Tackling trade-related water risks

Think tank: Chatham House

Author(s): Silvia Weko; Glada Lahn

March 26, 2024

This report from UK think tank Chatham House looks at how importing countries can address water stress from global commodity production.

A combination of climate change impacts and the production of water-intensive commodities, such as food, textiles and minerals, is exacerbating global water insecurity.

Around 50 per cent of the water used to produce goods imported into the Global North comes from countries with significant water scarcity, mostly in the Global South. As the situation worsens, there are few applicable legislative or regulatory options that can improve water sustainability at production sites.

Through the use of case studies, this paper explores available approaches to boost sustainable and fair use of water at sites of production, including company disclosures, due diligence and market access standards. Importer countries are in a strong position to insist on better water standards due to the unequal power dynamics between sellers and buyers.

However, improving water standards at production sites will require trust, finance and capacity-building to enable producers to adhere to changes in policy.