COP26: String of water companies join Race to Zero, 700 corporates asked to disclose water risks to investors
Several big announcements on water resilience and efficiency are being made at COP26 today (5 November) by nations, businesses and platforms including CDP and the High-Level Climate Champions. Here, we round up the headlines.
As well as being the ‘Youth and Public Empowerment Day’ on the COP26 presidency programme, today’s schedule has many events and announcements dedicated to oceans and water.
On the latter, the UK Government is expected to shortly launch a coalition of nations and non-state actors, including cities, regions and states, called the ‘Reducing Water Footprint Coalition’. They will make commitments on accelerating research in how water consumption can be reduced, and other actions taken across the water system to champion replenishment and resilience.
A ‘Resilient Water Accelerator’ will also be announced, with an aim to improve water security in 30 of the world’s most affected locations by 2030.
For the private sector, CDP has confirmed that it has developed the first water risk reporting framework for financial institutions, with the framework due to be issued to 700 of the world’s largest publicly listed firms next spring.
CDP collected water-related data from 2,934 businesses in 2020, representing 67% of all listed companies globally. But levels of disclosure remained mixed, hampering the financial sector’s ability to draw meaningful comparisons. Private investors managing $110trn of assets collectively support CDP’s water security questionnaire, with the organisation also stating that 66 central banks are now measuring water risks from corporates. However, 70% of financial institutions engaged with CDP either did not respond or indicated that they do not assess water risks for any of their portfolios, with a lack of data access being a key barrier.
Companies across the food, beverage, chemicals, fashion, mining, energy and oil and gas sectors are responsible for or have influence over 70% of the world’s water use, CDP has emphasised.
CDP said in a statement: “Work is underway now to expand the reporting and accountability framework to cover water security in greater depth, from 2022 onwards. By integrating the work into CDP’s existing framework and issuing this to the same financial institutions engaged in 2020, we are confident that it will have the largest possible impact on financial institution disclosure.
“But it won’t stop there. With recent evidence from the French Central Bank demonstrating that financial institutions subject to new disclosure requirements reduced their financing of fossil energy companies by 40%, when compared to investors not subject to the same law, we are confident that increasing water-related disclosure amongst financial institutions will ultimately result in systemic change that contributes to reversing the global water crisis.”
The race is on in the water sector
In related news, the Race to Zero campaign has announced that more than 20% of the world’s water companies by revenue are now signed up. The campaign requires signatories to halve emissions by 2030 and reach net-zero by 2050 at the latest, convening companies from all sectors as well as cities, regions and other organisations.
Water UK, the trade body representing all major companies in the sector, joined the Race to Zero in January. The UK’s water sector has already published a joint roadmap for reaching net-zero by 2030, featuring commitments on reducing methane releases, improving energy efficiency, increasing self-generated renewables use from solar and anaerobic digestion, procuring renewables electricity, providing biogas to the grid, moving to electric for construction equipment like diggers and rolling out electric and alternative fuel vehicles for fleets.
This approach has since gone global, which is welcome, considering that the global water sector accounts for 4% of power consumption – more than Australia.
Separately to Race to Zero, the world’s 50 largest water utilities have launched a new ’50 to 1 billion’ campaign, which aims to build resilient water supplies and wastewater services for more than 1.2 billion people by the end of the decade. The UN estimates that 29% of the global population cannot access safely managed drinking water services, while 55% cannot access safely managed wastewater and sanitation services.
This is a developing story and edie will add more information as we receive it.
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