Rio+20 Water Update

by China Water Risk 22 June, 2012

June 22- 45 companies ranging from Coca Cola to Nestle signed a special communiqué at the Rio+20 conference on sustainable development highlighting the urgency of the global water crisis and calling on governments to step up their efforts and to work more actively with the private sector, civil society and other stakeholders to address it. Read more here.

Separately, Ceres issues a report “Clearing the Waters” that analyzes changes in water risk disclosure by more than 80 companies between 2009 and 2011, finding that though reporting has risen, it is lacking especially in regard to data on financial impacts, quantitative water metrics and potential supply chain risks. The report covers water use in eight water intensive sectors: beverage, chemicals, electric power, food, homebuilding, mining, oil & gas and semiconductors.

Clearing the Waters expands upon research detailed in Murky Waters: Corporate Reporting on Water Risk in 2010. Key findings of the report include:

  • Significantly more companies are disclosing exposure to water risk, with a focus on physical risk: 87 percent of companies now report physical risk exposure versus 76 percent in 2009, with the biggest increases coming from the oil and gas sector.
  • More companies are making the connection to climate change: In 2009, only eight of the 82 companies assessed (10 percent) disclosed that climate change posed growing physical risks in the form of water scarcity, flooding or quality issues to their operations and supply chains. In 2011, that number jumped to 22 (27 percent).
  • There is a continued lack of quantitative data and performance targets: Despite improvements in overall disclosure, data on company water use and the financial impacts of water-related risks remain infrequent in financial filings.
  • There is growing, but still limited, disclosure on water management systems and performance.

“Most companies recognize the need to disclose water risk, but so far the information they are providing lacks specificity and the hard numbers their shareholders require to invest responsibly,” said Mindy S. Lubber, president of Ceres, which published the report. “Water issues are one of the most immediate and deeply felt impacts of climate change across the world, and leaders at Rio+20 are well aware of that reality. Whether through water scarcity, extreme weather or loss of property to floods, corporations and their suppliers across the globe are exposed to water risks and can do more to avoid them. Disclosure is the first step, and it must be followed quickly by action.”

In light of these risks, the report recommends that companies:

  • Undertake ongoing and more robust analysis of potential water-related risks
  • Augment qualitative disclosure with more quantitative data in SEC filings
  • Ensure compliance with the SEC’s guidance on climate change disclosure
  • Provide investors with information on how they are mitigating water risks

… more here

For “Resolutions Tracked By Ceres on Climate & Energy, Water, Sustainability Reporting and Sustainable Governance” … click  here.

Still not sure what Rio+20 summit is? Click here for an infographic.