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CDP Water Disclosure

- The Carbon Disclosure Project and water
- A new initiative
- Driving better measurement and transparency of water issues
- Why participate in the CDP Water Disclosure program?
- Process and timeline

 

The Carbon Disclosure Project and water

The Carbon Disclosure Project (CDP) is an independent, not-for-profit organisation, which holds the largest database of primary corporate climate change information in the world. Its aim is to inform investors of the risks and opportunities presented by climate change in the corporate world. See a factsheet on the CDP's climate change information bank here.

The CDP also collates information on companies' water risks and opportunities. It works as a catalyst for a global movement towards sustainable corporate water management, which the CDP says is one of the most significant challenges facing the global economy. Demand for water is projected to outstrip supply by 40% by 2030, when an estimated half of the world’s population is likely to live in areas of high water stress.

Successful businesses will be those that can capitalise on changing global water availability, by measuring and controlling their water use effectively while managing the risks that water shortages could pose to their supply chain.

A new initiative

The United Nations forecasts that by 2030 almost half of the world's population will live in areas facing water stress or scarcity.

At the end of 2009, the CDP launched a new programme designed to increase the availability of high quality business information about the risks and opportunities associated with water scarcity and other water-related issues. The programme is called CDP Water Disclosure.

CDP Water Disclosure uses critical water-related data from the world’s largest corporations to inform the global marketplace on investment risks and commercial opportunities. The data provides valuable insights into the strategies deployed by companies to manage water resources and can be used to help drive investment towards sustainable water use.

CDP Water Disclosure, backed by lead sponsors Norges Bank Investment Management, Molson Coors and Deloitte, provides a system enabling businesses to report their use of water and their exposure to changing patterns of water availability.

In 2010, CDP Water Disclosure sent a questionnaire on behalf of institutional investors to approximately 300 of the world’s largest corporations in water intensive sectors.

The questionnaire asked companies to measure and disclose information on water usage, the risks and opportunities in their own operations and their supply chains, and details of their water management and improvement plans.

The results were made available to endorsing investors and were summarised in an annual report, the first of which was produced in the last quarter of 2010. 

This water questionnaire is now sent every year to the world’s largest companies drawn from industry sectors that are water-intensive or are particularly exposed to water-related risk in their supply chains. CDP Water Disclosure continues to expand its global reach, and it currently targets companies that are in sectors that are from the:

  • Largest 500 companies globally (FTSE Global Equity Index Series)
  • Largest 100 Australian companies (ASX 100)
  • Largest 100 South African companies (JSE 100)
  • Largest 500 US companies (S&P 500)

Driving better measurement and transparency of water issues

By acting as a platform for information sharing, the CDP aims to:

  • Increase investor and business awareness and understanding of the financial risks and opportunities around water
  • Make meaningful reporting on water standard corporate practice globally
  • Provide data that informs decision-making by investors, companies and governments

By working with other standard-setting bodies the CDP also aims to support and accelerate the development of consistent metrics and performance benchmarks.

Why participate in the CDP Water Disclosure programme?

The incentive for corporations to complete the CDP’s questionnaire is that by making the effort to measure and record their water usage they will be able to manage it better. According to the CDP, by participating in the Water Disclosure initiative an organisation will also be able to demonstrate:

  • Its ability to provide comparable and relevant data about water usage in response to shareholders' requests
  • Increased awareness of water hot spots so that it can begin to reduce them
  • Business leadership in understanding the risks around water resources
  • How it is creating opportunities for innovation in this area
  • How it is future-proofing itself from water impacts

Process and timeline

November - January

Signatories review and sign the questionnaire

1 February

Questionnaire is sent to the largest corporations globally by market capitalisation in water-intensive sectors

30 June

Deadline for companies to respond to the questionnaire

September

Consultation phase for amendments to annual questionnaire

November

Findings launched globally

All information sourced from Carbon Disclosure Project

 

Related Internet links:

- Carbon Disclosure Project

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