Water scarcity is rapidly emerging as the next big sustainability challenge for businesses, demanding the same urgency and focus once reserved for carbon

For years, carbon has dominated the sustainability agenda. Businesses and organisations have invested heavily in reducing emissions, aligning with national and global commitments to control and mitigate climate change. But a new challenge is fast emerging – one that carries just as much weight, and in some cases, even greater urgency.

Water scarcity is becoming an increasingly critical issue, not only for scientists and ecologists, but also for business leaders who must now recognise the risks it poses to their operations, supply chains and financial stability.

Why Water Scarcity Matters

As global demand grows and climate change intensifies supply pressures, water scarcity is creating operational vulnerabilities across every sector reliant on a stable water supply. The rise of artificial intelligence is a striking example: the data centres that power AI models consume enormous volumes of water to cool their servers. In the UK, industrial and commercial activity accounts for significant water usage, placing additional stress on an already strained system.

The consequences of water scarcity ripple far beyond the environment. Regulatory shifts are on the horizon as governments seek to safeguard limited resources, and businesses that fail to adapt will face higher costs, disrupted supply chains and reputational risks. In short, it’s time for water to receive the same attention carbon has commanded for the past decade.

The Case for Water Stewardship

Forward-thinking organisations are beginning to adopt water stewardship as a cornerstone of their sustainability strategies. This means understanding not only the water flowing from taps in offices or factories, but also the hidden water use embedded in supply chains, production processes and digital infrastructure. Mapping and documenting water consumption is the first step toward identifying risks and opportunities for efficiency.

Looking Beyond Your Walls

Just as carbon reporting has pushed organisations to assess their broader environmental impact, water stewardship demands attention to supplier behaviour. Businesses should ask tough questions of their suppliers: what are their water policies? How do they measure and report their use? Are they aligned with recognised frameworks such as the Water Footprint Network or CDP’s water disclosure programme?

Preparing for Regulation

It seems inevitable that water regulation will change in the near future. Governments will have no choice but to intervene more heavily as scarcity intensifies. With regulation often comes price increases, usage restrictions, or mandatory reporting. Businesses that prepare now by reducing dependency, improving efficiency and embedding water stewardship into their sustainability strategies will be better positioned to absorb these changes.

The shift from carbon to water as a central sustainability issue is not a matter of if, but when. By treating water with the same seriousness given to carbon, organisations can prepare their teams, protect their operations and secure a more sustainable future. The time to act is now.