Water risk a reality for SA businesses

Water risks are no longer a distant threat for businesses; they are a present reality demanding immediate strategic attention.

In South Africa, which could face a water deficit of 17% by 2030, the urgent need for companies, government, and stakeholders to prioritise water stewardship has become critical as water constraints emerge faster and more unevenly than many organisations expect.

Data from CDP’s 2023 Global Water Report reveals that approximately 20% of companies globally reported $77 billion at risk due to water-related issues in supply chains, highlighting the urgent need for proactive water management in an increasingly water-stressed world.

Rather than viewing the water crisis as an abstract risk, Kudzayi Mazikana, Head of Sustainability at Nedbank Commercial Banking, cautions that its impacts are already materialising across the economy, often first appearing as operational disruptions, rising costs, and reliability challenges rather than the headline-grabbing ‘day zero’ events.

“Water stewardship is a non-negotiable given that South Africa is among the 30 driest countries in the world. It strengthens brand trust, improves ESG performance, and future-proofs supply chains. For businesses and all stakeholders, this means engaging in solution-based individual and collective actions that benefit people and nature,” says Mazikana.

“However, stewardship becomes meaningful only when translated into practical, executable actions rather than remaining at the level of policy intent or high-level commitments,” Mazikana adds.

Beyond investing in mitigation strategies, Mazikana emphasises that businesses need a practical playbook for managing water risks, including water risk mapping through granular, site-specific assessments.

“Effective water stewardship also requires businesses to adopt transparent water disclosures and set measurable targets, using recognised frameworks and data tools to benchmark and report performance. Water stewardship should form part of core sustainability performance, not just be a peripheral add-on,” Mazikana explains.

Financing water solutions

This shift towards strategic water stewardship is also driving innovation in financing mechanisms. Blended and sustainable finance instruments are being developed to scale water infrastructure projects, while financial institutions are increasingly recognising water risks in their lending and investment decisions, creating incentives for companies to demonstrate robust water stewardship practices.

Mazikana explains: “At Nedbank Commercial Banking, we offer sustainable and blended water finance solutions, including early-stage project preparation funding. The bank is also committed to participating in public-private partnerships to leverage private investment and expertise to rehabilitate and manage water systems effectively.”

“This collaborative approach is key to unlocking new opportunities and ensuring sustainable, innovative solutions to the water infrastructure crisis. By strengthening execution capability, governance alignment, and market confidence, water finance can move from a niche activity to a mainstream strategic practice,” Mazikana concludes.