By comparison, a report released by CDP in September 2011 showed

that 94% of Global 500 companies report board-level oversight of

climate change, suggesting that corporate understanding of water as

a business concern trails that of climate change. This is

surprising, given that the majority of reported water-related risks

and opportunities are recognized as near term.

“Water is a precious resource and the

importance of protecting local supplies should not be

underestimated at a management or board level.  It is only

through transparent disclosure by all water users and knowledge

sharing that companies can move towards a more secure water

future.” Michael Glade, director, water resources & real estate

of Molson Coors

Deloitte Touche Tohmatsu Limited (DTTL), one of the principal

sponsors of this project, supported CDP on analyzing the data and

developing the contents of the report.

The second annual CDP Water Disclosure Global Report is based on

a questionnaire sent to 315 companies on the Global 500 index that

are identified as operating in the most water-stressed locations or

industry sectors.

This year, 190 (60%) of these companies responded-a 10% increase

from the previous year-showing improved transparency on water

management. CDP Water Disclosure collects data annually on water

use, strategies, and risks and opportunities from companies on

behalf of 354 investors representing US$43 trillion in assets.

Over half (59%) of companies surveyed report exposure to

water-related risks such as flooding, scarcity, and reputational

damage. The majority of these risks are near term: 64% of risks in

direct operations and 66% of risks in the supply chain are

identified as occurring between now and 2016.

Illustrating the urgency of water risk, more than one-third of

responding companies (38%) have already experienced water-related

business impacts, such as disruption to operations from severe

weather events (e.g., flooding) and water shortages.

Further CDP Water Disclosure global report findings include:

• Companies are demonstrating that the relationship between water
  
  and energy use is widely understood, with 72% of companies
  
  reporting linkages or trade-offs between water and carbon
  
  emissions.





• Over a third of companies (38%) are unaware of whether they are
  
  exposed to water risk in their supply chains. In the Consumer
  
  Discretionary sector, which is dominated by industries that are
  
  particularly exposed to supply chain risk (e.g., retailers, hotels,
  
  resorts, and automobile manufacturers) this figure rises to
  
  41%.





• Energy companies report a high level of risk (72%), yet report
  
  the lowest levels of board oversight of water policies, strategies,
  
  or plans (36%).





• The biggest water risk facing businesses in their direct
  
  operations is water stress or scarcity (41%), followed by flooding
  
  (24%), reputational damage (23%), and higher compliance costs
  
  (21%). One company reported that it had already experienced a
  
  water-related impact at a cost of US$200 million.

Underscoring the opportunities associated with effective water

management, 63% of respondents say that water presents commercial

opportunities, most of which (79%) are near term.

The most commonly identified opportunities are associated with

cost reductions from increased water efficiency, revenue from new

water-related products or services, and improved brand value.

Paul Simpson, chief executive officer at CDP noted “Some of the

largest multinational companies have experienced the detrimental

effects that water can have on their bottom line. The findings

released today illustrate the very near-term nature of

water-related impacts. We need to see more companies understand

that water is a critical issue, requiring greater board-level

attention than it currently receives.”

“As a long-term investor in about

8,000 companies worldwide, NBIM takes water management seriously.

We welcome CDP Water Disclosure’s second report which provides

critical information for managing water-related risk in our

portfolio. Companies need to strengthen oversight of water issues

and get a better understanding of water-related risks in their

supply chains”. Anne Kvam, global head of ownership strategies,

Norges Bank Investment Management (NBIM)

The launch of CDP Water Disclosure’s second report at

Bloomberg’s central London offices today, along with the

availability of individual company responses at www.cdproject.net,

provides investors, companies, governments, and other stakeholders

with a range of information on companies’ water usage, and related

issues. 

The Carbon Disclosure Project (CDP) is an independent

not-for-profit organization providing a transformative global

system for companies and cities to measure, disclose, manage, and

share climate change and water information.

href=”https://www.cdproject.net/CDPResults/CDP-Water-Disclosure-Global-Report-2011.pdf”

target=”_blank”>The Water Disclosure global report is

available here