Water: Last Chance to Measure & Disclose

By Paul Reig, Tien Shiao 6 June, 2013

Paul Reig and Tien Shiao from Aqueduct walk us through the process of measuring water risk for disclosure

Disclosure takes time. Enter water disclosure and many companies don’t even know where to start. In recognizing this, CDP and WRI hosted a webinar to provide step-by-step guidance on how to use Aqueduct to measure water risk and in doing so, address a part of CDP’s water questionnaire due on June 27th. Finally, disclosure made easy? Paul Reig and Tien Shiao from Aqueduct walk us through the process.

Barriers to corporate water disclosure

Company sustainability departments are stretched thin. Even when companies recognize the benefits of corporate disclosure, they may not have the capacity to respond thoroughly to all surveys. Through company interviews, WRI recently identified four main challenges to integrating sustainability, including:

1. sustainability not being integrated into long-term business strategy,
2. capital allocation decisions not valuing the benefits of improved sustainability,
3. goals of sustainability and financial teams not being well aligned, and
4. a need for better metrics to account for external environmental costs.

WRI is helping to address this last barrier by providing companies with an important tool to improve their water risk disclosure.
CDP has developed a platform for corporate water disclosure, enabling investors to get a deeper understanding of their water risks and opportunities. The organization’s  2013 Water Questionnaire came out in February, and the deadline to submit responses is only a few weeks away, on June 27^th. With the deadline looming for companies to respond, the World Resources Institute (WRI) aligned our Aqueduct Water Risk Atlas with CDP’s Water Questionnaire in order to facilitate a widespread and standardized corporate response.

Aqueduct makes reporting easier

Companies and others can use Aqueduct to evaluate the most prominent water quantity, water quality, regulatory, and reputational risks threatening their assets or suppliers.  Aqueduct is also easy to use and publicly available.
The tool’s simple, three-step process provides companies with detailed information on water-related risks for individual facilities and suppliers worldwide. This information is critical for putting use across a company’s operations and supply chains. This information is critical for putting water use throughout the company’s operations and supply chains into context, managing the associated water-related risks, and responding with water stewardship practices.
By using Aqueduct, companies can address the following questions included in CDP’s Water Questionnaire:

• 2.1: Are any of your operations located in water-stressed regions?
• 2.2: Are there other indicators (besides water stress) which you wish to report which help you to identify which of your operations are located in regions subject to water-related risk?
• 2.3: Please specify the total proportion of your operations that are located in the regions at risk which you identified in questions 2.1 and/or 2.2.
• 2.5: Do any of your key inputs or raw materials (excluding water) come from regions subject to water-related risk?
• 3.1: Is your company exposed to water-related risks (current or future) that have the potential to generate a substantive change in your business operation, revenue, or expenditure?
• 3.2: What methodology and what geographical scale (e.g. country, region, river basin, business unit, facility) do you use to analyze water-related risk across your operations?
• 3.4: Is your supply chain exposed to water-related risks (current or future) that have the potential to generate a substantive change in your business operation, revenue or expenditure?

In case you missed it, the webinar slides are now available on WRI’s Slideshare page. You can also watch a full video of the presentation, available for download here. (Note – viewing this video may require downloading a codec from GoToMeeting). If you are tasked with helping to fill out your company’s questionnaire, these resources will help make the task faster and more complete.WRI walked companies through this process in a webinar we hosted with CDP in May, providing step-by-step guidance on how to measure and report exposure to water-related risks.

Improved disclosure, improved water management

Furthermore, CDP and WRI are working to improve and standardize corporate water accounting and disclosure practices. The goal of this effort is to help rather than penalize companies for communicating their water sustainability management plans to investors. Disclosure leads to greater transparency, which in turn increases accountability and communication between government, corporate, agricultural, and domestic water users.
With half of the world’s cities experiencing water stress , we will need a wide range of stakeholders to be involved in not only understanding the problem, but working together to find new solutions. The tools that WRI and CDP are providing will improve how companies understand and disclose their water risk, and will help identify new, innovative solutions to better manage our water resources.

More on Measurement & Disclosure:

• Sink or Swim: As water risks rises in prominence we review whether more investors and corporates are taking action to mitigate risk and seek out opportunities
• Mapping Water with Aqueduct: With a water supply crisis as a top five risks facing the world, WRI’s Tien Shiao walks us through how Aqueduct can help companies and investors gain perspective
• Marcus Norton on the 2012 CDP Global Water Report: The Head of Water and Investor Initiatives at CDP gives his views on progress, stumbling blocks and hidden risks for companies and why collective action is the way forward
  
• WWF’s Stuart Orr on the Water Risk Filter: WWF’s Stuart Orr on the newly launched Water Risk Filter Tool. The tool is free and helps companies & investors assess exposure to water risks in their industry and basins where they operate and invest