Which components comprise the water risk triad?

• A. Physical water risk, regulatory/reputational risk, and supply risk.
• B. Chemical leakage risk, regulatory risk, and market risk.
• C. Physical health risk, environmental risk, and social risk.
• D. Water scarcity risk, energy risk, and climate risk.

Answer: (A)

The essential idea is that water risk comes in three linked dimensions that together affect how reliably an organization can access and use water. Physical water risk covers the tangible threats to water availability and quality, such as droughts, floods, or contamination that disrupt operations. Regulatory and reputational risk involves laws, standards, permits, and public expectations around water use and stewardship, where changes can constrain operations or hurt an organization’s image. Supply risk focuses on the reliability of the water supply itself, including dependencies on water sources, infrastructure, and the resilience of the supply chain.

This combination is why the best answer lists physical water risk, regulatory/reputational risk, and supply risk. The other options mix in risks like chemical leakage, health, or energy and climate factors, which aren’t part of the standard water risk triad in this framework.