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Tool Sections: Overview Module 1 Module 2 Module 3 Module 4 Module 5
 
Key Questions to Assess Business Sensitivity to External Changes in Water Availability
 
 

The first step in conducting an initial risk assessment of a company's water uses is to evaluate the business "importance" of each identified water use. If a change in the current use would result in significant business constraints, then there may be some risk that should be addressed. Consider each water use identified in Module 1 to determine how sensitive the business is to external changes that could affect this water need. A business would be highly sensitive to a change if it, or the company’s response options, would result in significant business constraints. External changes can result in steep increases in water costs, production delays, limits on production, or strong community opposition to company activities. For each water use, consider how sensitive the business is to a change in 1) water price, 2) water availability, 3) water quality, or 4) the loss of a specific source. By exploring the business sensitivity to water-related changes, tool users should be able to make a qualitative assessment of the business “importance” of each use. Sensitivity to external changes can be assessed by considering the following questions:

  1. Source importance: How significant are the business costs of meeting this water need using alternative water sources? Are other water sources available? How long would it take to get other sources on line? What changes would be needed to production processes or services to accommodate the new source?
  2. Water price: How sensitive is the business to fluctuations in the price of water related to this use? What would the business impact be if the price of water doubled, or increased ten-fold?
  3. Water quantity: How sensitive is the business to fluctuations in the availability of water related to this use? What would the business impact be if water availability is reduced by 10%, 50%, or completely disrupted due to terrorist activity or natural disaster?
  4. Water quality: How sensitive is the business to fluctuations in the quality of water available for this use? Would additional water treatment costs be incurred? Would it be necessary to seek alternative water sources?

For the Module 2 risk assessment, sensitivity to each issue can be assessed using simple "high, medium and low" ratings.

 

ResourcesReturn to Module 2