Foodservice Footprint Premium-2-0509-Water-conservation Tide turning on water risk disclosures, says CDP Foodservice News and Information  news-email email-news

Tide turning on water risk disclosures, says CDP

Demand for data on water risks among investors has more than doubled in a year, according to CDP. 

Some 1,029 companies (up 122% from 2023) have been targeted by a $21 trillion-strong group of 276 global investors, banks and insurers, through the CDP’s non-disclosure campaign.

The campaign specifically engages a select group of companies that have not previously reported environmental data to financial institutions through CDP – the not-for-profit that runs the world’s only independent disclosure system.

Businesses are more than twice as likely to disclose through CDP when engaged directly this way, CDP said.

The 100+ financial institutions requesting water-related data in this year’s non-disclosure campaign (NDC) point to a growing awareness of the potential financial, social and reputational risks associated with water, and how these may leave portfolios exposed. Previous CDP research, for example, has estimated a minimum of $225 billion in corporate water-related risks.

On water, the manufacturing sector is most highly targeted, representing 28% of companies requested to disclose. This is followed by materials (13%) and retail (12%).

Food, drink and agriculture companies are among the most exposed to water-related risks. In March, CDP warned that too many businesses in the sector appear to be ignoring these. Of the 333 who firms who responded to CDP’s annual water survey, just 36% are reporting their supply chain risks in relation to water. Around one in five (18%) in this sector are not engaging with their suppliers, nor are they planning to do so in the next two years. In hospitality, just 13% are reporting their supply chain risks relating to water scarcity, with 32% assessing their supply chain impact. 

new CDP brief, ‘Navigating troubled waters: a briefing for directors of financial institutions’, has also been published. It outlines four important mechanisms that directors must take to address these risks, including fully embedding water considerations in strategy; assessing water risks and opportunities; leveraging their influence for sustainable water management; and pushing for comprehensive water-related data disclosure. 

There has been a significant increase in financial institutions leading the demand for greater transparency on water-related risks in their portfolios, said CDP director of capital markets Claire Elsdon. “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,” she explained. 

In addition to businesses engaged on water, CDP’s campaign also aims to improve data availability on climate and forests. Some 1,998 companies overall, collectively responsible for emissions equivalent to those of India, Brazil, Germany and the United Kingdom combined, are being asked to disclose information. Together with the 1,029 targeted on water, 1,329 companies are being targeted on climate (a 17% increase from 2023) and 373 on forests (a 10% decrease from 2023).

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