Academic journal article Global Business and Management Research: An International Journal

Water Risk Indicator (WaRisk)

Academic journal article Global Business and Management Research: An International Journal

Water Risk Indicator (WaRisk)

Article excerpt

Introduction

Water issues is the water governance challenge. Water insecurity poses one of the greatest risks and leadership challenges of our generation and it has started to undermine food, energy and industrial production and damage economic growth prospects in many countries (World Economic Forum, 2018). Considering water security as a possible restraint on economic growth, it reflects social and environmental involvements to generate a sense of pressure among the stakeholders.

Our previous work (Mohd Remali, Mat Husin, Mohd Ali, & Alrazi, 2016), determined the water risk performance into three water risks profile: low, moderate and high. The risks were measured according to the proposed matrix, referred to as Water Governance Matrix (WaGM). In this paper, we further develop the work to introduce a web-based application system to categorise the risks. Hence, this paper classifies the key categories of water risk indicator system components namely: (1) water performance summary; (2) lists of company water-profile; (3) company water level data; and (4) recommended actions. Water related information from the audited annual report was acquired for the sample of public listed companies. Reports on water commitment and the information on company's water risk level are the minimal requirement of the system. Our initial water audit system (WAS) that we proposed in our previous work for industry uses has yet to be observed by any government agency or any industrial company. We developed this WaRisk and presented this study after a discussion with the state government agency related to environmental protection.

Therefore, the purpose of this paper is to fill the gap of prior studies by proposing the water risk indicator system for industrial companies and regulators. To the best of our information, WaRisk's uniqueness lies on the 8-elements for water risks indicator.

Innovation Content

This following parts of the paper is organised to explain an overall idea for WaRisk, then deliberates the justification on theoretical basis and the system interface design. The methodology and findings were explained in the two sections later and also the option for suggested actions.

Description

WaRisk is intended for commercial uses particularly the industries with water intensity either high, moderate or low. The regulators or any professional bodies may use the proposed system to award the best practices of water governance and water management from the industrial companies. As suggested by the incentive theory of motivation, behaviour is motivated because of reinforcement and incentive which implies that with such awards and recognition from regulators, the industrial companies may place greater effort on water governance and initiatives.

Background of innovation

The companies are listed under three modules of water intensity comprising low intensity industry, moderate intensity industry, and high intensity industry. Referring to the water disclosure item (Table 1), this study used a dichotomous system, the information in the annual report is decoded 0 and 1. We employed the sample as in our previous work with 302 of high risks companies; 381 of medium risk companies; 131 of low risk which total up to 814 companies. For the three profile categories, the sample chosen was the top ten companies for each risk profile. Thus, the 30 companies is the final sample of this study.

Figure 1 below indicates suggested Water Governance Matrix (WAGM) (Mohd Remali et al. 2016) to recognise the water risk performance of industrial companies. The water risk of the companies either low (green boxes), moderate (yellow boxes) or high risk (red boxes) is map using the WAGM. The above panel of the matrix indicate the three modules of water intensity referring to The Ceres Aqua Gauge (2011). The level of water commitment generated is based on the water index (Table 1). …

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