Just 23 per cent of CEE businesses have assessed water risks in their supply chains, exposing a major blind spot in corporate risk management.
Water is becoming a costly business risk in Central and Eastern Europe. More than half (52 per cent) of companies surveyed have experienced at least one significant negative water-related impact in the past five years, including operational disruptions and rising costs. And the outlook offers little comfort: 58 per cent expect water risks to affect their business moderately or significantly over the next five years, according to a new WWF report developed together with EY denkstatt Austria.
The report, Business Water Risks and Readiness in Central and Eastern Europe, draws on a survey conducted between April and June 2026 among 115 companies in Bulgaria, Czechia, Hungary, Romania, Slovakia and Ukraine. While the findings are indicative, rather than statistically representative, the survey offers a much-needed snapshot of current practice among businesses. It reveals a significant gap between exposure and preparedness. Some 46 per cent have assessed water risks in their own operations, but just 23 per cent have done so across their supply chains. More than half of the survey participants (53 per cent) lack a dedicated water strategy, and just seven per cent consider themselves very prepared to manage water-related business risks.
Drought and water scarcity top the list of anticipated business risks (49 per cent), followed closely by flooding and extreme rainfall (46 per cent). Declining water quality, pressure on ecosystems, and regulatory uncertainty are considered further significant concerns.
The report’s publication follows a summer when exceptionally low water levels of the Danube showed how quickly water scarcity can disrupt economic activity. In 2026, low river flows affected freight and passenger transport across the region, while insufficient cooling water forced nuclear power plants in Hungary and Romania to reduce or halt electricity production. Agriculture, tourism, and other sectors also faced disruption or losses, highlighting how water shortages can ripple through the wider economy.
“Water has long been treated as something businesses can largely take for granted: a reliable input, available when and where it is needed. Across Central and Eastern Europe, that assumption is becoming increasingly difficult to sustain,” said Andreas Beckmann, CEO of WWF Central and Eastern Europe. “Businesses depend on the health of the rivers, wetlands and freshwater systems around them. Working with suppliers, other water users and public authorities to protect and restore these shared resources is essential to building lasting resilience.”
“Companies that act early on water risks are better positioned to protect their operations, strengthen supply chain resilience and make informed investment decisions. Understanding where a business is exposed is not simply about avoiding losses. It can also help identify opportunities to improve efficiency, build stronger partnerships, and secure long-term competitiveness. The cost of waiting may prove far greater than the cost of preparing,” said Willibald Kaltenbrunner, Managing Partner at EY denkstatt Austria.
The biggest blind spot lies beyond the factory gate
Businesses are twice as likely to have assessed water risks within their own operations as across their supply chains. On the flip side, a similar gap emerges in assessing their impacts on water resources: 48 per cent have examined impacts from direct operations, compared with just 25 per cent across their supply chains.
This matters because water risks and impacts do not stop at company boundaries. A business may manage water efficiently at its own facilities, yet face production delays, higher costs or supply shortages if a critical supplier operates in a water-stressed region, a transport route is disrupted, or the wider freshwater system deteriorates.
Investment is not keeping pace
Despite widespread exposure to water-related risks, nearly half of respondents (45 per cent) expect their water-related spending to remain unchanged over the next three years. Only 28 per cent plan to increase it, including just four per cent anticipating a significant rise.
The adoption of a water strategy appears to be associated with greater willingness to invest. Among companies that have experienced negative water-related impacts, 52 of those with a water strategy consider increasing their water investment in the next five years, compared with only 26 of those without one.
For businesses, the message is clear: recognising water risks is only the first step. Companies need to assess where water scarcity, flooding or declining water quality could disrupt operations, threaten supply chains, or increase costs. The report calls for clear accountability, targets that reflect local water conditions, and closer engagement with suppliers and other water users. The real test is whether companies turn that understanding into investment before the next disruption hits.
Photo: Dreamstime.