CDP Water Disclosure sent its first annual questionnaire to 302 of the world’s largest companies asking for information on their water use and other water-related business issues. It received a 50% response rate with 122 of these responding publicly and a further 25 companies responding on a purely voluntary basis.
The information was requested on behalf of 137 institutional investors representing US$16 trillion in assets to increase transparency and accountability on water scarcity and other water related issues, and to inform the global market place on investment risks and commercial opportunities. The data will provide valuable insight into the strategies deployed by many of the largest companies in the world in relation to water use and will be used to help drive sustainability.
The report, prepared by Environmental Resource Management (ERM), analyses the public responses[2] to the questionnaire and will be officially launched at Bloomberg’s offices in London, 09:00am, Friday 12th November 2010. The report findings show that water is already impacting business operations with 96% of responding companies able to identify whether or not they are exposed to water risk and more than half of those reporting risks classifying them as current or near-term (1-5 years). 39% of companies are already experiencing detrimental impacts relating to water including disruption to operations from drought or flooding, declining water quality necessitating costly on-site pre-treatment, and increases in water prices, as well as fines and litigation relating to pollution incidents.
Water security is already high on the corporate agenda with 67% reporting responsibility for water-related issues at the board or executive committee level. The majority of companies (89%) have already developed specific water policies, strategies and plans, and 60% have set water-related performance targets.
Other CDP Water Disclosure report key findings:
Ã?? Business engagement on water issues differs widely across different industry sectors: 100% of companies in the chemicals sector responded compared with just 29% in the oil & gas, and construction, infrastructure & real estate sectors.
Ã?? Responses were received from companies in a total of 25 countries, with the most responses coming from the USA (59, 57% responding), the UK (14, 64% responding) and Japan (13, 45% responding). The highest response rates were from South Africa (100%), Germany (83%) and Switzerland (71%).
Ã?? A high number of corporations (62%) are identifying a wide range of water related business opportunities in areas such as water management, water efficiency and reduction, and wastewater treatment.
. Just 53% of companies are able to identify whether they are exposed to water risks in their supply chains, as opposed to the high levels of awareness (96%) of water risks in their own operations.
Ã?? Sectors reporting the greatest exposure to water risks include food, beverage & tobacco and metals & mining, with chemicals and technology & communications the least exposed. Physical risks to direct operations from drought and flooding were most frequently cited, but companies also recognize risks from changing regulations and reputational damage.
Ã?? Companies exhibiting best practice in water management include Anglo American, Colgate-Palmolive, Ford, GE, PG&E and Taiwan Semiconductor Manufacturing.
The launch of CDP Water Disclosure’s first report at Bloomberg’s offices in London today, along with the availability of individual company responses at www.cdproject.net gives investors, companies, governments and other interested stakeholders a wealth of information on companies’ water usage, the water-related risks and opportunities in their operations and supply chains, and their water management plans and performance targets.