Water Risk Is Rising Across Agricultural Supply Chains

Water is becoming a more urgent business issue for companies with agricultural supply chains. While many organizations have focused on climate targets, deforestation and regenerative agriculture, water-related risks are now moving closer to core procurement and resilience planning.

For businesses that rely on crops, fiber, food ingredients or other agricultural commodities, water scarcity, flooding, degraded watersheds and changing growing conditions can affect supplier reliability, input costs, sourcing decisions and long-term growth. These pressures are no longer limited to sustainability teams. They are increasingly relevant to procurement, operations, finance and risk management.

Bluerisk, a water strategy and data analytics consultancy, has released a new guide to help companies approach these risks in a more structured way. Titled Accelerating Water Action in Agricultural Supply Chains: Practical Steps for Building Supply Chain Water Resilience, the guide sets out a four-part process for companies to assess risk, prioritize action, make commitments and implement practical measures.

Agriculture accounts for more than 70% of global freshwater use, making it a key focus area for any company with exposure to food, beverage, fiber or agricultural raw materials. International crop trade can help reduce pressure on water systems by shifting production to regions where water use may be more efficient. However, that benefit depends on stable trade flows, which are increasingly affected by climate disruption, geopolitical uncertainty, regulation and water stress.

The challenge for businesses is not only identifying where water risk exists. It is turning that information into practical decisions on sourcing, supplier engagement, investment and reporting.

From Risk Assessment to Practical Action

Bluerisk’s guide is designed for companies at different stages of supply chain maturity. Some businesses may already have detailed visibility across suppliers and sourcing regions. Others may be working with limited data, fragmented supplier information or competing sustainability priorities.

Rather than setting out a single route, the guide provides a framework that can be adapted across different commodities, geographies, suppliers and operating models. That flexibility is important because water risk varies heavily by basin, crop, local governance conditions and production context.

The guide also connects water action with emerging disclosure expectations, including frameworks such as the Task Force on Nature-related Financial Disclosures and the European Sustainability Reporting Standards. This reflects a wider shift in corporate sustainability: companies are increasingly expected to show not just where nature- and water-related risks sit, but how they are being managed.

For procurement, sustainability and water stewardship teams, the value of this approach is its focus on usability. Reporting frameworks can help companies disclose risk, but they do not always support day-to-day supply chain decisions. Bluerisk’s four-step model aims to bridge that gap by linking assessment with implementation.

The guide was developed with input from an external advisory group that included organizations across food, beverage, agriculture, conservation and water stewardship.

Its launch also highlights the growing interest in moving water strategy beyond broad ambition. The guide was introduced during a virtual Water Talk hosted by Kilimo, with participation from PepsiCo, Nature’s Pride, The Nature Conservancy, Bluerisk and Kilimo.

For companies with agricultural exposure, the business case is becoming clearer. Water risk can influence crop yields, supplier continuity, cost management, regulatory readiness and brand trust. Bluerisk’s guide gives businesses a practical starting point for building water resilience before disruption becomes more expensive to manage.