In five to ten years, the chemical industry's manufacturing footprint could shift, not only because of carbon regulations and energy costs, but because of something even more fundamental: water availability.

Water is everywhere in chemical manufacturing: cooling reactors, dissolving compounds, cleaning equipment and transporting materials. The industry has spent decades measuring consumption, improving recycling rates and optimizing efficiency. Those gains are real and necessary. But they answer a different question than the one that will shape the next decade: not how efficiently we use water, but whether the water we need will be available.  

The macro trends suggest this question is increasingly urgent. Bloomberg Intelligence projects that freshwater demand will outpace supply by 40% by 2030. According to the World Resources Institute, 24% of global gross domestic product (GDP) was already exposed to high water stress in 2010, a figure projected to reach 31% by 2050 as climate patterns shift. Water availability is emerging as a strategic constraint for many industries.

The question isn't whether this shift will happen, but which companies will anticipate it, and which will be forced to react. According to CDP water security assessments, a significant gap exists between companies reporting current water use versus those also conducting forward-looking analysis of water stress.  

Like many companies, Trinseo has a clear focus on efficiency metrics. We prioritize circular water practices by reusing and recycling water. One of our long-term sustainable operation goals is to reduce our freshwater intake, a goal that our manufacturing and technology teams are working together to achieve. Since our 2017 baseline year, Trinseo has seen a 30% reduction in freshwater intake.  

But beyond optimizing our usage, we needed to address the next critical question: Will the water be there tomorrow? We're getting ahead of this challenge by evolving our approach to include a future-focused analysis to strengthen plans for a changing climate. Over the past year, I've led our initiative to build water resilience capabilities through our Water Risk Assessment process, working across operations with subject matter experts to identify vulnerabilities before they become disruptions. The work requires extensive data collection, aligning external risk indicators with our internal KPIs and identifying gaps in our analysis. Through this process, one distinction became impossible to ignore: efficiency metrics tell you how well you're using water, and resiliency data tells you whether you'll have water to use. 

Why Efficiency Isn't Enough 

Water consumption and improving efficiency are critical on many levels, including reducing environmental footprints and improving operational performance. But it's the floor, not the ceiling. A chemical plant can significantly reduce water withdrawal with best-in-class water recycling rates but still face risks if it operates in a watershed where demand is outpacing supply or where competing users have priority access during scarcity. It's like optimizing fuel efficiency in a car when the real problem is that there's no gas station for 200 miles.  

Consider what efficiency metrics don't capture: water scarcity that limits availability, flooding or drought that disrupts operations, and water quality degradation. These have become strategic risks that could lead to operational disruptions, increased costs, regulatory pressures and supply chain vulnerabilities. Companies that integrate water risk into strategic planning, alongside operational efficiency and compliance, will be better positioned to maintain operational continuity as watershed conditions change.

From Facility Optimization to System Understanding 

Through our assessment work, three fundamental shifts have emerged as essential to building water resilience:

• From backward-looking to forward-modeling: Historical water use data tells you what happened, not what's coming. Climate change, demographic shifts and regulatory evolution mean the past is no longer a reliable guide to the future.
• From facility-centric to watershed-aware: Your risk extends beyond your operations to include competing demands, ecosystem health and governance in the basin you share with municipalities, agriculture and other industries.
• From compliance-driven to strategy-informed: Meeting disclosure requirements is necessary, but water intelligence should inform capital allocation, site selection and long-term planning.

What This Requires

Translating these principles into practice requires specific capabilities and tools. At Trinseo, this meant fundamentally rethinking our strategy. While developing our 2024 Water Risk Assessment, I aligned our work with Taskforce on Nature-related Financial Disclosures (TNFD) recommendations to evaluate water-related risks across our global operations using hydrogeological data, source water analysis and operational assessments. Using key external databases, we're identifying risks including water scarcity, flooding, quality degradation, regulatory challenges, and future climate impacts at a site-specific level. We're stress-testing facilities against future scenarios, not just measuring current performance.

Applying the Framework

At Trinseo, we're putting this systems thinking into practice:

• Piloting context-based water stewardship plans at facilities in high water stress locations, focusing on site-specific risks and mitigation strategies
• Integrating watershed-level risk indicators into operational planning and treatment processes, guided by our Responsible Care® Management System
• Collaborating with local stakeholders to address shared water concerns in the watersheds where we operate
• Evaluating biodiversity proximity at our sites, recognizing that water security and ecosystem health are inseparable

While this work is still evolving, we're already seeing value in this fundamental shift. Combining operational efficiency, which tells us how we perform today, with strategic questions about substitutability, watershed dynamics and future scenarios creates resilience that will define how we can perform tomorrow. 

Why This Matters Beyond Sustainability Reports 

Building water intelligence capabilities can deliver measurable advantages:

• Strategic optionality: Water resilience informs critical strategy for companies. Consider two facilities with identical efficiency metrics: one operates in a stable watershed with diversified sources, while another sits where demand is projected to outpace supply by 2035. Understanding this distinction enables smarter allocation of resources and reduces long-term operational risk.
• Operational continuity: In an era of increasing climate variability, supply continuity differentiates industry leaders from the rest. Maintaining customer commitments, protecting industry positioning and avoiding costly shutdowns far exceeds the investment in building these capabilities.
• Regulatory readiness: Evolving disclosure requirements, from the EU’s Corporate Sustainability Reporting Directive (CSRD) to California's climate regulations, demand more than compliance documentation. At Trinseo, we're expanding capabilities to actively manage what we report, using water intelligence to inform operational decisions and advance our goal of reducing freshwater intake across operations.
• Stakeholder trust: As customers evaluate supplier water practices and regulators manage resources in water-stressed regions, proactive stewardship strengthens industry positioning. Companies demonstrating water resilience have the ability to strengthen both commercial relationships and regulatory standing in the regions where they operate.
• Ecosystem stewardship: Water management increasingly intersects with biodiversity and nature-related financial risks. Trinseo’s assessment, aligned with TNFD recommendations, identifies operations in areas of high biodiversity importance. This integrated approach positions us to respond to emerging nature-related disclosure requirements while recognizing that water security and ecosystem health are inseparable. 

This systems-level thinking is beginning to reshape business strategy across industries, as companies recognize that water availability is becoming as fundamental to long-term planning as energy access and supply chain logistics. Companies that integrate this reality into strategic decision-making now will be better positioned to maintain operational continuity and adapt to climate challenges. 

The Path Forward

The chemical industry has strong foundations in water management. The challenge now is moving from facility optimization to system understanding, from measuring past performance to modeling future risk.

This requires acknowledging that water risk is increasingly about factors outside our control and building resilience accordingly. At Trinseo, we're investing in those capabilities that help us model future risk and build resilience now because we understand that water-related challenges are anticipated to intensify. Through innovative water stewardship, transparent reporting and collaborative industry leadership, we are transforming water risks into opportunities for strategic growth and long-term resilience.