New tool launched to help investors and businesses understand water scarcity issues
Elaine Brass
20th November 2009
The Carbon Disclosure Project (CDP), an independent not-for-profit organisation that encourages businesses and organisations to measure and report their carbon emissions, has launched a new tool to help investors and businesses evaluate companies’ ability to operate successfully in a world where water is becoming an increasingly scarce commodity.
The CDP Water Disclosure will make publicly available business information on water scarcity and other water-related issues and will aim to raise awareness within businesses about the risks and opportunities of the problem. The CDP said it was launching the programme because water issues already impact on companies’ operations and will, in time, become an increasingly important investment issue. Global financial institutions, such as Norges Bank Investment Management (NBIM), Schroders, APG Asset Management and Dexia Asset Management are already supporting the programme.
Paul Dickinson, chief executive officer of CDP, said: “Much of the impact of climate change will be felt through changing patterns of water availability, with shrinking glaciers and changing patterns of precipitation increasing the likelihood of drought and flood. If climate change is the shark, then water is its teeth and it is an issue on which businesses need far greater levels of awareness and understanding. CDP Water Disclosure will raise this awareness and drive companies to take action to mitigate risks and seize opportunities.”
The programme will give businesses a system to report their use of water and their exposure to changing patterns of water availability.
In a statement CDP said: “Companies face risks such as lack of water impacting agricultural and manufacturing processes and the threat of regulation increasing prices and limiting the volume of water available to them.”
Investors are getting behind the project because as water becomes an increasingly constrained resource, it also becomes an investment issue. NBIM, lead sponsor of CDP Water Disclosure, said it was vital that institutional investors had access to high quality information on how water-related risks threaten corporations, both directly and within their supply chains, in order to make better informed decisions and direct the flow of capital away from risks and towards solutions.
CDP gathers primary corporate climate change information from thousands
of businesses around the world so that it can be incorporated into
business and policy decision-making. CDP said it would use this same,
established method to tackle the water scarcity issue.
