Utilities are failing to monetise the actual risk a fall in water supply could have on their business, according to a report by a Boston-based business group.

Investor’s group CERES said it found that many companies could not specify what affect a drop in water supply would have on business activities.

Californian utility PG&E Corp said in a 2008 report that if a drought was to occur, it would have to replace its hydroelectric station with natural gas – just one example of the scale of affect such supply risks could hold.

And Arizona’s Pinnacle West Capital Corp, which has a nuclear reactor in Palo Verde, said it relied heavily on wastewater to cool its reactor. Both Pinnacle and PG&E are in a minority when it comes to reporting back to investors how integral water is to operations.

Earlier, the US Securities and Exchange Commission said that companies, while communicating business risks to investors, should consider water availability and climate change.

The UN predicts that by 2050 40% of the world’s population will live in areas of water-scarcity, according to Bloomberg.

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