Mapping water scarcity risks in global supply chain networks

Abstract

ABSTRACT Water scarcity poses a significant threat to global supply chains. This study identifies critical sectors and pathways that transmit water scarcity risks using network analysis and a global trade model. Findings show that a few sectors, particularly in China, transmit most global water scarcity risks, with the top 10% responsible for over 60% of the total. Moreover, the rankings of sectors with respect to centrality for transmitting water scarcity risks and centrality for transmitting economic values largely resemble each other, with a Kendall rank correlation coefficient 0.8231 (p < 10−15). Lastly, sectors with high water risk intensity are typically found in Europe. Our findings the need for strategic sector management to mitigate global vulnerabilities. Governments should encourage high-centrality sectors to choose suppliers less exposed to water scarcity risks, while downstream sectors and firms should assess the risks embedded in their inputs.