Water scarcity can have a sizeable impact on our manufacturing operations. Although we do not need as much water as some other industries, we use water in many key manufacturing phases in our plants. We cannot be certain that we will always have access to the water we require. Our analysis shows that some of our facilities are located in regions where water supplies are under stress. And global climate change has the potential to further impact the availability and quality of water.
Historically, water has been a relatively inexpensive resource. But that’s changing, and the cost of using water is expected to continue to increase in the coming decades. For a manufacturing company like ours, that would mean higher operating costs. Already, in some locations, rate increases from 2000 to 2012 outpaced water reductions, and our costs will continue to rise if we don’t make further improvements. From a business perspective, it is important to strategically reduce water consumption now, before we see significant price increases or the implementation of further water use restrictions.
Increasing water scarcity means industrial needs can be at odds with community and environmental needs. Industrial facilities in water-stressed areas will have reduced access to water and/or may endure rising water costs. Working on solutions helps us to secure a “license to operate” in diverse global locations and can enhance our reputation in local communities.
Our suppliers face similar risks in terms of the increasing cost and competition for water and community concerns in water-scarce areas.
Another possible risk for Ford is the water intensity of alternative fuels, such as biofuels and electricity, which may require greater amounts of water to produce than gasoline and diesel fuel. We are continuing to assess the consequences for water quality and availability that may result from the increased production of electrified vehicles, including hybrid, plug-in hybrid and battery electric vehicles.
Water services are the most capital-intensive of all utilities, requiring more infrastructure for the delivery of water than the delivery of electricity, for example. According to the World Bank, a $400 billion to $600 billion investment will be needed in global water infrastructure in the next two decades. Meanwhile, the United Nations Educational, Scientific and Cultural Organization (UNESCO) estimates that between $111 billion and $180 billion will be needed per year to meet Millennium Development Goals for sanitation by 2015.1
In the U.S., the Environmental Protection Agency estimates the country will need to invest $202.5 billion over the next 20 years in wastewater facilities, and an additional $122 billion to ensure safe drinking water supplies.