The Asia-Pacific (APAC) region is facing increasing water security risks that are rapidly turning water stewardship into a key Environmental, Social, and Governance (ESG) concern for businesses. Encompassing fast-growing urban centres to agriculture-dependent rural communities, this region grapples with water scarcity, pollution, and climate-induced variability. For organisations operating in APAC, integrating water management into ESG frameworks is no longer optional but rather a strategic necessity to de-risk operations, ensure social license to operate, and underpin resilient, sustainable growth.
The magnitude of water risks across APAC
APAC is home to over half of the world’s population and many of its most water-stressed countries, including India, China, and Australia. Adding to chronic problems of over-extraction, contamination, and inefficient use are factors such as rapid urbanisation, industrial expansion, and climate change. Some key water risks include:
- Physical scarcity: Increasing drought frequency and groundwater depletion pose a huge risk to manufacturing, agriculture, and human consumption.
- Regulatory risks: Stricter water regulations and penalties enforced by governments require compliance and forward-thinking management.
- Reputational and social risks: Water-related conflicts with local communities and NGOs jeopardise brand value and business continuity.
- Supply chain risks: Water-reliant suppliers are vulnerable to disruption, affecting product quality and availability.
Recognising these risks, APAC companies are shifting toward comprehensive water stewardship strategies integrated within their ESG agendas.
Why adding “W” to ESG matters for APAC businesses
Water stewardship in ESG frameworks facilitates:
- Resilience: Proactive management of water use reduces operational disruptions caused by scarcity or contamination.
- Efficiency: Water-saving technology and circular water use deliver cost savings and environmental footprint reduction.
- Social equity: Ensuring community water access and ecosystem health betters social license and stakeholder trust.
- Regulatory alignment: Compliance with evolving water regulations avoids penalties and supports sustainable growth.
- Investor confidence: Transparent water reporting enhances investor awareness of risk and opportunity, attracting sustainable finance.
How can APAC companies integrate water stewardship into ESG?
- Conduct comprehensive water risk assessments of operations and supply chains, identifying hotspots and prioritising action.
Example: Nestlé carried out water risk assessments in India, identifying high-stress areas and implementing watershed recharge projects to restore local water tables. - Invest in innovative water efficiency and recycling technologies, relevant to local water conditions and needs.
Example: PepsiCo’s APAC facilities use membrane bioreactor (MBR) technology to recycle up to 90% of process water, significantly reducing freshwater withdrawals. - Engage with local communities and stakeholders to ensure fair water access and ecosystem conservation.
Example: Hindustan Unilever’s check dam projects across India have improved water availability for thousands of farmers while boosting local crop yields. - Adopt robust water monitoring and disclosure best practices in accordance with international standards such as the CDP Water Security Framework.
Example: Samsung Electronics reports its water usage and risk management through CDP Water Security, giving investors transparency on progress. - Align water stewardship targets with broader climate and sustainability goals to reach maximum impact and resource synergies.
Example: Toyota’s APAC operations link water reduction targets with its 2050 Environmental Challenge, aligning water savings with emissions reductions.
How can Strategy&Ops assist APAC companies in ‘W-ESG’ integration?
- Designing customized water risk management frameworks that enhance ESG performance and comply with regional regulations.
- Facilitating multi-stakeholder dialogues that build inclusive water governance among businesses, governments, and civil society.
- Mobilising financing and technical expertise to drive innovative water-saving and circular water-use projects.
- Developing transparent water stewardship reporting and metrics that bolster investor relations and corporate reputation.
- Advising on strategic policy engagement to shape enabling environments for corporate water action.
The escalating water challenges across APAC demand big business to elevate water stewardship as a core ESG pillar. For organisations ready to lead in water-smart, resilient growth, contact Strategy&Ops at info@strategyandops.net to develop customised ‘W-ESG’ solutions that safeguard resources, communities, and long-term value.
#WaterStewardship #WESG #APACWaterRisk #SustainableBusiness #CorporateWaterResponsibility #WaterSecurity #InclusiveESG
References
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ADB. (n.d.) Asian Water Development Outlook Dashboard. Available at: https://www.adb.org/what-we-do/topics/water/asian-water-development-outlook-dashboard
Hindustan Unilever (n.d.) Project Prabhat Water Program. Available at: https://www.hul.co.in/planet-and-society/water/
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PepsiCo (n.d.) PepsiCo Advances Positive Water Impact. Available at: https://www.pepsico.com/our-stories/press-release/pepsico-advances-positive-water-impact
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The Institute of Internal Auditors (The IIA). (2025) Asia Pacific Risk in Focus 2025 – Board Briefing. Available at: https://www.theiia.org/globalassets/site/foundation/latest-research-and-products/risk-in-focus/2025/2025-apac-briefing-en-riskinfocus.pdf
The Institute of Internal Auditors (The IIA). (2025) Asia Pacific Risk in Focus 2025 – Full Report. Available at: https://www.theiia.org/globalassets/site/foundation/latest-research-and-products/risk-in-focus/2025/2025-apac-report-en-riskinfocus.pdf
Toyota (n.d.) Environmental Challenge 2050. Available at: https://global.toyota/en/sustainability/esg/challenge2050/
WaterPeaceSecurity. (2025) Global Tool Update August 2025. Available at: https://waterpeacesecurity.org/info/global-tool-update-august-2025