National Water Week: 4 Reasons Water Matters for Business Resilience

This National Water Week, held from 19–25 October 2026, focuses on the theme Water Connects Everything. It reflects the central role water plays across communities, ecosystems, infrastructure, energy, food production, industry and the economy.

For businesses, water is also a practical risk. Changes in availability or reliability can affect operations, supply chains, costs and financial performance. As Australia’s climate changes, understanding where businesses depend on water is becoming more important for managing climate risk and building resilience.

Here are four reasons water deserves greater attention from businesses.

1. Australia’s water conditions are changing

Climate-related water risk is not only a future scenario.

The Bureau of Meteorology reported that 2024–25 was Australia’s warmest financial year on record, with the national mean temperature 1.68°C above the 1961–1990 average. While northern Australia experienced relatively wet conditions, rainfall across southern Australia was 5% below average, and parts of Victoria and South Australia experienced their lowest financial-year rainfall on record.

The effects extended to Australia’s water resources. National surface-water storage fell from 74% to 65% of accessible capacity during the year, while below-average streamflow was recorded at around 32% of monitored sites.

For businesses, changing rainfall, streamflow and water availability can translate into operational disruption, supply constraints, higher costs and increased competition for resources.

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2. Water security is now recognised as a nationally significant climate risk

Australia’s first National Climate Risk Assessment, released in September 2025, identified water security as one of 11 nationally significant priority climate risks. It was also classified as a cross-system risk, reflecting its connections with other parts of Australia’s economy, environment and society.

The assessment rates Australia’s current water-security risk as High, increasing to Very High by 2050 and Very High–Severe by 2090. It points to declining cool-season rainfall and runoff across southern Australia among the key drivers, with potential implications for communities, ecosystems and water-dependent industries.

This matters because water risk rarely occurs in isolation. Reduced availability, drought or flooding can interact with risks affecting agriculture, infrastructure, energy, supply chains and the broader economy.

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3. Mandatory disclosure is changing how businesses consider water risk

Many organisations already measure and report on water as part of their sustainability programs. The introduction of Australia’s mandatory climate-related financial reporting (AASB S2) introduces an additional lens, requiring reporting entities to consider whether water-related climate risks could affect their prospects and financial performance.

AASB S2 explicitly recognises water-related physical climate risks. It identifies acute risks such as floods and drought, as well as longer-term changes in precipitation that can contribute to reduced water availability. The Standard also recognises that an entity’s financial performance can be affected by changes in water availability, sourcing and quality, including through impacts across operations and supply chains.

AASB S2 does not require every organisation to prepare a standalone water footprint or disclose water metrics. Water risk becomes relevant where it could reasonably be expected to affect an entity’s prospects, as part of its broader climate-related disclosures.

That means water risk is now relevant to broader business discussions across risk, strategy, finance and governance functions, not just to sustainability teams.

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4. The focus is shifting to building resilience

Australia’s policy direction also reflects a growing focus on preparing for changing climate and water conditions.

In August 2026, the Australian Government signed the new National Water Agreement, which seeks to address current and future water challenges and explicitly supports sustainable water planning in a changing climate. States and territories are now considering whether to sign it.

Australia’s National Adaptation Plan similarly recognises adaptation as a shared responsibility, stating that industry and businesses have a role in understanding and taking steps to protect themselves from climate impacts. More recently, Treasury’s 2026 Climate-related Transition Planning Guidance encourages organisations to consider both the net-zero transition and the growing physical effects of climate change.

For businesses, resilience starts with understanding where water dependencies exist across operations and the value chain, identifying locations that may be exposed to changing water availability or extreme events, and considering whether existing controls and adaptation measures remain appropriate under future climate conditions.

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Contact Cress to learn more about assessing climate-related risks and preparing for Australia’s climate disclosure requirements.

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Cress is the Hydroflux Group’s in-house sustainability consulting team, operating as a specialised division and driven by a simple but powerful goal: to help organisations across Australia, New Zealand and the Pacific region create a more sustainable future. As a young and agile team, we combine technical expertise with fresh, forward-thinking approaches to help clients navigate complex challenges across climate risk, emissions reduction, modern slavery, water stewardship, and ESG reporting, building on the Hydroflux legacy of engineering excellence while bringing a sustainability lens to the industries and communities shaping the future of our region.