This year has seen the largest response yet to CDP’s annual request for investment-relevant information on listed companies in sectors exposed to water risk. Of the 1,252 companies approached in 2016, 607 (48%) responded; up from 405 out of the 1,073 companies approached last year. Key findings include:
- Water risks are rapidly materializing for business: Disclosing companies reported US$14 billion in water-related impacts this year, a five-fold increase from last year. Over a quarter of companies have experienced detrimental impacts from water this year, and companies expect over half (54%) of the 4,416 water risks they identified to materialize within the next six years.
- Corporates are not moving fast enough: Year-on-year disclosures through CDP show that companies are not moving fast enough to address the sustainable management of water. Disclosure around key metrics, such as tracking water use, assessing risk, and ensuring strategic management shows that performance has not improved markedly since last year.
- A new international regime to cut carbon creates more demand and pressure to improve water management: The Paris deal is now international law, meaning the nearly 200 countries that submitted climate plans are now mandated to deliver emissions reductions. CDP’s data shows that this will necessitate better management of water: 24% of GHG emissions reduction activities reported by business depend on a stable supply of good quality water. Encouragingly, however, over half of companies (53%) report that better water management is delivering GHG reductions, showing that water can potentially make – or break – the low-carbon transition.
- A pivot towards water stewardship is underway: There is a bright spot emerging in the increasing numbers of companies recognizing the value of managing water in a more holistic sense. More companies are citing water stewardship as the basis for their water targets, and this year’s Water A List includes 17 more companies than last year.