Hello and welcome to the eve of fire season. A preview of what much of the West and Southwest can expect is already on display in Colorado and New Mexico, and if climate models and weather predictions are to be believed, many of us are within firing range.
In the aftermath of any wildfire, watersheds and water resources are particularly vulnerable, and many communities struggle to protect themselves against post-fire erosion, debris flows, and flooding hazards. That’s when it’s time to call in the professionals.
Next month in Denver, Stormcon—the national conference hosted by our sister publication Stormwater magazine—will include a full-day course on August 21 titled “Fire & Rain: Rapid Assessment and Emergency Mitigation Measures Following Wildfires.” During the presentation, attendees will get a chance to hear firsthand from experts who have “played key roles in emergency post-fire efforts throughout the western states.” You can find out more about StormCon and register for the Fire & Rain seminar here.
Whether it’s public water utilities, stakeholder organizations, or private interests, managing resources means managing costs. As such, efficiency-related programs and projects are often sought and implemented by companies and private interests with a stake in reducing the bottom line and staying out of the red. Sometimes, water efficiency makes the most sense in anticipation of future shortages and conveyance challenges.
And sometimes Mother Nature forces your hand.
Corporations and large-scale commercial interests are not necessarily interested in political debates when their profit margin is threatened. Often you will see sudden, immediate action after years of inattention or ambivalence when a company or agency finds themselves unexpectedly looking down the barrel of a gun.
Our private industry may be rounding the corner on such a moment.
The recent report Clearing the Waters: A Review of Corporate Water Risk Disclosure in SEC Filings, released by Ceres, reveals that “overall corporate disclosures of water-related risks in financial findings have increased since 2009” and posits that “climate impacts further exacerbate water risks by increasing variability in precipitation patterns and the occurrence of extreme weather events.” As such, the report explains that because the global economy relies upon water resources for basic living requirements as well as energy generation, fuel processing, and product transportation, any disruption of the water cycle translates to real costs for commercial and industrial entities.
The report is compiled from information gathered from 82 companies that were part of an initial 2010 report by Ceres and aims to analyze corporate disclosures in light of a 2010 guidance issued by the SEC regarding investment risk reporting and climate change (www.triplepundit.com/2010/01/sec-votes-to-issue-guidance-on-climate-change-risk-disclosure/). Eight different water-intensive sectors are analyzed in the report, including beverage, chemicals, electric power, food, homebuilding, mining, and oil and gas. What the report ultimately reveals is that companies are on notice about the correlation between water resources, climate change, and commercial viability.
Some report highlights:
* Between 2009 and 2011, the number of companies disclosing water-related physical risks increased from 76 to 87%.
* While only eight of the 82 companies surveyed in 2009 included climate change as a viable risk to water resources, in 2011 that number rose to 22 companies, or 27% of all the companies surveyed.
* The percentage of oil, gas, and chemical companies reporting exposure to water risks increased from 31 to 45%.
* 46% of food and beverage companies reported water-related regulatory risks.
* The Texas drought has resulted in $7.62 billion in damages to crops and livestock, while the state’s cotton producers suffered another $2.2 billion in losses: both of these shortages have translated into higher production costs and higher prices for everything from groceries go blue jeans.
* Flooding in Thailand in 2011 disrupted the country’s manufacturing sector causing 27.7% fewer hard drives to be shipped, decreased sales for Honda by 30%, and more than $42 billion in damages.
While the information in the report is provocative and persuasive, the report’s authors admit that better data is needed from the corporations themselves if viable action is to be taken. The report highlights two areas where SEC guidance is not being adequately followed: quantitative data and performance targets in financial filings and discussions of supply chain risks.
In the report’s introduction, the authors conclude “much reporting remains weak and inconsistent, especially in regard to data on overall water use, financial exposure, and potential supply chain risks.”
In a statement about the report, Mindy S. Lubber, president of Ceres, reiterated this theme saying, “Most companies recognize the need to disclose water risk, but so far the information they are providing lacks specificity and the hard numbers their shareholders require to invest responsibly. Disclosure is the first step, and it must be followed quickly by action.”
The report lists four ways that companies can improve their SEC disclosures:
* Undertake more rigorous analysis of potential water-related risks.
* Augment qualitative disclosure with relevant quantitative data.
* Ensure compliance with the SEC’s guidance on climate change disclosure.
* Provide investors with risk management information.
You can download a copy of the Ceres report here.