Fewer than one in two drinks companies are engaging with their supply chains on water-related issues (43%) or providing c-suite incentives for water action (37%).
Data shared by CDP from across the 123 beverage businesses reporting through the platform in 2023, showed that 71 (58%) were reporting on water policies, with 41 exposed to water risk totalling $9bn (£11.7bn). Most of the risk relates to reduction or disruption in production capacity.
This isn’t the first time food and drink companies have been criticised for their lack of attention to water. Wrap, which runs the UK water roadmap, has previously expressed the urgent need for more businesses to sign up to address water risk and take steps towards sustainable water management in their supply chain.
There has been a significant increase in financial institutions leading the demand for greater transparency on water-related risks in their portfolios. Research earlier this year by CDP showed demand for data on water risks among investors has more than doubled in a year.
“Now we need to see companies responding by reporting this information and working in partnership with the finance community to measure and manage these risks,” said CDP director of capital markets Claire Elsdon.
Chris Hilson, professor of law and climate change at the University of Reading, UK, said water is “key to corporate ESG reporting”. The university’s forthcoming report – Regulatory tools for healthy and sustainable diets – for example states: “While corporate water risk assessments, reduction targets and water use sustainability reporting are key tools for addressing the problem, these need to include supply chains and not just [companies’] own operations.”
A new Footprint Intelligence report, in association with Coca-Cola Europacific Partners: ‘Water stewardship and regeneration in the drinks industry; where next?’ will be published on November 29th. You can register for the online launch here.
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