Water trails climate in board-room concerns, survey says

Just under half of 190 publicly listed organisations surveyed by the Carbon Disclosure Project (CDP) lack board-level oversight of water policies, strategies or plans.

Launching its Water Disclosure Global Report 2011 on 16 November 2011, the CDP drew a comparison with its similar climate-change report launched two months ago, which suggested that 94% of Global 500 companies reported board-level oversight of the topic.

“This is surprising,” CDP observes, “given that the majority of reported water-related risks and opportunities are recognized as near term.”

The water report is based on a questionnaire sent to 315 companies on the Global 500 index 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, says CDP.

Over half (59%) of companies surveyed reported exposure to water-related risks such as flooding, scarcity, and reputational damage. The majority of these risks were near-term: 64% of risks in direct operations and 66% of risks in the supply chain were identified as occurring between now and 2016.

Illustrating the urgency of water risk, more than one-third of responding companies (38%) had already experienced water-related business impacts, such as disruption to operations from severe weather events (eg, flooding) and water shortages.

Underscoring the opportunities associated with effective water management, 63% of respondents said that water presented commercial opportunities, most of which (79%) were near-term. The most commonly identified opportunities were associated with cost reductions from increased water efficiency, revenue from new water-related products or services, and improved brand value.

Paul Simpson, CEO of CDP, said, “We need to see more companies understand that water is a critical issue, requiring greater board-level attention than it currently receives. Those corporations that navigate the challenges effectively will be able to profit from the significant opportunities that result from a robust water strategy.”