Water Management and Stewardship: Benchmarking Corporate Practices (2019)

Detailed Description

This report provides an update on the 2017 benchmarking exercise examining the state of water risk exposure and stewardship in food and beverage (F&B), garment and mining sectors. For this edition, Sustainalytics, in cooperation with AP7, repeated the analysis of the same 299 companies on the five universal and three sector-specific indicators focusing on the key aspects of corporate water management. Below, we present the 2019 status along with a comparative analysis of the developments since the initial benchmarking. Notably, on carrying out the assessment, we observed evidence of a positive engagement impact and accordingly this report also discusses the related benefits to investors and companies alike. Reflecting our belief in investors’ role in encouraging companies to improve their environmental, social and governance (ESG) performance and our view that water challenges require integrated responses, AP7 and Sustainalytics encourage all stakeholders to systematically explore and utilise the synergies in active communications and collaboration.

Key Takeaways

Little progress

• While water continues to be high on the agenda, not nearly enough action and impact can be seen on the ground.
• The state of corporate water disclosure remains limited and patchy.
• Overall, corporate water management does not appear to have improved: even though 30 percent of the companies in our universe received a better total score compared to 2017, 39 percent had in fact declined.
• Specifically, efforts on water intensity have taken a clear turn for the worse, with either the related disclosure or performance, or both, having notably deteriorated among the companies analysed.

Glimmers of hope

• We observed most progress within the garment sector.
• Water policy remains the measure with the biggest uptake across our universe, but we also witnessed a notable increase in board-level responsibility for water management and/or sustainability.
• The poor disclosure may be masking substantial efforts underway behind the scenes.

Evident engagement impact

• Companies that investors engaged with in the two interim years improved their performance much more than the wider group.
• For investors, engagement not only helps obtain pertinent information beyond public disclosure, but also provides an opportunity to contribute to enhanced water stewardship.