August 26, 2025

Welcome to The Sidekick, a monthly procurement newsletter dedicated to Sourcing Heroes around the country.

Una is a group purchasing organization that helps over 10,000 active members save more money and simplify procurement.

Join us today at www.una.com.

Plus strategies for dealing with sky-high tariffs.

We know data centers are power-hungry, but did you know they are desperately thirsty for our precious water as well?

Keeping the increasing number of centers cool is fast-becoming a crisis and has moved the water supply chain in many companies from an ESG issue to a strategic and immediate challenge. 

We also take a look at some of the strategies used by organizations that don’t plan to shift out of China amid sky-high tariffs.

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Let's get into Issue #020...

"The wars of the 21st century will be fought over water."

When Ismail Serageldin of the World Bank uttered the above words in the mid-1990s, he envisioned a world where water, our most precious resource, became so scarce that nations would one day go to war over the control of rivers and dams.

He didn’t offer a timeline, but it was one of those challenges that we assumed we had at least half a century to solve.

But here’s the thing. Serageldin didn’t know about AI. As technology advances exponentially, the demand for water to cool the ever-increasing number of data centres has escalated to alarming levels.

The result? Water scarcity has suddenly leapt from a distant concern to an urgent issue impacting global supply chains. 

The rise of AI has been nothing short of astonishing. However, it comes with a significant cost. A recent OECD study projects that AI systems will consume between 1.1 trillion and 1.74 trillion gallons of water annually by 2027.

To put that into perspective, this amount equals nearly half of what the entire United Kingdom uses every year.

As extreme weather events like heatwaves and prolonged droughts become increasingly common, the urgency to secure water for tech operations is palpable. 

Data centers are the backbone of AI, and they require substantial amounts of water for cooling. For instance, Google reported using over 6 billion gallons of water in 2023 just to keep its data centers operational. As the demand for AI capabilities continues to grow, so does the pressure on freshwater supplies.

Cities are beginning to take action in response to this crisis. Singapore and Dublin have already put a stop to new data center projects, citing fears that their water and energy systems are becoming overstretched. Meanwhile, Amazon, Microsoft and Google are operating data centers that use vast amounts of water in some of the world’s driest areas and are building many more, according to the non-profit investigatory organization SourceMaterial.

While alternatives to water cooling, such as air cooling and immersion systems, do exist, they often come with their own drawbacks. Water remains the most cost-effective and reliable cooling solution.

Using seawater might seem like a viable option, but its corrosive nature requires extensive treatment, making it impractical for most data centers.

Furthermore, the costs associated with treating seawater can be prohibitive, adding complexity to the cooling process. Unlike electricity, which can be temporarily supplemented with generators, freshwater has no immediate substitute, making the situation even more critical.

Big Tech, of course, has the money and influence to invest heavily in water stewardship, but critics argue that the runaway nature of data center growth and crucial omissions in water reporting (like the water used by power plants feeding data centers) make their targets increasingly meaningless.

The implications for global supply chains are worrying. A recent report from CDP revealed that US$77 billion is at risk due to water-related issues, with US$7 billion deemed to be in immediate danger. As companies expand their operations, they can no longer afford to overlook the importance of effective water management.

This year’s Gartner Top 25 Supply Chain Awards highlighted a noteworthy trend: leading companies are increasingly viewing water stewardship as a strategic component of their operations.

Firms like Danone and Nestlé are embedding water management into their core strategies, recognizing that effective stewardship is essential for resilience in a world facing climate change and competition with thirsty tech.

Organizations must prioritize water management by assessing supply chain risks, setting ambitious targets, and incentivizing leadership to focus on water issues. The future of effective supply chains depends on our ability to navigate this emerging water crisis.

Moreover, collaboration among governments, businesses, and communities will be needed in developing innovative solutions. Companies that proactively engage with local water authorities, invest in sustainable practices, and promote transparency in their water usage will likely find themselves better equipped to handle the pressures of a changing climate.

The conversation around water scarcity lies at the heart of how we think about sustainability and technology. If we fail to address these challenges, we could face a dystopian future: big tech controlling crucial sources of water, nations going to war over lakes and rivers, or AI advancement in the US coming to a sudden halt (China, with its Himalayan mega-dams, has plenty of water in southern provinces but struggles with drought in the north). 

It’s imperative that we act now to prevent such bleak outcomes and strive for a future where technology and natural resources coexist sustainably.

What’s the first step to take?

We’d suggest familiarizing yourself with what some of the best-known brands are doing today to position themselves for a water-scarce future. 

• Coca-Cola
• Nestle
• AB-inBev
• General Mills
• Danone
• Levi Strauss

Choosing the right group purchasing organization.

Just as choosing the right suppliers is crucial to your procurement strategy, so is selecting a GPO that aligns with your goals.

It’s a key move in building a more efficient, cost-effective, and agile procurement operation.

Here’s a clear, actionable GPO Evaluation Framework that procurement professionals can use to ask the right questions when considering partnering with a group purchasing organization.

It’s structured around key decision-making categories, each with probing questions designed to evaluate alignment, value, and fit.

Snag a copy today and see if your GPO partner is checking all the boxes.

Keeping a pulse on the industry.

💫  Resources from Una

• How to Evaluate Your GPO Partnership
• Supplier Relationships: Will a GPO Come Between Us?
• Getting the Most Value Out of a Discovery Call with Una
• Choosing a Group Purchasing Organization: An Assessment Framework
• Four Scenarios When You Should NOT Us a GPO
• Episode 227 of The Sourcing Hero Podcast featuring Brian Goudie

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