Companies not satisfying thirst for water reporting

London, 18 February:
One hundred water-dependent firms have been chastised by investors for weak disclosure of their exposure to water risks.
The best score in a survey by investor coalition Ceres of global listed companies in water-intensive sectors such as chemicals, electric power and mining was earned by UK drinks firm Diageo – but it managed to garner only 43 out of a possible 100 points.
Eighty of the companies scored less than 30 points.
Ceres’ president Mindy Lubber said: “Most companies provide basic disclosure on overall water use and water scarcity concerns, but their focus and attention so far is not nearly at the level needed given the enormity of this growing global challenge.”
No companies disclosed “comprehensive” data on water use and reporting of water risks in their supply chains was particularly poor, Ceres found, although Danone, SABMiller and Unilever did provide estimates of the water use embedded in their supply chains. “For example, Danone reports the water footprint for its milk and water divisions at each stage of the product lifecycle, including raw material production, processing, packaging and logistics,” Ceres said.
The report chided companies for using “vague, boilerplate language” about water risks in their annual reports or financial filings. “They fail to reference specific at-risk operations or supply chains and lack any attempt to quantify or monetise risk,” it said.
Likewise, Ceres, which published the report with US financial services firm UBS and data provider Bloomberg, found some companies disclosing risks in their sustainability report, but leaving the information out of financial reports, “a finding that indicates an ongoing lack of integration between voluntary reports and regulated financial filings”.
Only 21 of the companies disclosed a quantified goal to reduce their water use, the report found, while only three – Diageo, chemicals firm DuPont and Swiss mining company Xstrata – set reduction targets differentiated by the level of water stress at specific facilities.
Just 14 provided data on water use broken down to regional or site-specific levels. Ceres said: “Because water risk is geographically dependent, this absence of context makes it nearly impossible for investors and analysts to assess corporate exposure to water scarcity, or to understand if corporate actions to mitigate risk are either appropriate or effective.”
“This report makes clear that companies are not providing investors with the kind of information they need to understand the risks and opportunities posed by water scarcity,” said Jack Ehnes, CEO of the California State Teachers Retirement System, the second largest public pension fund in the US with $134 billion under management.