Surprises flow from CDP, WBCSD water reports

Surprises flow from CDP, WBCSD water reports

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The past few weeks marked measurable progress in understanding water risk, the development of water stewardship strategies and collective action, thanks in large part to the release of the CDP Global 500 Water Report [PDF] and the World Business Council for Sustainable Development (WBCSD) Action 2020 Priority Areas.

Both reports including significant findings about the state of water management and stewardship, and can be used by business leaders to successfully mitigate water risks.

CDP Global Water Report

The CDP Global Water Report 2013 was launched at the CDP Global WatA pair er Forum on Oct. 31. The report was produced for 530 institutional investors representing about $57 trillion in assets, and is based on information submitted to CDP by 180 Global 500 companies. It notes that "companies are more aware of the breadth and significance of water-related risk, such as business interruption due to inadequate infrastructure, supply chain disruption due to water scarcity and reputational damage."

Other compelling findings included:

More than half of respondents (53 percent) already have experienced detrimental impacts related to water in the past five years.

Almost three quarters of respondents (70 percent) have identified water as a substantive business risk, and said these risks also are becoming more immediate.

The majority (64 percent) of reported risks are expected to impact businesses now or within the next five years. In one year, the number of near-term substantive risks reported by companies has increased by 16 percent to 614 risks. Based on the responses, anticipated financial impacts were estimated to be as high as $1 billion.

However, most respondents are currently focusing their efforts on improved water efficiency efforts within their direct operations -- essentially "water management" and not "water stewardship."

Water-related risks can't be completely mitigated with water efficiency and reuse within direct operations. Stakeholders must be engaged and watershed-level programs must be adopted to address water risks and drive innovation. Only 6 percent of respondents set concrete targets or goals for community engagement, 4 percent for supply chain, 3 percent for watershed management and 1 percent for transparency. Virtually no respondents set concrete targets or goals around public policy.

To drive stakeholder engagement, companies should quantify business value at risk from water scarcity across their value chain, and frame how water factors into business growth. Companies also need to think about "license to grow" with regards to water, and determine if there's adequate water to support business growth.

Action 2020 Priority Areas

Coming on the heels of the CDP report, the WBCSD launched the Action 2020 goals, one focus of which is water. The Action 2020 goal for water is meant to address the need to ensure that an "adequate quality and quantity for all users is more in balance with renewable water supplies and ecosystem requirements based on the 2010 baseline." Initiatives include:

  • Reduce by more than 10 percent the rate of agricultural water withdrawals in water-stressed aquifers and river basins (includes food, feed, fiber and biofuel).
     
  • Reduce by more than 10 percent the amount of industrial and domestic untreated wastewater discharge (for example, by increasing wastewater treatment and developing/implementing policy requirements).
     
  • Eliminate open defecation by 2025: Ensure basic drinking water, adequate sanitation, hand washing and menstrual hygiene management in schools and health centers; ensure basic drinking water and hand washing at home and in communities by 2030; and ensure adequate sanitation at home by 2040.
     
  • Make significant efforts to improve watershed collaboration between all stakeholders to reduce shared water risks.

Lessons from the reports

The risks and business opportunities identified in the CDP report reflect the priorities of the Action 2020 Water Priority. There's a clear alignment of a call to action and strategies identified by companies responding to water risks.

Top water photo by Leah613 via Shutterstock