Water constraints: a boardroom issue for global corporations, study reveals

At least one in five multinationals in the most water-intensive sectors is already experiencing damage to their business from drought and other shortages, flooding, and rising prices. This is one of the findings in a new report released by the Carbon Disclosure Project (CDP). Nearly 150 companies responded to a survey conducted by the CDP Water Disclosure programme, of which 39% said they 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”.

Companies most at risk are in the food and drink, tobacco, and metals and mining sectors.

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.

Although most of the companies surveyed were from developed countries, several were based in emerging markets such as China, India, South Africa and Colombia.

[1] Environmental Resource Management (ERM) (2010). CDP Water Disclosure 2010 global report : On behalf of 137 investors with assets of US$16 trillion. London, UK, Carbon Disclosure Project. 50 p.
Download full report

Related web site: Carbon Disclosure Project – CDP Water Disclosure

Source: CDP, 12 Nov 2010 ; Juliette Jowit, Guardian, 12 Nov 2010

CSD-18/19: UN-Water and UNSGAB highlight water issues

UN-Water and the United Nations Secretary-General’s Advisory Board on Water and Sanitation (UNSGAB) have prepared a background document [1] for the eighteenth and nineteenth session of the Commission on Sustainable Development (CSD-18/19) that highlights the water related aspects of the current CSD’s thematic issues of mining, sustainable production and consumption, chemicals, transport and waste management.

The key messages of the document are:

• Water should be considered in any policy response or decision taken in relation to the CSD thematic issues of mining, sustainable production and consumption, chemicals, transport and waste management.
• Linking water-related issues to decisions made outside the water domain is critical. A global water crisis will not be averted, and sustainable development will not be advanced, if water managers and experts in other fields do not communicate, plan, find joint solutions and work in a participatory manner with planners, policy makers and users.
• Decision-making in all sectors has a significant impact on water resources issues. At the same time, the management of increasingly stressed water resources will have direct impacts on the themes of CSD-18/19. The contribution of water in areas such as mining and waste management, the impact on water resources of consumption and production patterns and the linkages to broad development goals must be articulated and understood at the political, policy and decision-making levels.

[1] UN-Water and UNSGAB (2010). Water issues : contributing to the success of the eighteenth and nineteenth sessions of the Commission on Sustainable Development. Read full document

Related web sites:

• UN-Water
• UNSGAB
• CSD-18

Water-gulping companies’ risk disclosures run dry: report

Most publicly traded companies that depend on water do not adequately disclose their financial risks to droughts and future regulations, even as water scarcity problems mount, according to a report released on 11 February 2010.

The report produced by Ceres, a coalition of investors and environmentalists and Swiss Bank UBS, ranked 100 of the biggest publicly traded companies on the quality, depth and clarity of their water disclosure risks and opportunities.

“This report makes clear that companies are not providing investors with the kind of information they need to understand the risks and opportunities posed by water scarcity,” said Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System.

The group, known as CalSTRS, is a member of Ceres.

Many kinds of companies depend on large and readily available water supplies to run their businesses. Energy, beverage, food and semiconductor companies are among the ones that face risks from dwindling water supplies, especially in developing countries where populations are rising and industries are growing.

Risks include food shortages and higher prices for commodities because of drought, a problem already evident in places such as Australia and the U.S. Southwest.

Some power companies use water to cool their plants. Others generate electricity at dams. Both face some of the biggest risks if they lose their water, the report said. In 2007 and 2008, several power plants in the U.S. Southeast nearly shut down because of drought, the report said.

“It is clear that any threat to water security could have a significant impact on the bottom line of such companies,” said Julie Hudson, global head of sustainability research at UBS Investment Bank.

Among power companies, Arizona Public Service, a unit of Pinnacle West Capital Corp, scored highest, in part because it uses treated sewage to cool power plants in Arizona, the report said.

Canada’s biggest natural gas producer Encana Corp had the lowest ranking in the oil and natural gas industry with a score of four. Oil company BP scored 35, the best in that industry.

Dr Pepper Snapple Group had the lowest rank in the beverage industry, while Diageo, the world’s biggest spirits group, scored highest.

In food, Bunge Ltd scored lowest, and Unilever scored highest.

Micron Technology Inc scored lowest in the semiconductor industry, while Toshiba Corp scored highest.

The companies with low scores were not immediately comment on the report.

More information is available at www.ceres.org/waterreport

Source: Timothy Gardner, Reuters, 11 Feb 2010

Water Facts & Trends updated, World Business Council for Sustainable Development

The World Business Council for Sustainable Development (WBCSD) has updated its Water Facts and Trends publication ( 3.5 MB) , which now includes recent information on access to water and sanitation, areas of economic and physical water scarcity and economic considerations in water management.

This working document provides an overview of some basic facts and societal challenges related to water. It has been developed by the WBCSD secretariat and is intended to support the ongoing dialogue within the WBCSD membership and with other stakeholders in civil society and government.

The emphasis in this document is on water availability and people’s use of water for agricultural, industrial and domestic purposes.

Data has been drawn from documents prepared for the World Water Forums, the OECD, the World Resources Institute and other research organizations.

The document is one of the outputs of WBCSD’s Water project that aim to help companies integrate water issues in their strategic planning. Other outputs include Water Scenarios to 2025 (2006) the Global Water Tool (2007) and Collaborative Actions for Sustainable Water Management (2005).

Source: WBCSD, 12 Aug 2009

Climate Change and the Global Water Crisis: What Businesses Need to Know and Do

In May 2009, the Pacific Institute and the UN Global Compact have released Climate Change and the Global Water Crisis: What Businesses Need to Know and Do, a paper exploring the linkages between climate change and water – from both the scientific and corporate management perspectives.

The paper details how climate change is expected to impact water scarcity, water quality, and water demand. It also brings to the fore how interconnected water and energy are, particularly in terms of the vast amounts of energy used to treat, distribute, and use water, and the serious shortsightedness and risks of managing water and energy/climate change in isolation of one another.

The Pacific Institute and UN Global Compact present the need for the business sector to take action on both climate and water, detailing how disruptions in water supply can increase water prices and trigger increased socio-political risks. Without forward-thinking management, such disruptions can undermine industrial operations, increase competition for clean water, exacerbate the subsequent tensions that arise between businesses and local communities, and cause ecological impacts from water withdrawal and discharge that require more regulatory action.

The Pacific Institute, based in Oakland, California, provides independent research and policy analysis on environment and development issues, including water shortages. The UN Global Compact is a policy platform for companies that are committed to sustainability and responsible business practices. The Compact set up the CEO Water Mandate in 2007, as one of its specialised workstreams.

Read the full report.

The Water and Business Summit 2008, 26-27 Nov, London

Water scarcity is becoming ever more apparent. By 2025, JP Morgan predicts that major economies including the US, Western Europe and China, will experience significant water problems. As they conclude – “A scarcity of clean, fresh water presents increasing risks to companies in many countries and many economic sectors.”

The first Water and Business Summit, organised by the Ethical Corporation, is designed to help business assess the risks they face.

Workshops and plenary sessions at the conference will cover:

• Future projections on water, and the business case for a sustainable water strategy
• How to measure your water footprint, and next steps when you do
• Operational efficiency – reducing water use in your business
• Water governance and pricing – an examination into likely fluctuations in the price of water
• Embedded water and supplier water management
• Public policy dialogue: your role as a business and the issues to be discussed
• Water neutrality and offsetting – unhelpful buzzwords or realistic aims?
• Local community engagement and community water partnerships

For more information go to the conference web site