European firms confront water crisis

“Water and energy are two sectors that are intrinsically linked,” according to its Vice President, Rachel Kyte. [Serg64/Shutterstock]

Throughout the EU, companies are coming to grips with global water shortages linked to CO2 emissions. reports.

A study, led by the Carbon Disclosure Project to commemorate World Water Day, analysed 70 European companies in mainland Europe. Response rates were diverse: only one in two energy companies responded, whereas the materials, consumer staples and utilities sectors saw response rates of close to 90%.

Results show water shortages are a real source of concern. According to the European Commission, 11% of Europeans and 17% of the continent have already been affected by water shortages in a way or another.

According to the CDP study, 83% of the companies surveyed report having operations located in water-stressed regions. Electricity and water sectors say that they have identified water-related risk in all of their operations, while companies involved in energy exports believe that water-shortages only concern one third of their operations.

73% of European companies are worried about water-shortages affecting their supply chain.

In 2011, German electricity supplier E.ON experienced a reduced water flow for hydroelectric power generators, which led to a 9% drop in its electricity production.

Water-shortages, floods and CO2 emissions

Floods, which have been widespread across Europe in the past years, also constitute water-related risks.

Certain companies fear damage to their reputation vis-à-vis water treatment. German chemical company BASF established a code of conduct for waste treatment and toxic leaks, primarily aimed at developing countries, where rules are lax.

77% of companies believe that there is a relationship between CO2 emissions and water, insofar as water demand sometimes leads to additional CO2 emissions.

According to the World Bank, water and energy elements are closely related: energy production processes require water (oil, shale gas, hydroelectricity, nuclear energy) while energy is necessary for water extraction, treatment and transportation.

In recent months, the World Bank has tried to highlight the water/energy dialectic. “Water and energy are two sectors that are intrinsically linked” according to its Vice President, Rachel Kyte. “Whilst both resources are witnessing increasing global demand, and we are confronted by the difficulties of global warming, water-shortages threaten the long term viability of energy projects, and will have grave consequences for development”.

Likewise, Energias de Portugal highlights that the degradation of incoming water quality results in more energy consumption in pre-treatment operations and pumping, thus increasing carbon emissions.

Although companies are becoming more aware of the water problem, they struggle to deal with it. CDP claims that it is a good start, but focusing only on how much water a company uses “will reveal little about the impact a company is having on water resources without being set in the context of where and when the water is used”.


The Carbon Disclosure Project began as an international organisation concentrating on evaluating emissions of greenhouse gases. CDP evolved into the role of proposing indicators and ratings to companies on CO2 emissions as well as other environmental factors, notably water.

Further Reading

Carbon Disclosure Project