Recent reports concerning the impacts of climate change should give South Carolina business leaders pause to rethink any notion that the State is immune from future water-related risks that may disrupt business planning and profitability. The World Economic Form’s Global Risks 2014 identifies water risk as one of the top ten global risks of highest concern to governments, businesses and civil society. The report “Risky Business: The Economic Risks of Climate Change” found that the Southeast is likely to experience an additional 17 to 52 extremely hot days per year by mid-century. Aside from hotter weather, climate change has and will cause increased incidents of extreme weather – from prolonged drought to severe floods. More intensive rain events are expected to overwhelm aging sewer and stormwater infrastructure, causing more frequent flash flooding and sewer overflows. Drought is expected to increase in frequency and in duration, resulting in lowered agricultural production, greater pollutant concentrations in water, and threats to adequate water supply. Climate change will raise water temperatures, which will cause complications in water use for industrial cooling processes. The uncertainty engendered by climate change will reveal flaws in existing water law schemes.
The energy and agricultural business sectors are clearly adversely affected by climate change. Other business sectors with high exposure to water risk include the beverage industry, pharmaceuticals, chemical manufacturing, tire and automobile manufacturing, mining, forestry and paper, and semiconductor and other technology hardware. Businesses are increasingly becoming more proactive in understanding and managing water risks and impacts. According to corporate water disclosure guidelines published by the CEO Water Mandate, advantages of proactive corporate assessment of water risk include avoidance of operational crisis due to inadequate water availability, reassuring investors that business operations will continue to be profitable by planning for and obtaining water security, and gaining a competitive edge through enhanced public perception of responsible water management. This year, 65% of the largest publicly traded companies in the United States publicly disclosed their water use and efforts to use water more efficiently. Some companies in South Carolina do engage in water risk assessment and/or disclosure in order to better plan for the future, including Lockheed Martin, Fluor, International Paper, Sysco, Sonoco, and Boeing. But more companies, large and small, need to take a look at volume of their water use in relation to the water source and whatever pressures are presently occurring or soon to be experienced by that water source. At a minimum, understanding water risk involves analysis of water usage, and legal rights, threats or uncertainties associated with water availability and use. According to Lloyd’s of London, managing water risk may require sustained engagement with river basin managers and stakeholders, not only to protect water availability for the company’s operations, but on achieving more sustainable water management to mitigate unforeseen ecological, social or regulatory problems.