Water a business risk, opportunity for companies, finds CDP survey

One in five of the world's companies using the largest amounts of water have said they are facing business constraints due to droughts and other shortages, flooding and rising prices, a global survey has revealed.

The survey of the 302 biggest companies in the most water-intensive sectors, across 25 countries revealed that water security remains high on the corporate agenda, with 67 per cent of respondents reporting responsibility for water-related issues at the board or executive committee level.

The inaugural Water Disclosure Report released by Carbon Disclosure Project (CDP) last week has said that encouragingly, 89 per cent of companies have already developed strategies surrounding the issue and 60 per cent have set targets relating to reducing water waste.

The findings of the global survey underline the fact that companies are increasingly viewing water as more than a potential business risk, with several proactive ones making efforts to be sustainable on this front.

The report also indicated that some of the world's largest and most water-intensive companies also see business opportunities in strengthening their water management practices and offering services to address water woes.

The survey is one of the many that the highly influential CDP carries out. The organization conducts an annual study of what companies are doing to measure and reduce greenhouse gas emissions on behalf of institutional investors holding $16trillion USD of assets.

The water survey was requested on behalf of these 137 institutional investors to increase transparency and accountability on water scarcity and other water-related issues, and help drive sustainability.

The water survey had asked the world's largest companies for information on their water use. It found that water is already impacting business operations, with more than half of respondents classifying their water risk as current or imminent within one to five years.

News reports quoted head of CDP Water Disclosure Marcus Norton as saying, "We see corporations using their imagination and looking at these challenges as opportunities for growth. From some of the feedback from companies, I think it's really a reflection that companies have been through this with carbon."

"This is a strategic issue. Water is fairly cheap, often undervalued and underappreciated. Companies I'm sure will save some costs by measuring and managing their water use, but by properly understanding the watershed they operate in, and their suppliers operate in, they will put themselves in a position to understand and mitigate risk, and to understand and seize opportunities. How I think water will really hurt companies is not that it becomes more expensive, but that it runs out or they don't have access to it". he added.

The report said companies in the food and drink, tobacco, and metals and mining sectors were most at risk. Among the concerns listed by them were fines and litigation for pollution.

Companies in the chemical and pharmaceuticals & biotech sectors had high response rates, at 100 per cent and 81 per cent while those in the oil & gas and construction, infrastructure & real estate industries lagged behind. Overall, about 80 per cent of companies opted to report their results publicly, the report added.