Investors worth $110+ trillion urging thirsty companies to report on water security this year
- US$301 billion of business value is at risk unless companies improve and innovate around water use, while the cost of response estimated at US$55 billion.
- From waterloop factories (LOréal) to no-rinse shampoos (Unilever), to eliminating hazardous chemicals (PVH) companies are innovating with products and processes that dramatically reduce water use and pollution.
- Water savings and water reuse mean nearly 2 in 3 companies are reducing or maintaining water withdrawals.
- Yet progress remains stagnant on pollution, with just 4.4% of companies making progress against pollution reduction targets.
- 20% surge in companies disclosing water data in 2020.
The cost of water risks to business could be over five times greater than the cost of taking action now to address those risks, according to a new report by CDP, a non-profit that runs the worlds environmental disclosure platform.
The report, A Wave of Change, finds that the companies disclosing through CDPs water security questionnaire in 2020 risk losing up to a combined US$301 billion in business value if they do not address water risks, and estimate the total cost of addressing these risks at US$55 billion less than one fifth of the amount.
Cate Lamb, Global Director of Water Security at CDP, commented: Water shortages are affecting more than 3 billion people worldwide, with the amount of freshwater available per person having plunged by a fifth over two decades1. The water crisis must be approached with the same urgency and innovation as the COVID-19 crisis and the business case for action is clearer than ever.
Some of the worlds thirstiest companies are already innovating by reusing water in creative ways, developing water-smart products, and remodelling their strategies to adapt to the water crisis. We can turn this situation around, but we need much more transformative action. As investors pay closer attention to companies management of water risks, CDP is calling for all companies to develop ambitious targets to reduce water withdrawals and eliminate water pollution, including net-zero water targets. Companies must take bold action now to transform their business models.
In the last year, companies have made progress on water use, with nearly two thirds of companies reducing or maintaining water withdrawals, thanks to the implementation of measures to reuse and save water.
However, it is not just the volume of water available that matters. The cleanliness of that water is vital too. The analysis finds overall business action on water pollution is severely lacking, with just 4.4% of companies making progress against pollution reduction targets.
While more action is needed, some pioneering companies are integrating water stewardship into their business strategy and taking bold action to address water risks.