Who put lead in my noodles?

As Nestlé recalls its top performer — Maggi noodles — from stores in India, a pertinent question to ponder soon after World Environment Day is: How did a toxic substance such as lead enter our food chain in the first place?

To be sure, the current controversy primarily concerns food safety. Discussions on food additives and package labelling are vital. However, environmental groups such as Toxics Link, which has found high levels of lead in the Yamuna river flowing through the capital, ask if we are perhaps ignoring another crucial dimension: the role of the depletion and pollution of India’s water resources.

Today, a large and growing number of companies recognise that worsening water security — both quantity and quality — poses a substantive business risk. This awakening is leading corporations to ask tough questions about their ability to grow under such pressures. More than 200 of the firms moving to tackle the business challenges of worsening water security by taking part in the Carbon Disclosure Programme’s (CDP) water programme expect that water issues could limit the growth of their business.

A recent report from the IMF states that water security is an increasing global concern that could hinder countries’ economic prospects. Rising water stress, water pollution, significant variability of supply and lack of access to safe drinking water are already afflicting many parts of the world.

Emerging markets and developing countries generally face greater hurdles because of their bigger populations, lower income levels, inadequate infrastructure and less advanced policy and institutional capacities.

In these economies, companies are being confronted with mounting water risks that drive home the reality that water can no longer be treated as a free, endless resource. Brazil has more freshwater than any other country, yet its biggest city, São Paulo, is running dry; in China, some 60 per cent of groundwater is polluted.

Closer to home, India is facing an unprecedented water crisis with domestic, agricultural and industrial shortages. A McKinsey report suggests that the demand for water in India could outstrip supply by 50 per cent in just 15 years. This — coupled with the fact that around 70 per cent of India’s population has inadequate access to safe water for sanitation and hygiene — could jeopardise India’s ability to continue as one of the world’s most rapidly expanding economies.

Further, worsening water security also presents a threat to energy supplies and solar expansion in India. A recent report by Ficci found that nearly 30 per cent of the power sector in India closes down for the summer as a direct result of water scarcity.

There is a clear and compelling case for an urgent shift in the way water resources are managed across the country. Last year, 73 major companies that operate in, buy from or sell to India joined CDP, in order to take meaningful action to mitigate water risks, capitalise on opportunities, and improve water security.

Water security is likely to be one of the defining environmental issue of the 21st century. As Nestlé reacts to the immediate situation in India, its shares have taken a substantial beating. The company’s market capitalisation has fallen by more than ₹10,000 crore ($1.5 billion) since the controversy erupted in May. The brokerage firm CLSA cut Nestlé’s 2015-16 earnings per share estimates by 20-25 per cent.

Though the focus of this controversy covers a multinational, many Indian companies, including ITC Ltd and JSW Steel, have reported that they face risk from declining water quality in the Ganga, Krishna and other major river basins. The businesses cite higher operating costs as a result of investment in water treatment, and a decrease in circulation, which in turn increases their water consumption.

It is encouraging that The Food Safety and Standards Authority of India has ordered tests on all brands of noodles, pasta and macaroni that contain tastemakers. Simultaneously, however, steps must be taken to protect the country’s water resources. This is imperative if we are to ensure that this precious resource does not become a flashpoint for more friction.

The writer is the director of a sustainability NGO, CDP India