corporate perspectives on water presentation
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Corporate Perspectives on Water PresentationTRANSCRIPT
Corporate Perspectives on Water
How are leading companies responding to this emerging challenge?
2 Lead Sponsors
Corporate Perspectives on Water – How are leading companies responding to this emerging challenge?
Corporate Citizenship Knowledge Series
27 September 2012
Marcus Norton Head of Water & Investor Initiatives, CDP [email protected]
3 3
CDP seeks corporate disclosure on behalf of investors
Investors
Corporations
Authority
Information
Information
Authority
4 4
Investors are waking up to water risk
“Water scarcity on a global scale represents a financial risk to the fund. Economic growth, industrialisation and population growth are driving the increasing demand for water, while factors such as climate change, pollution and regulation are affecting the supply and costs related to water.”
NBIM Investor Expectations, 2009
“Corporate disclosure of water-related risk is seriously inadequate … The financial impact of water shortages on sectors and companies is unclear, because information on water use data and impacts is spotty and partial.”
JPMorgan, Watching Water, 2008
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Material impacts already felt by companies
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Catalysing action on corporate water stewardship
Raise awareness and understanding of the business risks and opportunities
around water
Support and accelerate the
development of standard measures and performance
benchmarks
Make meaningful reporting on water standard corporate
practice globally
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Disclosure drives behaviour change
Disclosure process improves
performance
• “What gets measured gets managed”
• Qualitative disclosure drives strategic thinking
Benchmarking accelerates
learning
• Comparing performance and strategies with peers, neighbours and leaders helps all to learn faster
Data informs investor analysis and engagement
• Investors increasingly use CDP data to target and inform engagement
• As water data matures expect its integration in analysis
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CDP uses a 3-part questionnaire
1. Water management & governance
2. Risks & opportunities
3. Water accounting
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Questionnaire sent to ~650 companies in 2012
S&P 500
JSE 100 ASX 100
Global 500
Focus is on companies in industry sectors that are most water-dependent and have greatest potential to impact water resources, including: • apparel • chemicals • food & beverage • metals & mining • oil & gas • pharmaceuticals • power generation • semiconductors
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Overview of 2011 Global findings
1. Water is impacting companies already and presents a significant near-term risk 38% of companies have suffered
detrimental impacts from water in the past 5 years
59% report risks; two-thirds of these are near-term (current or within 5 years)
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Risks reported
None 41%
59% of companies report at least one risk
Direct operations only
32%
41
24 23 21
18
8 6 0%
10%
20%
30%
40%
50%
Direct operations Supply chain
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Direct operations & supply chain
23%
Water scarcity reported most frequently
Supply chain only
4%
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Overview of 2011 Global findings
1. Water is impacting companies already and presents a significant near-term risk 38% of Global 500 respondents have
suffered detrimental impacts from water in the past 5 years
59% report risks; two-thirds of these are near-term (current or within 5 years)
2. The maturity of corporate responses to water risk varies considerably Board-level oversight lags climate change
Awareness of supply chain risk is limited
There is a growing body of leading practice to learn from
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“Corporate Water Management Maturity”
Improve operational water
performance
Understand how the company interacts with
basins
Develop a comprehensive water strategy
Leverage improved
performance in the value chain
Advance sustainable water management and collective action
Performance
Compliance
Internal actions
Context
Business risks
External impacts
Business opportunities
Policies, governance &
targets
External engagement
Business risks (value chain)
Internal actions
(value chain)
Performance (value chain)
Current state
Implications
Response
Key
Source: CEO Water Mandate “Corporate Water Disclosure Guidelines” Public exposure draft, August 2012
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Corporate responses to risk
95%
93%
57%
57%
26%
0% 20% 40% 60% 80% 100%
Developed specific water policies, strategies or plans
Responsibility for water policies etc. at board or executive committee level
Set a concrete water-related performance target or goal
Reported a figure for total water withdrawal
Required key suppliers to report water use, risks and management
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Supply chain awareness is limited
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23
7 7
41
24
48
36
43 41
29
47
38
0%
10%
20%
30%
40%
50%
Pe
rce
nta
ge o
f re
spo
nd
en
ts Respondents that are unaware of potential risk
Direct operations Supply chain
• 38% of responding companies have not assessed whether or not they are exposed to supply chain risk
• 26% of responding companies require key suppliers to report water use, risks and management plans
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Reported exposure to risk vs. response rate
0%
20%
40%
60%
80%
100%
0% 20% 40% 60% 80% 100%
Percentage of respondents reporting exposure to risk
Re
spo
nse
rat
e
Industrials
Information Technology
Health Care
Consumer Staples
Materials
Utilities
Energy Consumer
Discretionary
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Leading practice examples
Operational performance
Anglo Platinum, Ford
Basins/context
Coca Cola, SABMiller
Strategy & targets
BASF, Bayer, L’Oréal, Unilever
Value chain
Astra Zeneca, H&M, Puma
Collective action
Hess, Sanofi Aventis
18 Lead Sponsors
Questions
Marcus Norton Head of Water & Investor Initiatives, CDP [email protected]
Corporate Perspectives on Water How are leading companies responding to this emerging challenge?
+1.7million
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The EA and water companies
should work together to plan the best ways to distribute water
fairly and economically, in the interests of customers and
the …
The EA should decide how much water is available
and water companies should bid
against each other for their supplies, to get the water their customers …
I don't mind which one, 11%
I don't know, 8%
In areas of the country where water is scarce, which one of the following options do you think is the best approach?
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Transfers do happen…
100,000,000 litres
saved
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70,000,000 litres
saved
32
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Sea
Water
Treatment
Works
Wastewater
Treatment
Works Advanced
Treatment
Works
Water
Treatment
Works
Wastewater
Treatment
Works
Town
Town River
560,000 litres
saved
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xxxxxxxxx
xxxxxx
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162 litres/person/day
130 litres/person/day
