As companies respond to droughts, trade restrictions and other disruptions by shifting sourcing regions, water risk can move with them. Photo by NFB/Getty Images

One in five. That’s the share of major companies that, according to CDP’s Global Water Report, have already identified water risks in their supply chain serious enough to put tens of billions of dollars in value at stake. More than 3,100 companies responded to the survey. Yet the integration of water into supplier management remains limited. Only a small fraction factors water performance into their sourcing criteria. Across much of the supply chain landscape, water still functions as background information rather than as a decision variable.

That figure helps explain something that repeats itself every time a supply chain gets disrupted: trade restrictions, a disruption that knocks a port temporarily out of operation, a drought that leaves a harvest below expectations. Buyers don’t stop buying wheat, coffee, cotton or almonds. They switch origins. A soybean order that used to come from one region starts coming from another. A produce buyer who depends on a given region shifts volume to a supplier several time zones away. They do it in days, sometimes in hours.

Those decisions get made fast and with limited information: price, available capacity and lead time. Almost never water. And that’s not because nobody cares about water—it’s because the data isn’t always available at the moment the decision has to be made. The information may exist in a report, a risk assessment or a basin analysis and still not be built into the concrete decision of where to source from next week. There is still a significant gap between measuring a risk and being able to use that data in an operational decision.

That’s the blind spot. Switching origins can resolve an operational emergency, but it doesn’t necessarily build long-term resilience. When that decision doesn’t account for the conditions of the basin now absorbing new demand, the supply chain’s water exposure can shift too. A hydrological analysis of domestic agricultural trade in Asia shows this clearly: changes in production regions can reshape how water demand is distributed across territories. One region reduces its dependence on certain local resources while another begins to sustain higher levels of production.

The same logic applies to supply chains that operate across multiple regions. When a shift in availability, production or sourcing conditions prompts a search for a new origin, the water dimension of the chain shifts as well. The product may be the same. So may the volume. But the basin is different, with different water availability, different uses of the resource and different production conditions. Looking only at continuity of supply tells you whether the chain is still functioning. It doesn’t necessarily tell you how its water exposure has changed.

This isn’t negligence. It’s structural. Agriculture is, at once, one of the most water-dependent sectors in the global economy and one of the hardest to map at supply-chain scale. Irrigation, nitrogen and phosphorus runoff, declining water tables—dependencies and impacts vary from one basin to the next and aren’t always visible at the moment a sourcing decision gets made. Two suppliers of the same crop can deliver an equivalent product while operating in entirely different water contexts.

Over the past decade, emissions measurement moved toward defined scopes, reporting standards and greater comparability across companies and across years. For water, the challenge is different. Tools, metrics and assessment frameworks exist, but local context matters in a way that makes it harder to translate that information into a global sourcing decision. A cubic meter of water doesn’t mean the same thing in every basin. Availability, seasonality and competing uses of the resource change the context of every decision.

That’s why, when a decision has to be made quickly, folding the water dimension into the same analysis as price, available capacity or lead time remains a challenge—even more so when the decision means moving from one producing region to another. The question is no longer just how much water a supply chain uses. It’s also where, when and under what conditions.

Governments are starting to take notice, and they’re doing so with vocabulary that, until recently, wasn’t used to talk about water. The European Union’s 2025 Water Resilience Strategy frames water as a matter of economic competitiveness and strategic autonomy—language that, until recently, was reserved almost exclusively for energy. That shift in vocabulary is worth watching closely because it isn’t rhetoric. The moment water enters the language of competitiveness, it becomes a variable that trade policy, industrial policy and capital allocation will have to reckon with, whether individual companies are ready or not.

Water is the connective tissue between territory, agriculture and supply chain resilience. It sustains operations, but demand on the resource can also shift from one basin to another. Contracts, suppliers and contingency plans built to respond to a temporary drop in availability can meet an immediate need without ever making visible how the chain’s water exposure has changed.

The companies likely to be caught off guard by the next disruption aren’t necessarily the ones sourcing from water-stressed regions. Many are, somewhere along the chain. They’re the ones that still don’t know where that exposure lies, because they never had to check before switching origins.