# Why Water Management Has Become a Strategic Concern Global water crisis forces companies to rethink their strategies. - **Source:** [MIT Sloan Management Review](https://sloanreview.mit.edu) - **Published:** 2026-08-13 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/b1fc5c9d-3993-4cbf-842b-82b82677f991 ## Global Impacts of Water Scarcity Although 70% of the Earth's surface is covered by water, only 0.5% of it is usable. Rapid population growth, industrial use, and climate change are increasing water demand. In 2025, 35.8% of the U.S. experienced drought, and 30% of global land faced arid conditions. This poses serious threats to health, economic development, and social stability. ## Corporate Dependence on Water Many companies view water as an operational resource but fail to treat it as a strategic factor. The food and beverage industry accounts for 20% of water withdrawals. Textile production is responsible for 20% of industrial water pollution. Sectors like AI data centers and green hydrogen, which rely heavily on water, threaten local water supplies. ## Water Pollution and Regulations Water pollution is rising due to agricultural runoff, pharmaceutical residues, and nanoparticles. France's PFAS ban, effective June 2026, mandates testing drinking water for these chemicals, which affect 12.5 million people in Europe. Companies face penalties for releasing harmful chemicals into the environment, increasing the stakes for water management. ## The Role of KPIs in Water Management Companies must establish new KPIs to improve water efficiency. Metrics like total water withdrawal, recycling rates, wastewater treatment, and watershed restoration should be monitored. Water stewardship must extend beyond company operations to supply chains. Agriculture, responsible for 70% of global freshwater withdrawals, is particularly critical. ## The Importance of Local Water Resources Water resources are stored in basins and aquifers, making scarcity a localized risk. Companies with extensive supply chains cannot rely on one-size-fits-all solutions. For example, a company with three sites in the U.S. Northeast may face varying water risks. Tailored strategies are essential to address local conditions. ## Water Risks Across Industries Not only large industries but also small businesses like car washes, restaurants, and healthcare face water risks. Construction, tourism, and sports sectors are also affected by shortages. Companies must recognize water's strategic importance to ensure sustainable operations and long-term competitiveness. ## Leadership in Water Management Executives are beginning to understand water's critical role in production and supply chains. Responsibility for water efficiency is expanding beyond operations teams to senior leadership. Strategic decisions must now account for water risks, integrating them into corporate planning and risk management frameworks. ## The Future of Water Management As water scarcity and pollution escalate into a global crisis, companies must prioritize strategic water management. Sustainable use of water resources is vital for both environmental and economic stability. By addressing water risks, companies can gain long-term competitive advantages and contribute to societal well-being. ## Sources covering this story - https://sloanreview.mit.edu/article/why-water-management-is-a-strategic-concern/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._