Water is becoming a business risk. Is it changing business decisions?

Water risk becomes hard to ignore when it affects a factory, a supplier or a transport route. A company may face too little water for production, too much water at a site, or water quality that makes an essential process more difficult. These are practical business problems, yet recognizing them does not automatically change investment or planning.

Interviews conducted by SIWI at World Water Week 2026 show both sides of that picture. Some businesses are changing how they manage their facilities and resources. Others still need better information about where their exposure lies, including beyond their own operations.

When risk changes the plan

At Alfa Laval, water has begun to shape decisions about both production and property. CEO Tom Erixon describes recycling process water at operating units in water stressed regions. The company is also assessing flood exposure across its sites and building protective measures into its long term plans.

“When we are mapping climate risk around the world in all our units, the main risk that we are looking at related to climate change is flooding,” Erixon said. He added that taking action across the company’s properties “is now part of our long-term plan. It wasn’t two years ago.”

That change matters because it moves water from a general sustainability concern into choices about facilities, operations and business continuity. Erixon’s account also shows that responses need not begin with a large infrastructure project: process water can be recycled unit by unit. His example is evidence of action within one company, however, rather than proof that businesses as a whole have made the same shift.

The risk may sit beyond the company

A business can manage water carefully at its own sites and still depend on suppliers in places facing scarcity, floods or deteriorating water quality. Joe Ray, Head of Water at CDP, argues that companies and financial institutions need to see through their supply chains to understand where goods are sourced and where suppliers source in turn.

That requires more than a single figure for water use. Water risk depends on conditions in a particular river basin or watershed: the area from which water drains into a shared system. The same amount of water used in two places can carry very different risks because local availability, quality, infrastructure and competing demands differ.

Better information can change procurement and investment decisions. Without it, a company may measure its direct water use while missing a vulnerability elsewhere in its value chain. Ray’s point is also an opportunity: greater visibility can help businesses and suppliers work together on resilience in the places they share.

What businesses need to act

Companies cannot address every water risk by themselves. Jessika Roswall, European Commissioner for Environment, Water Resilience and a Competitive Circular Economy, says businesses ask policymakers for predictable rules and data they can trust. They need to know both what is expected of them and which risks they are dealing with.

Those requests connect company decisions with public responsibilities. Water infrastructure, regulation, research and reliable information all affect whether businesses can plan and invest with confidence. The European Water Resilience Strategy places water resilience alongside economic competitiveness, but its effect will depend on how policy is put into practice.

There is also a stronger business case for acting early. SIWI’s Thomas Rebermark points to opportunities in water reuse, monitoring, more resilient transport and the restoration of watersheds. These measures can help a company stay operational during disruption while delivering benefits beyond a single site. The benefits and costs will differ by place, so each investment needs to respond to local conditions.

From awareness to decisions

The answer to the central question is therefore yes, but unevenly. Alfa Laval’s changes show that water risk can alter operational and long term plans. Supply chain exposure, meanwhile, shows how much remains difficult for companies to see. Action depends partly on decisions within businesses and partly on the information and conditions that governments and other actors help provide.

Finance is beginning to respond to the same pressures. Christopher Flensborg, Head of SEB Water, says the conversation in his sector has moved from explaining why water matters towards asking how to act and invest. That is a meaningful change in attention. The test now is whether it helps turn individual responses into decisions that protect businesses, communities and the water resources they share.