Water Stress Hurting More Than 50% of Global Companies, CDP Says

Water stress affects more than half of the world’s largest listed companies, according to the Carbon Disclosure Project, which urged businesses to set targets and increase board oversight to manage a shrinking resource.

In a 185-company survey, 53 percent suffered from water scarcity, flooding, rising compliance costs, regulatory uncertainty or poor water quality in the past five years, up from 38 percent last year, the CDP said today in a report.

The survey coincides with the start of a two-day Bloomberg New Energy Finance water forum in San Diego, aimed at policy makers and energy-industry executives as water’s role in resources planning expands. Companies face pressure to devise water-management strategies as global usage climbs and droughts from Russia to the U.S. strain supply of a finite resource.

Only 44 percent of the energy companies contacted responded to the CDP survey, making the industry the least transparent for a second year, according to the report. Health care retained its lead as the most responsive, with a 77 percent response rate.

The report is based on information submitted to the CDP by 185 of the Global 500, the largest companies by market value in the FTSE Global Equity Index Series. 

Of the 185 respondents, 68 percent said they viewed water as a “substantial risk” to their business, compared with 59 percent a year earlier. Companies with board-level oversight of water policies increased by 1 percentage point to 58 percent.

“While it is encouraging that their awareness of the commercial risks and opportunities associated with water is improving, progress in responding to them is varied and in many cases insufficient,” CDP Chief Executive Officer Paul Simpson wrote in the report. “We need to see greater corporate accountability through more transparency, concrete targets and goals, and board level oversight of water-related issues.”

The CDP is a London-based, nonprofit organization that collects and publishes information on carbon emissions and water use from some of the world’s largest companies.

To contact the reporter on this story: Matthew Brown in London at mbrown42@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net