Study: Companies Underestimate Dependence on Water Availability
A new study by BDO and NABU reveals that German companies underestimate their dependence on water availability and river systems. Only 34 percent of directly dependent companies consider water a material issue.
German auditing firm BDO AG Wirtschaftsprüfungsgesellschaft and the nature conservation association NABU have released a study indicating that many German companies underestimate their fundamental reliance on water availability and functioning river systems. The study, titled "Unternehmen in Flussgebieten" (Companies in River Basins), analyzed 160 listed companies and their German locations.
The findings suggest that while industries and transportation are fundamentally dependent on river systems for cooling, process water, and logistics, this reliance is not adequately reflected in corporate strategies or sustainability reporting. Specifically, 34 percent of companies with a high degree of water dependence, due to their location and business model, do not currently classify water as a material issue.
This underestimation poses a significant risk to Germany's economic stability, as business operations are directly linked to the health and availability of river ecosystems. The study highlights the necessity for companies to better integrate water-related risks into their risk management and long-term strategic planning.
BDO and NABU urge companies to conduct more thorough assessments of their water footprint and associated risks. A lack of awareness or underestimation could lead to operational disruptions and financial losses in the future, particularly as climate change impacts water availability.