Late last year, the Carbon Disclosure project released its first report under its new program, CDP Water Disclosure. The report details the impact water scarcity is having on the multinational corporations across the globe. The findings highlighted a reality that many of the world’s largest corporations are already experiencing firsthand—that water resource management is not just a public policy issue, it’s a corporate and commercial issue as well.
The report was compiled from the results of responses garnered from a questionnaire initially sent out to 302 companies (about 50% of the companies’ contacts, a result that the CDP calls “impressive for the program’s first year). With questions ranging from water strategies to management plans, along with queries about the water-related risks and opportunities anticipated by respondents, the questionnaire ultimately highlights corporate water use “within the context of local scarcity or abundance.”
The information in the final report was generated on behalf of “137 institutional investors representing US $16 trillion in assets” and their desire 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 hope is that the data provided in the report will allow multinational corporations—many of whom are of the largest water users in the regions in which they operate—to strategize and adapt in the face of increased scarcity and the consumer demand for increased sustainability.
Some key findings of the CDP Water Disclosure:
• 96% of responding companies were 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 onsite 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.
The CDP report is not alone in identifying water resource management as a key corporate concern. This week, in a blog entitled “Changing How Businesses Think About Water,” Snehel Desai (global marketing director for Dow Chemical Company’s Water and Process Solutions Business) writes, “By thinking differently about water and valuing it as a critical resource, firms can increase their bottom line, while having a more positive impact on their local communities.”
Desai goes on to explain that while businesses may care about water stewardship, “without incentives to improve water productivity, companies will focus elsewhere.” According to Desai, increased crop yields and the resulting reduction in water use makes US agricultural industry a perfect example of successful incentivized water resource management. “Because agriculture accounts for about 70% of world water use,” says Desai, “the industry has had the strongest incentive and greatest impact.”
Ultimately, focusing on water resource management as part of a whole corporate structure can only improve the bottom line and streamline the operations of the world’s largest companies. As Desai says, “Companies that rethink their water use and increase water productivity get better bottom-line performance and improved profits in the long-term. And by thinking of themselves as stewards of the water supply, firms can bring immeasurable benefits to their surrounding communities.”