CDP Global Water Report 2012 released

Submitted by: Amanda Botes, Tuesday, October 30, 2012

<p>Water-related issues such as floods are increasingly affecting the top companies in the world (Image credit: <a href='http://www.123rf.com/photo_11116811_bangkok-thailand--november-5-2011--thai-flood-hits-central-of-thailand-higher-water-levels-expected-.html'>witthaya / 123RF Stock Photo</a>).</p>

Water-related issues such as floods are increasingly affecting the top companies in the world (Image credit: witthaya / 123RF Stock Photo).

More than half of the globe’s top companies have directly experienced negative impacts related to water issues, such as droughts, floods, and water scarcity in the last five years. This is according to the latest Carbon Disclosure Project (CDP) Global Water Report for 2012 that collated responses from 185 of the top 500 companies in the world.

Water as a risk to business

53% of the companies surveyed reported that they had been negatively affected by water-related issues, including damage to property and business interruption due to floods. This number is up from the 38% reported in the 2011 CDP Global Water Report. Furthermore 68% of the respondents identified water as being of “substantial risk to their business”, which has increased from the 2011 figure of 59%.

Of the risks reported by the companies, 62% were reported as having a short term impact in the next five years. 

Supply chain risk

The 2012 report indicates that there has been an increase in the percentage of companies that are aware of their supply chain risks associated with water issues, from 62%in 2011 to 71% in 2012. Furthermore 39% of the companies surveyed now require their key suppliers to report on water-related risks, this is an increase from 26% in 2011.

Collective action

Water-related issues are complex and the 2012 report highlights the importance of companies working collectively to address these issues and build resilience. 74% of the respondents stated that they do work with other organisations to address water-related issues. 

Overall response rates have remained the same

Even though more companies have reported that they have felt the impact of water related issues, the number of companies responding to the CDP Global Water Report 2012 has remained unchanged since 2011 at 60%.  The report observes “The static response rate is disappointing given the weight of investor interest in this issue and the increasing proportion of companies reporting water-related impacts, risks and opportunities.”

Water-related issues are not receiving the attention they should at board room level

The report highlights that although there has been an increase in the number of companies that are able to provide water accounting data, there has been very little change in the number of companies that are setting concrete water related targets and goals. There has also been minimal change at a strategic level where oversight and guidance on water management plans, strategies and policies is provided at a board room level.

The CDP Global Water Report

The CDP Global Water Report provides guidance for investors on how the top global companies are identifying, managing and mitigating risks and opportunities related to water. Out of the Global 500 a total of 318 companies were approached to answer the survey and allow the information to be publically reported on. 191 companies completed the survey and the report covers the responses from 185 companies.

The CDP also collates the responses of the Global 500 to climate change and have recently released the CDP Global 500 Climate Change Report 2012 based on the 379 responses.

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Amanda Botes