Water is still not getting enough attention at board level within companies, according to the investor-backed Carbon Disclosure Project’s new Global Water Report.
The report was produced on behalf of 470 investors representing $50trn in assets and is based on information submitted by 185 Global 500 companies.
The new document shows that despite a 33% increase in the number of investors requesting water information from their investee companies, the percentage of companies responding has “stagnated”.
The CDP says there has been a very minimal increase in the percentage of companies reporting board level oversight of water.
And although there has been some improvement in corporate awareness of the material issues associated with water, a third of companies are unable to identify whether or not water poses a risk to their supply chain.
It was of “particular concern” that a lot of companies are still unaware of their water supply chain and haven’t developed plans to manage them, said Jan Thomsen, Chief Risk Officer at report sponsor Norges Bank Investment Management (NBIM), the manager of theNOK3.7trn (€499bn) Norwegian Government Pension Fund.
The report, prepared for the CDP by consulting firm Deloitte, shows that 53% of the companies which responded (2011: 38%) experienced negative impacts from water-related challenges including water scarcity, flooding, rising compliance costs, regulatory uncertainty and poor water quality in the past five years.
Sixty-eight percent of them now see water as a substantial risk to their business.
“While it is encouraging that their awareness of the commercial risks and opportunities associated with water is improving, progress in responding to them is varied and in many cases insufficient,” says CDP Chief Executive Paul Simpson.
“We need to see greater corporate accountability through more transparency, concrete targets and goals and board level oversight of water-related issues.”
The CDP says 74% of respondents are taking some form of collective action to develop collaborative solutions to address water-related problems.