CDP Releases First Water Disclosure Report

by | Nov 12, 2010

Thirty-nine percent of companies are already experiencing detrimental impacts related to water issues including disruption to operations from drought or flooding and declining water quality, which results in costly on-site pre-treatment and increases in water prices, as well as fines and litigation relating to pollution incidents, according to the CDP Water Disclosure’s first report.

CDP Water Disclosure, a new program from the Carbon Disclosure Project, sent its first annual questionnaire to 302 of the world’s largest companies in April asking for information on their water use and other water-related business issues. CDP received a 50 percent response rate with 122 companies responding publicly and 25 companies responding voluntarily. CDP launched the program in November 2009.

CDP says demand for water is projected to outstrip supply by up to 40 percent by 2030 and approximately 80 percent of the world’s population already lives in areas where fresh water supply is not secure.

The report, “The Case for Water Disclosure” (PDF), indicates that water is already impacting business operations with 96 percent of survey respondents able to identify whether or not they are exposed to water risk and more than half of those reporting risks as current or near-term (one to five years). However, only 53 percent of the companies are able to identify whether they are exposed to water risks in their supply chains.

In addition, 67 percent of respondents report responsibility for water-related issues at the board or executive committee level. The majority of companies (89 percent) have already developed specific water policies, strategies and plans, and 60 percent have set water-related performance targets.

Sixty-two percent of corporations have identified a wide range of water-related business opportunities in areas such as water management, water efficiency and reduction, and wastewater treatment.

The survey also reveals that business engagement on water issues differs widely across different industry sectors. As examples, 100 percent of companies in the chemicals sector responded compared to 29 percent in the oil & gas, and construction, infrastructure & real estate sectors.

CDP says 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 damage to their reputations.

The report also finds that Anglo American, Colgate-Palmolive, Ford, GE, PG&E and Taiwan Semiconductor Manufacturing are among the leading companies with the best practices in water management.

Survey responses were received from companies in 25 countries, with the most responses coming from the U.S. (59, 57 percent responding), the UK (14, 64 percent responding) and Japan (13, 45 percent responding). The highest response rates were from South Africa (100 percent), Germany (83 percent) and Switzerland (71 percent).

According to a recent EL Insights report, water stewardship is one of the top five responsible issues for corporations, say 52 percent of survey respondents, and 34 percent plan to address water management by increasing efficiency and reducing water use.

A recent ITT water survey also indicates that U.S. consumers (95 percent of respondents) rate water as “extremely important,” more than any other service they receive including electricity and heat.

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