This is the fifth article in our ‘Rethinking Water Risk’ series. The previous article Overhead or Opportunity? (Part 4) can be read here.
Water does not recognise political boundaries – but its scarcity, mismanagement, and unequal distribution often intensify geopolitical tension. Geopolitical water risks are rising in prominence as global industries face growing exposure to transboundary water conflicts, shared basin governance failures, and infrastructure dependencies beyond their control.
These risks are particularly acute in regions where water flows across borders yet is governed by fragmented policies, asymmetrical power dynamics, or historical grievances. For businesses, this represents not just a physical risk, but a threat to operational continuity, regulatory certainty, and stakeholder trust.
Yet within these risks lies opportunity. Through basin-level cooperation and strategic water planning, cross-border projects can unlock shared benefits – from hydropower to ecosystem restoration.
“Where water flows across borders, so too must trust, equity, and shared responsibility.”
Table 0‑1: High Level Industry Breakdown of Impacts and Opportunities
| Sector | Industries | Geopolitical Water Risks | Opportunities for Resilience |
| Primary | Mining, Agriculture | Basin disputes, shared aquifer depletion, upstream diversions | Bilateral agreements, shared catchment assessments, cross-border EIAs |
| Secondary | Manufacturing, Utilities, Construction | Transboundary allocation uncertainty, tariff exposure | Water reuse investments, multinational Corporate Social Responsibility projects |
| Tertiary | Technology, Healthcare, Tourism | Reputational risk, water rationing, consumer backlash | Community partnerships, disclosure transparency, water-neutral branding |
To mitigate geopolitical water risks, businesses could incorporate the following into their strategies:
- Basin-Level Cooperation: Engage in or support formal water-sharing agreements and regional dialogues.
- Strategic Water Planning: Incorporate geopolitical scenarios into corporate risk frameworks – especially where assets depend on shared resources.
- Diplomatic ESG Engagement: Build partnerships with national water agencies, NGOs, and neighbouring basin actors to co-develop inclusive water strategies.
- Equity-Centred Impact Assessment: Ensure transboundary water projects fairly distribute benefits and minimise social and ecological harm.
- Shared Data Systems: Advocate for and participate in cross-border water data transparency platforms.
Real World Impact
The complex nature of geopolitical water risks requires practical, context-specific solutions that are both collaborative and adaptive. Around the world, a growing number of cross-border initiatives are demonstrating how strategic cooperation can mitigate conflict, enhance water security, and create shared economic and social value. Below are several illustrative examples of basin-level cooperation and strategic water planning that highlight the importance of managing transboundary water systems:
- Lesotho Highlands Water Project (Southern Africa): A binational initiative that supplies 780 million m³ of water annually to South Africa’s Gauteng region while supporting 51% of Lesotho’s power demand. However, dam construction has displaced communities and impacted river ecosystems – highlighting the need for adaptive governance during drought and shutdown periods.
- Mekong River Commission (Southeast Asia): Facilitates cooperation among six countries. Companies operating in the basin use MRC assessments to plan water use and mitigate operational disruptions tied to upstream hydropower development.
- Indus Waters Treaty (India-Pakistan): Despite geopolitical tensions, the treaty has endured since 1960, allowing businesses and farmers on both sides to plan irrigation and water infrastructure with some predictability.
- Blue Peace Initiative (Middle East, Africa): A Swiss-backed diplomacy platform promoting cooperative water management as a peacebuilding tool. Private sector actors are increasingly joining as partners to strengthen regional stability.
- Danube River Basin (Europe): The International Commission for the Protection of the Danube River coordinates cross-border water quality and flood control efforts, benefiting industries from agriculture to tourism across 14 countries.
Implementation Tips
Map Transboundary Dependencies: Identify all water sources that traverse borders or are influenced by upstream participants.
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- Integrate Water Diplomacy into ESG: Treat water diplomacy not as a state function alone but as part of corporate ESG due diligence.
- Support Local Water Rights: Ensure projects engaging with shared water bodies include community voices from both sides of the border.
- Engage in Transparency Initiatives: Participate in data-sharing platforms or voluntary disclosure schemes to build basin-wide trust.
- Plan for System Stress: Include contingency planning for shutdowns, droughts, or disruptions linked to cross-border infrastructure or agreements.
Water insecurity is increasingly shaped by geopolitics. For companies relying on transboundary water flows, geopolitical water risks are a strategic challenge – and an opportunity for transformative cooperation.
By investing in basin-level cooperation, inclusive governance, and robust scenario planning, businesses can mitigate uncertainty, build resilience, and unlock shared value across communities and supply chains. In a world where water binds nations and industries alike, strategic collaboration is essential.
