ICT supply chains face high risk due to water quality

A new report from a coalition industry groups and NGOs is raising awareness on the impact water has on ICT supply chain locations.

The risk of poor water quality

A high number of ICT supply chain locations face high risks from potential water challenges.

That’s according to a report entitled 'Water Risk in the ICT Sector: The Case for Action'.

Co-authored by the Alliance for Water Stewardship (AWS), the Responsible Business Alliance (RBA) and World Wildlife Fund (WWF), the document aims to raise awareness of the impacts water has on ICT supply chains.

The report found that of 3,300 ICT supply chain locations surveyed, 68 per cent face high to very high levels of risk due to water quality.

Furthermore, over 50 per cent were deemed at very risk for flooding, and just under 40 per cent were high risk for ecosystem service status - where the benefits of the local environment to humans have become compromised.

“The report found of 3,300 ICT supply chain locations surveyed, 68 per cent face high to very high levels of risk due to water quality.”

These locations were chosen to represent all levels of the electronics supply chain and were broken down into three main categories, including physical, reputational and regulatory.

Each of these categories combined results were then classified into an overall risk using a scale of very high, high, medium, low and very low.

“The growing demand for technology means that the ICT sector has the potential to have a significantly larger impact and dependency on water in the future,” said the authors.

The report comes out at a time where other ICT industry leaders including Microsoft and Intel have revealed the progress to not only improve their water operations but to take a more proactive approach when it comes to water stewardship ambitions.

Water's impact on the ICT supply chain

Water is becoming an ever more increasing resource for the ICT supply chain, used at every level, from assembly and testing to product design and even waste disposal and recycling.

"Brands are exposed to reputational and financial risk if they are found to be linked to a supplier that is having a negative impact on the environment."

The ICT sector comprises a diverse ecosystem of companies in terms of products and services, which the report argues makes it a challenge to single out a set of "typical impacts".

The report authors commented on the multiple risks facing brands with links to the supply chain.

“Brands are exposed to reputational and financial risk if they are found to be linked to a supplier that is having a significant negative impact on the environment, whether it is from local community outcry or heightened media scrutiny, creating customer concerns. This could hinder supply chain continuity and impact the delivery of products and customer/ client relationships."

"In turn, investors can be exposed to similar reputational and financial risks, if the companies they invest in are not sufficiently aware of their water impacts and fail to respond effectively.”

Google recently reiterate its intention to stick to its own water stewardship ambitions.

A battle cry for water stewardship

The report calls on businesses to "create opportunity and value through water stewardship" and challenged them to move away from water-saving ventures that focus on operational savings, to connect businesses to a broader systemic value for reducing risk and creating value.

For example, the report suggests ways in which this kind of collaboration on water stewardship could reduce the burden on suppliers:

Aligning as an industry via a shared understanding of how water impacts the ICT sector
Using a common approach to water stewardship to build capacity to respond throughout the supply chain
Creating a suite of common metrics to improve the efficiency of reporting, particularly in the supply chain
Identifying shared water risk hot spots and responding collectively through water stewardship training and engagement programmes in those locations, providing benefit to the sector and other water users in the basin
Incentivising adoption of water stewardship through procurement practices
Embedding water stewardship as a fundamental aspect of sustainability through industry initiatives and platforms.

For more information and to download the report, visit here.