From risk to social benefit: three ways to transform water systems

Authors: Rod Naylor, Lindsey Brown, John Hensman, Don Holland

At a glance

Re-thinking water as enabler of positive social, economic and environmental outcomes.

Amplified by climate change, the risks posed by water in all its shapes and forms are obvious – floods, droughts, and mega storms. The increasing intensity and frequency of these weather events are creating an ever more urgent need to mitigate and adapt to the full spectrum of water risk, which is predicted to have a staggering impact on global economies, wiping 5.6 trillion dollars in GDP from the books by 2050.

Amplified by climate change, the risks posed by water in all its shapes and forms are obvious – floods, droughts, and mega storms. The increasing intensity and frequency of these weather events are creating an ever more urgent need to mitigate and adapt to the full spectrum of water risk, which is predicted to have a staggering impact on global economies, wiping 5.6 trillion dollars in GDP from the books by 2050.

However, the flipside to this story is just as compelling; the inherent potential of water to benefit humanity and uplift communities. This article explores opportunities to look at water differently – from menacing threat to value-adding enabler of positive social, economic and environmental outcomes. To highlight the approaches already being adopted by governments, communities, and companies worldwide, leaders across GHD outline three dimensions of transforming water systems from a social risk to a social benefit.

A shift to blue-green and nature-based thinking in our built environment

In the past, our built environments have relied on measures such as building levees, walls and dams and straightening and lining rivers with concrete, referred to as grey infrastructure, to prevent flooding. Grey infrastructure has proven to be effective in handling flood conditions when the volume of water can be anticipated. However, when uncertainty is encountered, and precipitation occurs outside of historical norms, these systems have proven woefully inadequate in protecting communities.

Another issue in urban areas is the dominance of hard surfaces, resulting in precipitation running rapidly into stormwater systems. As climate patterns shift, the volume of water that must be transported and treated by these systems is increasingly overwhelming those facilities. Furthermore, rainfall in such volumes is less able to infiltrate aquifers and recharge groundwater supplies, exacerbating diminishing groundwater sources and impacting dependent ecosystems and communities.

Meeting these evolving water-in-the-built environment challenges requires us to create a new breed of nature-based and ‘blue-green’ solutions. These solutions can be incorporated into traditional grey infrastructure, or even replace entirely, to enhance protection from flooding; increase aquifer recharge; reduce runoff; lessen impacts on treatment facilities; and mitigate coastal storm surges. These new approaches can also reduce overall water use in a community, limit urban heat islands, and increase adaptive capacity.

One example of this paradigm shift is Fishermans Bend, located in Melbourne, Australia – and the largest urban renewal project ever attempted in the Southern Hemisphere. The area is prone to flooding due to the proximity of the Yarra River and was previously home to polluting industries. Plans for the new 430-hectare site include many innovative blue-green infrastructure components and other technologies to reduce flooding and urban heat island effects while ensuring the community’s access to water. This is done by including smart rainwater tanks, constructing green stormwater infrastructure to store flood waters, building a first-of-its-kind water recycling plant, and incorporating green roofs and walls.

Fishermans Bend provides a blueprint for others to follow globally using nature-based solutions and emerging technology to create a unique, sustainable community that increases biodiversity by protecting and improving the surrounding environments. This community has shown how to shift the risk from flooding, extreme precipitation events and the threat of water scarcity into a benefit through a new, integrated approach to urban design.

Find out more about Fisherman’s Bend
These innovative blue-green and nature-based solutions have the potential to shape our cities for the better – not only mitigating impacts such as flash flooding or reducing the health consequences and costs of heat stress, but by improving amenity and biodiversity throughout our urban places too.”
Lindsey Brown, Water Market Lead – Australia

Meeting the rising tide of community expectations to achieve balanced outcomes

As citizens across the world become more attuned to how climate change impacts water resources, the industry faces increasing expectations to serve their communities as responsible stewards of local systems, protecting the environment while also delivering appropriate levels of service at affordable prices. In some places, the industry is responding by embedding social value into corporate charters and taking tangible steps to achieve balanced social and environmental outcomes.

As the water industry negotiates this shift in sentiment and an increasing awareness of water’s role in our lives, novel solutions are being adopted more commonly across the globe. In the UK, Southern Water’s “Water for Life” program is a prime example of this, aiming to recycle wastewater and pump it into a reservoir to address the looming risk of drought in Southeast England. It’s an integrated and adaptive approach to community resilience; re-using water in a more sustainable fashion, while shoring-up the community’s access to water in the future as the climate continues to change.

Havant Thicket reservoir, currently under construction, will host this recycled wastewater. With a capacity of over eight billion litres, this reservoir will help to reduce the impact on the nearby Test and Itchen chalk river ecosystems while increasing water supply resilience. This new integrated plan differs from previous water management and reservoir construction activities in that it focuses on preserving biodiversity and improving social and ecosystem outcomes.

Similar approaches have been taken globally to protect precious rivers, including putting treated effluent into waterways, reducing groundwater drawdown and ecosystem restoration. Addressing the issue of sustainable water availability in the face of drought risk requires careful planning and consideration of the broader impacts on the environment and communities. With planning issues and the requirement for a 10% biodiversity net gain in project development in the UK, the water industry is embracing the need for a holistic approach to water management.

With the community voice only growing louder on social and environmental issues, the water industry is stepping up to the plate with novel, nature-based approaches. However, with this innovation comes uncertainty – some of these approaches have not been tried and tested over decades, like traditional engineering interventions.

That puts the onus on us to embrace the challenge of pioneering new approaches with courage and humility – knowing that while we don’t have all the answers today – with collective effort and collaboration, we’ll put ourselves in the best possible position to balance future community expectations and environmental imperatives.” 
John Hensman, Water Market Lead – United Kingdom

Business continuity, productivity and community prosperity – the economic argument

Beyond the social and environmental benefits of working with nature, rather than trying to control water by defaulting to ‘hard engineering’, there is a clear economic argument too. Designing and delivering resilient infrastructure, decarbonising operations and prioritising ESG outcomes all reduce the risk profile of water utilities – and that underpins business continuity and productivity, protecting economies and through that, the communities that we serve.

Acting to understand and reduce climate risk through the lens of business continuity and productivity not only makes water utilities more sustainable in commercial terms but also supports more prosperous communities. Cities and communities that are proactively adapting to climate change’s impacts are safer, healthier and more livable, making them more attractive places to live and for business to invest.

People are more likely to stay in, or be willing to move to, communities that provide an environment where they can flourish. Likewise, businesses are more likely to expand or set up shop within a stable operating environment with a growing local economy and resilient water systems that protect their assets and investments against the impacts of climate-related water events. Sustainable population and business growth have the added benefit of expanding the local tax base, enabling more to be invested into the community and better water management for support further development, and so the positive cycle continues.

Water organisations pursuing these climate-smart strategies are also better placed to maintain their social license to operate; the support of their communities to implement changes in the built environment; and to attract, develop and retain the talent needed to be successful businesses, turning a response to a global risk into reward.

The link between business continuity and productivity – and community livability and prosperity – adds weight to the already compelling economic argument for investing in strategies and solutions that reduce water risk. These efforts need to be strengthened by the inclusion of proactive economic risk mitigation and associated community benefits. Doing good for the sake of good doesn't always cut it when utilities need to do more with less, and every business case for change is carefully scrutinized. Embracing water risk reduction not only fosters a sustainable environment but also paves the way for a thriving economy and happier communities.” 
Don Holland, Water Market Lead – Canada

Taking a fresh look at the Future of Water

The rising pressure exerted on global water systems by compounding factors necessitates rethinking these systems and our perceptions. Sensitive approaches that match the requirements of unique environments and communities across the globe are needed to mitigate risk – without losing sight of the immense socio-economic and environmental benefit they also promise to deliver. Flipping the water conversation from “what’s at stake” to “net positive gain” will help position these future-focused water management practices for wider political, commercial and community adoption – helping shift sentiment, increase resilience and adapt to change.


Aquanomics explores the economics of water risk and resilience across seven countries and five sectors. Our research reveals that droughts, floods and storms could result in a total loss of USD5.6 trillion to GDP between 2022 and 2050.
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