Companies urged to be open about water use

The Carbon Disclosure Project (CDP) has already established itself as the leading voluntary scheme through which companies can report their emissions.

Now, for the first time, it is also appealing to more than 300 of the world’s biggest companies to hand over information about water use and other water-related issues.

Paul Simpson, chief operating officer at CDP said: “CDP has long been a key system through which investors and businesses can evaluate companies’ ability to tackle climate change.

“Much of the impact of climate change will be felt through water and as we face increasingly scarce water resources, we can now provide the same system to highlight companies’ ability to operate in a water-constrained world.”

The CDP is a not-for-profit organisation, but it has the backing of financial institutions with combined assets of over $16 trillion, giving it some real clout in the corporate community.

This latest questionnaire asks companies to measure and disclose information on their water usage, the risks and opportunities in their own operations and supply chains, and any plans to improve the way water use is managed.

The results will be made available to the investors that have requested disclosure and summarised in an annual report, the first of which will be produced in the last quarter of 2010.

According to a recent McKinsey report Charting our Water Future, competing demands for scarce water resources may lead to an estimated 40% supply shortage by 2030.

Water scarcity is an increasing business risk, with companies facing rising costs and potential supply disruption, such as to their agricultural and manufacturing processes, yet it is an issue on which companies and investors need far greater information, awareness and understanding.

David Gibbs