A decision framework for business water-risk response is proposed that considers financial instruments and supply management strategies. Based on available and emergent programmes, companies in the agricultural, commodities, and energy sectors may choose to hedge against financial risks by purchasing futures contracts or insurance products. These strategies address financial impacts such as revenue protection due to scarcity and disruption of direct operations or in the supply chain, but they do not directly serve to maintain available supplies to continue production. In contrast, companies can undertake actions in the watershed to enhance supply reliability and/or they can reduce demand to mitigate risk. Intermediate strategies such as purchasing of water rights or water trading involving financial transactions change the allocation of water but do not reduce overall watershed demand or increase water supply. The financial services industry is playing an increasingly important role, by considering how water risks impact decision making on corporate growth and market valuation, corporate creditworthiness, and bond rating. Risk assessment informed by Conditional Value-at-Risk (CVaR) measures is described, and the role of the financial services industry is characterised. A corporate decision framework is discussed in the context of water resources management strategies under complex uncertainties.
Globally, corporations and industry are seeking to secure access to sufficient quantities of water to meet current and future needs in a socially, economically and environmentally responsible way in the midst of an unfolding global water crisis with risks that transcend communities, industry and the environment. Through a business case centered on sustainability performance, risk management and productivity and through implementation of a strategic framework based on a water mass balance at the enterprise level, industry can take actions that support restoration of a sustainable water balance at the community and watershed levels while also generating business value for that particular enterprise. Within this framework, the volume of consumptive water use is used to establish the target water volume that an enterprise would balance through implementation of community water partnerships (CWP) that provide water access and sanitation, watershed restoration and protection, and water for productive use benefits. Quantification of CWP project benefits is achieved either through metering or standard methods known and accepted by the engineering, conservation, and social science professions. A 100% sustainable balance is achieved when an enterprise implements a portfolio of locally relevant CWPs that collectively produce an annual volumetric benefit equivalent to the annual volume of consumptive water use for that particular enterprise.This approach can also support efforts by industries that seek to operate in a manner consistent with the United Nations resolution regarding the human right to water and sanitation, as well as those that may seek certification under emerging global water stewardship standards.
The Missouri River Basin (MRB) functions as the "life zone" for the larger Mississippi River Basin, providing grassland habitat that infiltrates precipitation and recharges groundwater, reduces sediment erosion, filters nutrients, stores carbon, and provides critical habitat for wildlife. The role of this region as a producer of food and fuel, both nationally and internationally, creates unique challenges for conservation. To support conservation efforts and sustainable management of this invaluable resource, a large-scale, screening-level evaluation of the water quantity and quality benefits of land conservation efforts in the MRB was performed. This paper describes the development and application of a Soil and Water Assessment Tool (SWAT) model to the MRB study area to provide estimates of water quantity and quality (sediment, total phosphorus, total nitrogen) benefits from the avoided conversion of intact grassland to cultivated cropland. The results of this study indicate that the avoided conversion of grassland to cropland could potentially prevent more than 1.7 trillion gallons of surface runoff as well as prevent the export of approximately 46 million tons of sediment, 87 million pounds of total phosphorus, and 427 million pounds of total nitrogen from the MRB study area landscape every year.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
hi@scite.ai
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.