Freshwater availability is the greatest climate change and resource scarcity challenge facing large businesses worldwide today, according to a new report from the Carbon Trust.
Titans or Titanics? Understanding the business response to climate change and resource scarcity seeks to understand and explain how large businesses are responding to climate change and resource scarcity today.
The report states:
“Perhaps the greatest challenge exists in freshwater availability, where there are rapidly increasing and competing demand from communities, industry and agriculture. According to the World Economic Forum’s Water Resources Group there may be a 40% gap between anticipated demand and the safe and available supply by 2030, under a business-as usual scenario.”
Businesses are living in two realities: they recognise and accept the risks and opportunities of an environmentally sustainable future, but continue to focus on the short-term, the report says. Despite the perception that drivers for change will continue to become stronger in the near future, most businesses appear to have no clear vision on how to manage the transition effectively.
The report incorporates insights from qualitative interviews with industry experts, alongside independent market research into the views of global corporate leaders. It also details the Carbon Trust’s practical framework for assessing and quantifying the long term opportunity and risks related to climate change and resource scarcity.
The report reveals:
- 70% of global business leaders are confident that action taken by consumers, governments, and investors will force the change to an environmentally sustainable future.
- 76% see bottom line risks from direct impacts of climate change, and 84% see business opportunity in an environmentally sustainable future.
- Half believe they would have to fundamentally change products, services, or business models if drivers for environmental sustainability become strong.
- Of those that claim to be aware of how they compare with competitors on environmental sustainability, 99% believe they are at least average for their sector, with half seeing themselves as leaders.
The report cites a number of extreme weather events as exapmples, including:
- Flooding in Thailand in 2010 which resulted in rubber prices reaching a record high, impacting across number of industries – from rubber gloves to tyres.
- Flooding in the same country in 2011 disrupted hard drive disk production globally, which in turn had a knock-on effect on large numbers of electronic equipment manufacturers.
It also says that around the world there are high levels of political or social concern about issues such as deforestation, or the local impacts of water abstraction, that have cost companies their license to operate.
The insights are based on six months of in-depth interviews with a range of experts from business, finance, government, academia, and civil society. The Carbon Trust also commissioned independent market research interviews with 229 board-level executive decision-makers across five regions: the UK, South Africa, Southeast Asia, Latin America, and the USA.
Click here to download the report in full.
With the UK government demanding a 50% reduction in storm overflow spills by 2029, the era of reactive management is over. Speaking in the House of Commons on 21 July 2025, then environment secretary Steve Reed said, “This Government will cut water companies’ sewage pollution in half by the end of the decade.”
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