The availability of water poses a strategic risk to a large and growing number of companies. Competition for scarce water resources is leading to business disruption, brand damage and the loss of the license to operate. A lack of water, or insufficient water of the right quality, can cut or even halt production. An inability to access water can constrain corporate growth.
Water insecurity is already presenting parts of the corporate world with serious challenges. Growing demand for water, driven by urbanization, industrialization and economic growth, coupled with impacts on supply caused by climate change, will only compound these challenges.
CDP’s water program is designed to guide corporations through these challenges while helping investors and companies with large supply chains better understand how their portfolio companies and suppliers are addressing their water impacts. It is used by investors collectively managing more than US$60 trillion and by multinational companies with a combined procurement spend of US$126 billion.
This year, more than 2,200 companies were asked to disclose information relating to water, double the number in 2013. Responses were received from 1,064, – up 79% compared with 2013, generating an unrivalled database of self-reported corporate water risk and the mitigating actions being taken.
CDP acknowledges the hard work and dedication of many of the world’s corporations in measuring and reporting these important data, particularly those that have consistently disclosed through CDP since the water program began in 2010.
This report presents the analysis of responses from companies in the Global 500 index (which comprises the largest 500 companies in the FTSE Global Equity Index Series), which are in sectors2 determined to have high vulnerability to the challenges posed by water insecurity. Of these 302 companies, 174 responded to their investor requests in 2014.