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Water risks in consumer durables: essential resilience steps

Strengthening defences against water-related disruptions in consumer durables with advanced planning and innovative technologies

Nature & climate risks

Consumer durables

Publication date: 12 June 2024

By Eye For Business

AT A GLANCE

  • Water risks, such as floods and droughts, pose significant threats to the consumer durables sector.

  • Mitigating these risks is crucial to supply chain stability, reducing losses and ensuring operational continuity.

  • Long-term resilience requires integrating risk assessments and technological advancements into strategic planning.


Recent business disruption from floods in Europe and Asia has underscored the need for the consumer durables sector to address water risks, which threaten supply chains and operational continuity. Both acute and chronic, water-related risks are increasingly recognised as significant threats to the sustainability of the consumer durables value chain, impacting everything from manufacturing processes to supply chain logistics. Organisations can enhance supply chain resilience by conducting comprehensive climate risk vulnerability assessments and integrating modelling tools like the WWF Water Risk Filter to understand and mitigate future water risks.

Comprehensive risk check

Risk assessment is crucial for understanding water-related risks. The TCFD highlights the importance of assessing acute and chronic physical risks, which can result in reduced revenue, increased operating costs and higher insurance premiums. In accordance with CDP Climate Change disclosure 2.2a, the temporary unavailability of a production site due to water risks is a commonly recognised risk for consumer durables organisations. Insurers often demand regular, site-specific assessments as a condition of maintaining coverage.

Strengthening defences

Building resilience involves implementing practical measures to protect against water-related disruptions. The WEF suggests strategies such as developing stronger infrastructure, early warning systems and flood control measures to build adaptive capacity. Organisations like JD.com have proactively created well-structured emergency plans to cope with sudden weather conditions, including floods and heavy rains. These measures help businesses absorb, recover from and adapt to adverse water-related events, ensuring operational continuity.

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Technology-driven solutions

Technological advancements are pivotal in enhancing water risk resilience, particularly in the Global South. Google is collaborating with the World Meteorological Organization (WMO) to bring AI-powered flood forecasting to every country, significantly improving flood detection accuracy. Additionally, the WWF Water Risk Filter has recently been extended to include scenarios aligned with TCFD and EU NFRD recommendations, helping organisations anticipate future water risks and plan accordingly. These tools can reduce organisational risk.

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Strategic foresight

Organisations must integrate climate risk assessments into their strategic planning for long-term resilience. Risk-based monitoring tools and approaches are critical in order to evaluate resilience under different scenarios, which can inform long-term organisational strategy for coping with varying climate conditions. By performing detailed scenario analyses, businesses can test their water stewardship responses against plausible future scenarios and shape strategic decisions to build resilience and mitigate uncertainty.

FURTHER READING