Article

How will a water shortage impact your business?

Sarah Ryther Francom

June 6, 2013

Utah’s increasingly tight water supply poses significant risks to the state’s future. In our cover story, writer Gaylen Webb explores some of the water-related challenges unique to the state. From Utah’s growing population to its aging infrastructure to conflicts between counties and with our neighboring states, Utah’s water challenges are complex and impactful. And though we’re not in dire straights yet, without thoughtful and forward-thinking planning, Utah could be in a world of hurt in the not-so-distant future. You can find Webb’s story on page 62.

In many ways, Utah is a proactive state that diligently and strategically plans to avoid would-be problems; the state’s economic stability during the Great Recession is one example of effective management. But in other ways, the state falls short in its efforts to ensure a bright future. Planning for water scarcity is one area that needs improvement.

In a report recently published by the Natural Resources Defense Council titled “Ready or Not: How Water-ready is Your State or City,” Utah was ranked as one of the nation’s most “woefully prepared” states related to its water planning. The report argues that the negative implications could weaken Utah’s overall economy. For example, companies looking to relocate to the state might think twice upon learning of the state’s water-related issues. And local companies that use water as a critical component of their operations (like agriculture, mining and metals) will experience their own set of hurdles. The report finds that Utah faces a potential loss of $10.5 billion in GDP and 72,000 jobs by 2050 due to reduced water availability.

Many businesses are already feeling the heat. An Ernst & Young report titled “Six Growing Trends in Corporate Sustainability” finds that natural resource constraints are now impacting businesses due to, “limited supplies, geopolitics, price rises or sustainability concerns.” The report also finds that 76 percent of businesses anticipate their company’s core business objectives will be affected by natural resource shortages within the next three to five years.

The good news is many businesses are becoming more conscious of their environmental footprint and are working to increase their sustainability efforts, including those related to water conservation. According to the Ernst & Young report, 51 percent of companies already have water reduction goals and 31 percent plan to have such goals in place within the next five years.

If you haven’t already started thinking about how a water shortage could negatively impact your organization, Ernst & Young offers questions to consider: Are your company’s production processes, or those of key suppliers, vulnerable to water shortages? Does your company’s long-term strategy take into consideration whether water is a critical component of sustainable and reliable operations? Are possible water issues included in your risk assessment and mitigation plans? What are the water footprints of your organization and products, and how can you reduce them?

As the nation’s second-driest state, Utah has its own set of water-related challenges. Utah’s policy makers and business leaders have an opportunity to guide the state in a direction that will ensure these challenges don’t darken Utah’s bright economy.

From the Editor

Sarah Ryther Francom

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