Beyond the models: Assessing industrial resilience and water risks

Industry is increasing its focus on water risk and resilience. But where should organizations start to build a well-defined business case?

Two engineers, one male and one female, assess pipes in their industrial water system. One engineer tracks the data on a tablet

Resiliency is a growing focus for industry due to increasingly impactful climate-related events such as hurricanes and the severe effects they have on facilities. Given the fact these events cannot be predicted far in advance, coupled with the uncertainty surrounding how a site will be impacted, it’s difficult for industry to create a well-defined business case. This can prevent the necessary prioritization of risks and industrial resilience planning. 

I worked for 12 years as the technical water and wastewater expert for all manufacturing and research facilities – more than 500 facilities worldwide – for the General Electric Company. When I started at Arcadis after leaving GE, conversations about water-related risks with fellow former industry leaders kept coming back to what was keeping companies from preparing for climate-related events as well as they could. Most discussions came back to the challenges of developing a balanced understanding of water-related risk across a company’s global portfolio of sites. One thing was clear: Though often adopted as a strategy by industry, using one risk and resiliency planning model for large companies was preventing optimized resilience strategies. 

Limiting assessments to one model fails to capture the broad operational and regional differences between sites. For example, a company with sites in California likely faces the risk of droughts and wildfires – but the same company could also have sites in Texas that face risks from flooding. Plus, one model might weigh factors differently than another or fail to capture all relevant insights regarding a site, leaving gaps that go unaddressed.

A new approach to industrial resilience is needed. As climate-related events become more frequent and far-reaching, organizations need to develop more expansive water risk and resilience strategies that incorporate their unique needs.

Water risk assessment: 4 steps to analyze and mitigate water-related risks 

Large companies can’t focus on hundreds of sites at once, so where should an organization start when trying to reduce overall water risk? We typically have our clients begin with a water risk assessment that leverages research insights and a combination of models to find resilience-building opportunities.  

Step 1: Desktop analysis

Defining an organization’s water-related risks begins with an exploration of reputational risks. Has the media written any stories that portray a company in a negative light relative to water in a specific region? Have there been documented stories of water risk or water stress in that area that could increase scrutiny for that region? These are important reputational risks that need to be accounted for when creating a full assessment. 

Step 2: Water risk models

There are a number of readily available models that can be used to assess water risk. These models are designed to enable the user to gain perspective on the type and degree of water risk for a specified location. Each of these models tend to do a good job overall; however, none are perfect. Inaccurate results for some locations can be produced due to simplifications and/or assumptions used to create the model. As such, if an industrial company were to rely upon a single model for analysis of water risk across all of their sites they could end up with a skewed perspective due to inconsistencies across the sites. In this step we look at multiple models and weigh factors differently to work around the flaws of each individual model. 

Step 3: Site questionnaire

Geographic models provide useful insights, but they only cover what we call outside the fence line risks, such as water stress, drought, flooding, groundwater depletion, sea-level impacts and more. Inside the fence line risks – wastewater quality, water use, and other onsite elements – get overlooked. To capture the risk factors that the models can’t, we work with clients to complete questionnaires for individual sites. 

Step 4: Assess risks

For each site, a combination of model information, site feedback, and any learnings from the desktop analysis come together as story of what water risk looks like for that facility. Using the client’s input to weigh the data inputs, the assessment details the organization’s fingerprint relative to water risk by going category by category – flooding, water stress, water quality, and more. 

Sometimes sites are ranked, while other times each site is in a different category. This forms a roadmap of locations with the most risk relative to any given category in which the company is interested. Some sites have a very low risk because of a combination of where the site is located and the operations at plant, while other sites have a lot of risk. We provide initial guidance and high-level recommendations for next steps to begin addressing or mitigating the risks.

Sustainable water is a business decision

People often associate industrial resilience with flooding from hurricanes. But I have seen firsthand how it relates to sustainability as a whole and keeping businesses running in light of any climate-related event. Companies can sustainably manage a finite resource while supporting their bottom line by prioritizing risks, improving water efficiency and defining the true cost of water.

Brian Moore

Global Industrial Water Use Practice Leader 518 250 7289 Ask me a question
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