Insights from Mumbai: CDP’s 2017 Water Forum and Global Water Report

The Forum

This November, over a hundred companies and NGOs came together in Mumbai for CDP’s 2017 Water Forum. The convening focused on how companies can stay ahead of the sustainability reporting curve and learn how to adopt best practice water management. Participants discussed the latest in corporate water and sustainability reporting, and perspectives on advancing water security. Notable Mandate endorsers at the event included H&M, Tata Steel, Monsanto, Hindustan Unilever, Diageo India, and Monsanto.

The Pacific Institute’s Tien Shiao attended the Water Forum and spoke at two sessions on behalf of the Mandate.

The first session focused on current practices in corporate water target-setting and establishing a clear pathway for companies to move from a basic efficiency approach to a more advanced approach of context-based target setting. While 63 percent of companies reporting to CDP measured and monitored their water use, most corporate targets are short-term, and only 41 percent of companies require water management information from their suppliers. Shiao emphasized that there is a need for longer-term corporate targets, with sound water accounting data, leveraging companies’ procurement power.

The second session discussed the Business Alliance for Water and Climate Change (BAFWAC), a consortium of companies who recognize the considerable environmental, social, and economic value at stake due to worsening water stress and climate change. BAFWAC signatories are taking cutting-edge actions to confront these critical issues. At the session, Shiao and the BAFWAC partners introduced new case studies on innovative projects addressing climate and water.

Shiao noted that Indian companies are well aware that water issues are critically important, given that 54 percent of India faces high to extremely high-water stress. Forum attendees broadly agreed about the climate change impacts the country is experiencing and the need for improved water security in India’s public and private sector actors. Rajendra Singh, a well-known Indian conservationist, ended his forum keynote with, “climate is water.” Forward-thinking Indian companies such as Tata have analyzed their water footprints and developed water management strategies to mitigate their water risk. However, there is more for Indian companies to do, such as accounting for the sustainability thresholds of basins in their water strategies and increasing disclosure on water performance.

The Report

The focal point of the forum was CDP’s newly released 2017 Global Water Report, which discusses and analyzes disclosure results from over 2,000 companies. This year’s report highlighted that a growing number of companies are realizing the critical importance of water security to their operations, supply chains, and social license to operate.

2017 saw a significant increase in companies disclosing to on water use to CDP, investing in water-related projects, and engaging in water stewardship.

At the same time, water-related risks are also rising. Companies reported more than 3,700 water risks in the 2017 survey. The top driver of this risk is increased water scarcity resulting in higher operating costs. Companies are beginning to not only disclose these risks but also address them; 56 percent of companies in this dataset have set water-related targets or goals.

How Mandate Endorsers Performed

CEO Water Mandate endorsing companies were among those disclosing to CDP in 2017. As a requisite for being part of the Mandate, all endorsing companies must provide an annual communication on progress (COP) in managing water-related risks and impacts. If a company chooses to disclose their progress through CDP, this automatically counts as their CEO Water Mandate COP.

In 2017, about half of the 140+ Mandate endorsers disclosed progress via CDP. Of those endorsing companies, 17 made it onto the Water A List – this list celebrates companies that achieved an “A” rating according to CDP’s methodology. Mandate endorsers accounted for about a quarter of all companies recognized on the list.

     CEO Water Mandate endorsing companies who made the CDP “Water A List” for 2017.

In addition to a strong presence on the Water A List, there were also several Mandate endorsers highlighted in the report for their innovative approaches to addressing water risk. For example, Danone is investing $59 million in projects that help secure sustainable access to key crops in water-stressed regions, such as Sub-Saharan Africa and parts of China. These projects are promoting sustainable agriculture and empowering smallholder farmers. Colgate Palmolive and Diageo are both establishing an internal value on water, one that is holistically reflective of the environmental and social costs of water rather than just the price. Using a tool developed with the Rutgers University Business School, Colgate found that their “true cost” of water is 2.5 times more than the purchase price.