Report Calls for Stewardship in Water Sector
A misguided approach to water-related risk management has become ‘business as usual’ at the world’s largest global companies, claims a report. Corporate focus is too often directed at reducing water use, which is an inadequate response to increasingly immediate substantive water risks, threatening shareholder value.
The international non-profit organisation CDP, formerly the Carbon Disclosure Project, says that water stewardship is the solution to achieving water security, one of the most pressing issues facing the world today. A significant step change, however, is required if stewardship is to be achieved. CDP calls on investors to take a leading role in guiding companies on this issue.
The report, entitled ‘A need for a step change in water risk management’, is written by Deloitte and based on data provided to CDP by 180 companies listed on the FTSE Global 500 Equity Index at the request of 530 investors representing US$57 trillion. Companies that use CDP’s water programme for reducing risks and capitalizing on opportunities relating to water and are analyzed as part of the report include BP, Bayer, Lockheed Martin, General Motors, Nestle, Wal-Mart and Unilever.
Among the report’s key findings:
“Although we are seeing great strides in corporate ability to identify water-related risks, the approach to managing those risks is misguided, said Cate Lamb head of CDP’s water programme. “If businesses are to become truly resilient to the growing threats that water poses, they must strive for stewardship.”
Will Sarni, director and practice leader, enterprise water strategy, Deloitte Consulting added: “While the framework for water stewardship is being solidified and many companies remain at the beginning of the journey, some are moving from managing water risk within their direct operations to evaluating and, in some cases, mitigating water risk across their value chain.
“For those companies mitigating water risk across their value chain, engaging in collective action programmes and taking responsibility for externalities such as access to clean water, sanitation and hygiene, leadership is within reach, if not already achieved.”