YtDl2r

Risks that can be
influenced by a company
Risks that can be
influenced by basin
stakeholders
Physical risk Regulatory risk Reputational risk
»»
Disruptions or declines »»
Stricter regulation and »»
Reputational risk is
in water supply limit increased enforcement particularly high as a
industrial use for production,
by governments may result of accidents, spills,
material processing, increase cost for fresh-
or product impacts
cleaning, and especially water and wastewater on water resources
cooling, which demands treatment and discharge and environment (e.g.
the most water
- Lawmakers may force Union Carbide factory
- As the industry’s
companies to use explosion in 1984 in
manufacturing footprint innovative production Bhopal, India J )
expands to more water-stressed
technologies to reduce »»
Governments, com-
regions of impact on water
munities, NGOs and
the world including the - Impact of potential companies looking at
Middle East, India, and price increases is their own supply chain
China, water scarcity significant, considering footprint are increasingly
will become a greater the required volumes concerned with the high
issue
»»
Companies must
amount of chemical
- Highly polluted water
discharge and potential
may require on-site
negative impacts on
water purification for
water resources and
operations
surrounding ecosystems
»»
Freshwater availability
(quantity) under pressure
due to increasing
demand from other
basin users
- As the chemicals
industry shifts to areas
facing severe physical
and economic water
scarcity, companies
competing with local
communities could
lose their license to
operate
»»
Other basin users
may pollute freshwater
sources (quality)
»»
Increasing air and water
temperatures imply
more water needed for
cooling and operation,
while evaporation
of water sources is
increasing
comply with numerous
international, regional,
and national standards
- The EU’s Water
Framework Directive is
driving the phase out
of 33 priority chemicals
with the goal of improving
water quality in key
river basins. The EU
legislation, REACH,
places greater responsibility
on industry to
manage the risks to
the environment and
health
»»
Large multinationals
often easy targets for
(local) governments
- Local companies often
favoured over large
multinationals for e.g.
taxes and regulation
»»
No or limited regulation
or no or limited enforcement
by local governments
can impact water
quantity and quality
»»
If operating in a multi-national
basin, differences
in regulations and
enforcement per country
can have greater impact
on water quantity and
quality downstream
»»
A company can lose
its license to operate
or incur higher costs
because of changes in
water rights, pricing, and
wastewater treatment
requirements
»»
Conflicts with local communities
over access to
water threaten license to
operate and damage to
brand image
»»
Waste discharge on
water quality, with
consequences for
downstream users and
aquatic ecosystems
»»
In case of local water
scarcity or wastewater
pollution in the basin of
operation, reputation of
especially large multinationals
is vulnerable in
local communities
»»
End user (consumer)
pressure not to buy
products in troubled
basins
147, 148
Table 11. A general overview of water-related risks for the chemical sector
J
Dow Chemicals, which acquired UC, was ordered by the state of Maharashstra in 2009 to relocate a proposed research
THE IMPORTED RISK Germany’s Water Risks in Times of Globalisation | 47