At A Glance: Water Risk Dashboard
By Hubert Thieriot 18 September, 2017
CWR's Thieriot on a new dashboard that helps you gauge the water risks your operations/suppliers are exposed to
We were very honoured last week to join the International Green Finance Forum in Beijing. In particular, we had the chance to participate in a panel led by Michael Sheren (Bank of England), with distinguished co-panelists such as ICBC, SEB, Trucost, Carbon Tracker and CUFE. It was a great opportunity to share thoughts and progress on Environmental Risk Analysis. Whilst much remains to be done, we clearly witnessed strong momentum toward the embedding of environmental risks in decision-making, with a growing number of institutions joining in.
When it comes to water risk, it is all about location, location and location… Whilst it has become a truism, we have not wrapped our head around it yet, nor are we fully tapping into new capacities for location-based risk assessments. At China Water Risk, we are developing a dashboard that can help you look at water risks at a glance, across all your assets. And that is just a beginning, as more will come very soon.
Location, location, location
Thanks to growing georeferencing capacities, it is now possible to locate your assets or suppliers more accurately than ever before. Last month, we released a report on Chinese textile manufacturers, so we thought: let’s do an exercise with renowned fashion brand and its thousands of suppliers.
See at a glance the location of your suppliers
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One can clearly see the hotspots: altogether, Yangtze River Delta and Pearl River Delta represent 75% of the brand’s total suppliers (55% and 20% respectively) as shown in the map below.
Heavy assets concentration exacerbates risks
In and of itself, this is already a significant risk factor: it means that this supply chain is extremely reliant on what these very few provinces decide their industry should look like. Note that this is not a peculiarity of the brand we picked: we did the exercise with other international brands and found similar exposure.
More than 75% of Fashion Co. B are within targeted areas of ‘Water Ten’
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The Yangtze River Delta is a global hotspot of textile industry, with for instance 51% of global synthetic fibres sourced from there. No surprise then that this region has been highlighted in the Water Pollution & Prevention Action Plan (so-called ‘Water ten’), with tighter targets and deadlines, creating significant regulatory risks for the textile industry – more on this here.
Various risks at a glance
We also look at several water-related risks across companies’ assets or suppliers, be it water stress, water pollution, flood, drought or storm surge, as shown below. Clearly, some factors matter more than others depending on where your operations are located. Using such an approach, one can quickly determine the nature of risks that he should pay the most attention to. And also, this helps better target engagement with operations, suppliers or investees.
Target your engagement
In most cases, you cannot engage on a regular basis with all your operations, suppliers or investees. Therefore, you might be willing to target the most exposed assets (see below) and double-check that they have relevant mitigation or adaptation plans.
Beyond water & China – A new initiative, stay tuned!
Because needs for environmental risk assessment aren’t limited to China and water, we are soon launching a new initiative. It will allow you to gauge and compare environmental risks globally and across many factors, such as drought, floods, deforestation, storm surges, fires, earthquakes, air pollution, heat waves, climate change scenarios etc.
This will help you, brands, corporates or investors, be more proactive about your environmental risks. Contact us to know more, and stay tuned!
- 2017 World Water Week: Key Takeaways – The theme for World Water Week 2017 was ‘Water and Waste: Reduce & Reuse’ and perhaps unsurprisingly textiles was a key focus area along with circularity. China Water Risk’s Dawn McGregor shares both water and textile takeaways from Stockholm
- Toxic Phones: China Controls the Core – We review CLSA U®’s report which warns that transitional risks are abound as China says no to pollution and yes to a high tech future. What are the top-5 ‘bewares’? China Water Risk’s Debra Tan expands
- Electronic Brands: Sustainable Or Not? – The new CLSA U® report cautions that current brand strategies only focus on short-term profits despite looming risks. Is this sustainable? China Water Risk’s Woody Chan looks at what leaders like Apple & Samsung are doing across greening supply chains, recycling and more
- Apple & Rare Earth Recycling – Although Apple is leading smartphone giants in green commitments, its transparency and traceability of rare earth supply can be improved. Plus, what lies ahead for rare earth recycling? Researcher Hongqiao Liu expands
- GPC: Smart Subsidies For Renewables – China’s current subsidy system for renewable energy is overburdened. However, China Water Risk’s Yuanchao Xu sees positive change ahead with the recent initiation of Green Power Certificate trading
- Water-nomics: Trade-offs Along The Yangtze – With significant economic, water use and pollution disparities along the Yangtze River, China Water Risk & the Foreign Economic Cooperation Office of the Ministry of Environmental Protection, publish a joint brief to explore strategies to find the right development mix. Check out some of the key findings in this review
- Pearl River Delta: 5 Water Must-Knows – China’s Pearl River Delta generates 9% of GDP but water challenges lurk behind the dazzling economic success. Don’t know what these are? China Water Risk’s Feng Hu shares 5 water must-knows for the region
- 5 Regulatory Trends: From Enforcement To Finance – Since 2016, China’s environmental policy landscape has undergone a series of important changes. CWR’s Xu summarises key regulations & 5 trends you need to know, from greater enforcement to green finance
- Fast Fashion: Sucking Aquifers Dry? – Groundwater is over-extracted to grow cotton. As the world’s largest importer of cotton, is it China’s fault? Or is fast fashion to blame? China Water Risk’s Tan explores trends in the growth across major brands, China’s imports & global cotton production
Read more from Hubert Thieriot →