The overlooked water risk of supply chain disruption
A few months ago I got on a call with a sourcing director who had never once thought about water. He didn’t need to. His almond supplier in California had come up short, and someone on his team had already found a grower in Chile who could ship the same volume, at a similar price, in two weeks. Problem solved. Nobody asked where the water for that shipment was coming from, or whether the basin behind it had any to spare.
Read also: How Trade Fragmentation is Reshaping Global Sourcing
That’s not a knock on him. It’s how the job works. When a production line is about to run dry, price and capacity and shipping dates take over the whole conversation. Water doesn’t get a seat at that table, not because it’s unimportant, but because there’s rarely a number to bring to it. Carbon has a spreadsheet. Water mostly has a guess.
I saw the gap up close a few years back in Chile’s Maipo Valley, which grows almonds under conditions close enough to California’s Central Valley that a buyer can swap one for the other without blinking. Same climate, roughly. Same soil. Same reason a shipment gets rerouted there when a harvest in California comes in short. A water team working with growers in Maipo started doing something almost embarrassingly simple: reading the irrigation logs. Season to season, the water applied to the exact same almond variety swung across a wide range, not because farming had changed, but because the basin’s water that year had changed. Two harvests. Same crop. Same buyers on the other end. Completely different water story behind each one.
That’s the part a purchase order will never show you. An almond from Maipo and an almond from California can be identical by the time they land in a warehouse: same size, same grade, same price per pound. One of them grew in a year when the basin had water to spare. The other grew in a year when farmers were rationing it acre by acre. A sourcing decision built on cost and delivery time has no way to tell you which is which. And when a company shifts volume from a basin that’s short to one it assumes is fine, it isn’t reducing its water exposure. It’s trading one basin’s water story for another’s, sight unseen.
We built reporting standards for carbon over the last decade, and a shared vocabulary to go with them, one a buyer in Rotterdam and a grower in Córdoba can actually use to talk about the same thing. Nothing close to that exists for water. So the data a sourcing team would need to compare two basins on water risk usually just isn’t there. Not because nobody wants it. Because very little of it has been built for the decisions sourcing teams actually have to make.
The issue isn’t the sourcing shift itself. It’s making that shift without knowing whether the new basin is more or less water-exposed than the one it’s replacing. Yet basin-level water — how much is available, how it’s trending, who else is drawing from it, and how exposed the new site is by comparison — almost never makes the checklist. CDP’s most recent water disclosure found that roughly one in five major companies had already flagged supply chain water risk serious enough to put tens of billions of dollars on the line, and a large share still weren’t even talking to their suppliers about water. That gap doesn’t close itself.
The next disruption that scrambles a supply chain won’t send a memo announcing itself as a water problem. It’ll look like a delayed shipment, or a drought that shows up in a harvest report months after the damage was already done. But the decision made in the middle of that scramble, which region to lean on, which supplier to trust with the volume, will carry a water exposure of its own whether anyone checked for it or not.
Companies that build the basin check into how they source and where they site production aren’t just managing one more environmental risk. They’re closing a blind spot their own resilience planning already assumes is covered.
About Jairo Trad
Jairo Trad is a Computer Engineer, Data Science specialist, and World Economic Forum Young Global Leader driving the intersection of AI and water security. As CEO and Co-Founder of Kilimo, Jairo has scaled a technical vision into a global leader in water stewardship, overseeing projects that have restored over 282 million cubic feet of water. With deep expertise in predictive modeling, he translates complex climate data into high-precision decisions that bridge the gap between corporate goals and farm reality, building scalable, engineering-first solutions to protect our most critical resource. Learn more at www.kilimo.com/en/
