World’s best-performing companies on water security revealed

Ford, Colgate Palmolive and Toyota have been named as some of the best-performing companies on water security in the first global ranking of corporate water stewardship from CDP.

The non-profit organization’s annual water report saw disclosure requests sent to 1,073 of the world’s largest publicly listed companies in sectors with high water vulnerability.

More than 400 firms responded to the request, double the number of companies analyzed in 2014.

Eight companies made up the inaugural CDP Water A List, including  Asahi, Colgate Palmolive, Ford, Harmony Gold Mining, Kumba Iron Ore, Metsä Board, Rohm and Toyota.

According to CDP,  these companies are taking action to mitigate corporate water risk and realizing opportunities in ways that also improves water security for the environment and other water users.

Mind the gap

However, the information reported to CDP also revealed a greater disparity between these leaders and the majority of respondents.

Despite ongoing water crises such as droughts in California and parts of Brazil, more than half (53%) of companies are failing to conduct a comprehensive risk assessment – a basic first step for any company seeking to ensure business resilience against water issues.

Cate Lamb, head of water at CDP, said: “Just as oil was to the 20th century, water is fast becoming the defining resource of the 21st century.  Unfortunately however, unlike oil, there is no replacement for water.

“Companies using CDP’s water program are beginning to understand that taking a strategic view of how they manage water can enhance competitive advantage, investor appeal and business resilience.

“CDP’s Water A List in particular understand that taking a more prudent approach to managing water will ultimately be of benefit to their business and wider stakeholders. It’s now time to close the gap.”

Sector issues

Oil and gas was one of the worst performing sectors, with less than a quarter (22%) of the world’s largest publicly-listed energy companies responding to the information request. 

CDP described the lack of transparency as “concerning”,  given that more than two-thirds of oil and gas companies disclosing to investors via CDP say their business is vulnerable to substantive water risks.  

Furthermore, the bottom line has already been hit for almost 43% of these companies due to water-related challenges in the past year – among the highest of the eight sectors featured in CDP’s report.

The World Economic Forum recently ranked global water crises – including drought, increased risk of flooding and deteriorating water quality – as the greatest threat facing the planet over the next decade.

CDP’s global water forum 2015

Brad Allen

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