often thought about Chennai, where the community seemed to continuously struggle to develop a solution that worked for them. 

“There were many solutions in the market,” Dhagumudi recalled, “but it was hard to see what works best. How do you find a solution? I decided to focus on the whole water spectrum.” That led to Kimberly-Clark’s co-creation of WaterLOUPE a tool for water-stressed areas similar to Vetri’s own life experiences growing up in Chennai.

Mapping risk at the watershed level eases business-community partnerships

Launched on World Water Day in 2018, WaterLOUPE was developed through a partnership between Kimberly-Clark and Dutch research organization Deltares. The tool visualizes current and future scarcity risks for entire watersheds on a user-friendly dashboard, with the aim of supporting multi-stakeholder decision-making and collaborative action. “Water is emotional,” Dhagumudi said. “The whole idea of WaterLOUPE was to create a scientific discussion, not an emotional one, so the water users could make the best-informed decisions.”

In order to enable the most comprehensive view of a particular watershed, WaterLOUPE tracks data relating to social, economic and climate factors that affect freshwater availability. “As soon as someone says ‘water risk,’ you think water reduction, but that’s not the only solution,” Dhagumudi continued. “We need to understand water supply demand, the socio-economic factors, population, economic development, risk of water conflicts, biodiversity, and urbanization.” 

Watershed partners in Cape Town, South Africa; São Paulo, Brazil; and Cali, Colombia, already use the tool — which combines national and local data with scenario modeling to create risk models and associated solutions. 

Notably, though, WaterLOUPE is not meant to be a plug-and-play solution. An intensive stakeholder process happens first. Getting the data is one thing. Having people buy into it is another.  “We spend eight or nine months before the engagement workshop getting everything lined up,” Dhagumudi said. “You must consider how every location has its unique challenges. What works in Cape Town doesn’t work in São Paulo. We have to have people who understand the culture, the bureaucracy, and pull the science up through the emotion and the politics.”

Felipe Godoi, senior environmental engineer at Kimberly-Clark’s Mogi das Cruzes facility in São Paulo, added: “It’s extremely important to design the tool based on local specifics, so industry, government, and community can together understand the present and future scenarios with the purpose of minimizing the impacts of water scarcity through strategic decision making.”

The entire countries of Israel and Bahrain now have WaterLOUPE studies in progress, with the aim of mapping watersheds at the national level. 

Kimberly-Clark and Deltares will launch WaterLOUPE 2.0 on World Water Day, March 22. This new dashboard can assess possible measures that help mitigate future water scarcity risks, as identified by local stakeholders. The methodology and tool will enable local stakeholders to choose one or multiple solution strategies using scenario modeling to visualize if the water gap and related risks can be minimized, as well as quantify water shortage, risk reduction and economic consequences. Using this tool, local stakeholders in the water basin will be able to visualize the risk and interventions that close the water scarcity gap. 

Addressing water scarcity challenges on a global scale 

Unfortunately, no region is immune from water stress. Many wet areas will go dry, and dry areas will strain under exacerbating conditions. Multinational companies with manufacturing or other operations in multiple countries will see these issues compound with climate change, and it behooves them to proactively work with local leaders to find pragmatic and fair solutions. 

No one company or stakeholder can solve a region’s water problems — the realities are too complex, too emotional, and involve too many interests. A company can set a goal for zero water use, but it will have little impact on the local watershed if other major users in the area do not also change their practices. Put simply: Working together is the only option. 

While the climate changes across the globe, impacts are felt locally. Water in particular is hyper-local, and its importance means it’s also hyper-political. As something we all touch every day, it is also emotional. Using the best scientific data is essential to find the right solutions, but at the heart of this problem are the people who are affected by increasingly scarce water supplies. 

Bringing the story full circle, Kimberly-Clark and its partners are taking the tool to Chennai because of the dire need for innovative water solutions. But for Dhagumudi, it means he can be involved in making things better for his hometown. “It’s satisfying to go back home.”

This article series is sponsored by Kimberly-Clark and produced by the TriplePundit editorial team.

Image credits: kazuend and Mark Rohan via Unsplash

Kate Zerrenner headshot

Kate is a writer and policy wonk, with a focus on water, clean energy, climate change and environmental security. She spent over a decade running energy-water nexus and energy efficiency programs at Environmental Defense Fund as well as time at the U.S. Departments of Energy and Defense, U.S. Government Accountability Office, and state and federal legislatures. She serves as an Advisory Board member of CleanTX, which aims to accelerate the growth of the clean tech industry in Texas.

Read more stories by Kate Zerrenner