CDP Global Water Report 2012: Not Enough Boardroom Attention

by China Water Risk 24 October, 2012

23 October 2012, London and New York – Carbon Disclosure Project (CDP) issues the Global Water Report 2012. The report surveyed 318 companies listed on the FTSE Global Equity Index Series (Global 500) which are either operating in water-intensive sectors or exposed to water-related risks. 60% (191 companies) responded, with the highest respond rate from Health Care sector (77%) and the lowest from Energy sector (44%). The report was supported by 470 investors with AUM of US$50 trillion.

Some good and bad news:

Water risk is a prominent and rising risk as businesses face increased water risk…

  • 68% respondents report exposure to water-related risks (up from 59% in 2011)
  • 53% of Global 500 companies experienced water-related business risks such as business interruption and property damage from flooding (up from 38% in 2011)
  • Associated financial costs for some companies were as high as US$200 million

Water represents a strategic opportunity to improve financial & brand performance…

  • 71% of respondents reported 319 new water-related opportunities
  • 79% of respondents reported opportunities with a timeframe to materialize within 5 years, and a sales potential of >€800 million by 2020

More assessing and addressing exposure to water-related supply chain risk…

  • 71% of respondents are now able to state whether their businesses are exposed to water-related risk (up from 62% in 2011), yet 29% are still unaware
  • 39% of respondents now require key suppliers to report on water-related risks (up from 26% in 2011)

Water is a complex and shared resources: businesses are taking collective action…

  • 74% of respondents are joining forces to address water-related issues from increased business continuity, securing licenses to operate and increased brand value
  • Collective action will continue to be featured in companies’ water strategies and overall business strategies
  • As the strategic importance of water-related issues grows, more Global 500 companies are expected to leverage collective action in response

But water is still not receiving the attention it deserves in the boardroom …

  • Board-level oversight of water-related policies remains unchanged at 58% from 2011
  • Proportion companies of setting concrete water-related goals and targets changed little at 55%

See the full report here and the press release here.