The CDP’s 2014 Global Water Report reveals that 68% of businesses have exposure to water risk, with 22% saying that their water risks will limit business growth. The data for the report came from 174 Global 500 companies in sectors with higher water risks and impacts. These companies were among the 1,064 companies that provided information on their water management practices to the CDP in 2014, double the number of 2013 reporting companies.
One disturbing factor revealed by the report is the somewhat limited nature of the reporting. Only 38% are reporting water use in both direct operations and at the supply chain level. Only 28% trace use back to the water basin level. A full 68% did not request information on water use from key suppliers. This means that there is potential for greater risk.
Progress was noted in better at management of water risks, elevating water management to higher levels of corporate oversight, and best practices around water stewardship. More companies are setting targets to reduce water use and identifying opportunities that arise from sophisticated risk analysis and water management.
Disclosure levels are still lacking in the Global 500 companies as a whole. The CDP report is convincing evidence that the business world needs to take water issues seriously. Water risks have both an environmental and an economic impact. As our most precious natural resource, more companies need to connect the dots and make water security a paramount concern.