Carbon Disclosure Project to pressure 300 major corporates on water reporting issues

The Carbon Disclosure Project (CDP), the huge $55 trillion investor backed initiative that monitors and encourages company disclosure on carbon dioxide emissions, is turning its sights to water reporting in a move that will move the topic up the corporate agenda. Starting next year, 300 of the world’s largest corporations in water intensive sectors will receive a questionnaire asking them to measure and disclose information on water such as the risks and opportunities in their own operations and supply chains, water management and possible improvement plans. Industry sectors being targeted include chemicals, fast moving consumer goods, food and beverage, mining, paper and forest products, pharmaceuticals, power generation and semiconductor manufacturing. Heavyweight investment managers including Norges Bank Investment Management, which runs Norway’s NOK2,385bn (€280bn) Government Pension Fund, Schroders, the UK fund manager, APG Asset Management – manager of the ABP pension fund, and Dexia Asset Management, are backing the CDP Water Disclosure programme, which should ensure that companies start responding. The United Nations has forecast that by 2030 almost half of the world population will live in areas facing water stress or water scarcity.CDP said prompting companies to report on water management would enable institutional investors to better understand the business risks and opportunities associated with issues such water scarcity. In a statement, Norges Bank Investment Management, said: “As water becomes an increasingly constrained resource, it also becomes an investment issue. It is vital that institutional investors have access to high quality information on how water-related risks threaten corporations, both directly and within their supply chains, in order to make better informed decisions and direct the flow of capital away from risks and towards solutions. CDP Water Disclosure will be essential to providing investors with this information.” CDP said the questionnaire results would be made available to endorsing investors and summarised in an annual report, the first of which will be produced in the last quarter of 2010. A report by CDP, titled: ‘The case for water disclosure’, written by Irbaris, the London-based climate advisory firm, has been published setting out the rationale for the new program and findings from data collected in a small pilot in 2008.
Link to report