31 October 2013, London and New York – CDP issued the Global Water Report 2013. 1,036 of the world’s largest corporations which are either operating in water-intensive sectors or exposed to water-related risks were asked to disclose. So far 593 companies have already disclosed a 59% increase in comparison to 2012. In the report, CDP and Deloitte Consulting LLP present results of the analysis based on the water disclosure of 184 Global 500 companies; a 60% response rate. Unfortunately the response rate from Greater China Companies at 20% still lagged behind the rest of the world.

The majority of the companies making up the Greater China list were from Hong Kong or Taiwan. As the world’s second largest economy and with China being ranked in the top two most water risk countries, how can we get an accurate picture of global water risk without a greater representation of Chinese companies and State Owned Enterprises. This definitely needs to be addressed in the 2014 survey.

The highest response rate was from the Consumer Staples sector (76%) and the lowest from the Energy and Industrials sectors  (both with 47%). The report was supported by 530 investors with AUM of US$57 trillion.

Some good and bad news:

First the good news, corporations are increasingly recognising water as a business risk, as water related risks become more prominent and more immediate:

 

• 70% of respondents identified water as a substantive business risk. This represents a 17% increase in just two years
• Water presents an immediate risk to business with 65% of reported risks (for direct operations) and 62% (for supply chain) expected now or within the next five years
• In fact 53% of respondents reported having already experienced detrimental impacts related to water in the last five years
•  Associated financial costs for some companies were as high as US$1 billion

Also:

• 93% of respondents (up from 92% in 2012) have a water policy, strategy or management plan in place
• 66% of the companies that responded have set concrete water related targets or goals, which is up from 55% in 2012

Now for the bad news, companies’ efforts to tackle water risk remain ‘inadequate & misguided’.

 

Firstly, water risk within the supply chain still remains poorly understood …

• Only 37% (down from 39% in 2012) that require key suppliers to report on water related risk
• and only 4% of respondents have actually set concrete targets and goals for suppliers 

Secondly, water related corporate disclosure still remains patchy …

• Reporting of water withdrawals has remained high, with 99% (up from 97%) of respondents reporting on this area
• Reporting on water recycling/reuse has seen a slight increase to 66%
• However reporting and identifying water discharges has actually fallen from 85% in 2012 to 83% in 2013

In addition, water is still not receiving the attention it needs in the boardroom …

• Board-level oversight of water-related policies remaining unchanged at 58% from 2011 and 2012

See the full report here and the press release here.