When are publicly listed businesses going to come to terms with the need to take serious account of environmental, social and governance (ESG) risk?
More than half (53%) of 400 companies operating in water dependent or vulnerable industry sectors are failing to conduct a comprehensive risk assessment on the fundamental and accelerating risk of water security, according to a report just out.
CDP, the global non-profit group running the disclosure system that shows how companies manage their environmental impacts, published the first global assessment of corporate efforts in tackling water security today.
Its global water report, "Accelerating action," puts a spotlight on the companies achieving an A rating for their actions to address water security.
It highlights the industries most exposed to water risk as consumer staples (82%) and utilities (75%), "due to the close links between water and climate change." Other sectors evaluated in the report include consumer discretionary, energy, healthcare, industrials, information technology and materials.
The companies have been evaluated on their disclosed water management practices by CDP and South Pole Group, the Zurich-based business that began as a project-driven company focused on developing and selling high-quality carbon credits, and now provides climate solutions. Together they have considered each company's water risk assessments and response strategies, and how these are factored into business planning, based on publicly available information.
"Building on both our long-standing knowledge in climate change mitigation interventions and close work with CDP, we can firmly conclude that a water stewardship approach offers clear benefits to companies, especially to those most at risk. It is now up to companies to capitalize on these opportunities and get ready for a water-scarce future" says Renat Heuberger, CEO at South Pole Group.
An example from my own past reporting here- it was Coca-Cola's recognition of its acute dependence on water – particularly in certain geographies prone to drought – that helped lead the company towards integrated reporting, a more holistic form of company reporting that takes into account non-financial factors.
CDP has included eight businesses from four sectors in the CDP Water A List – which highlights those companies that are making progress to manage water resources in a sustainable way – based on their approach to water management. These eight companies are said to "take action to mitigate corporate water risk and realize opportunities in ways that not only reduce their own impacts, but critically improve water security for the environment and other water users."The eight companies on the CDP Water A List in 2015 are: