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April 12, 2010
CDP Water Disclosure Sends First-Ever Request for Information on Water Use to More Than 300 Companies
    by Robert Kropp

The initiative, which aims to inform investors of risks and opportunities relating to corporate water usage, has been signed by 137 financial institutions with a combined $16 trillion in assets.

According to a report published last November by McKinsey & Company, usage of global water resources is expected to increase to 40% more than "current accessible, reliable supply" by 2030. The increase will present an even more daunting challenge in areas of developing countries where one-third of the world's population lives. In those areas, the deficit is likely to be more than 50%.

According to the
Organization for Economic Co-operation and Development (OECD), 47% of the world's population will be living in areas of high water stress by 2030, if policies are not enacted to address the issue.

As the McKinsey report points out, "the gap between supply and demand will be closed." The question that remains is how. A business-as-usual approach will not suffice, as current efficiency improvements by the water sector will still leave a gap of at least 20%.

Also in November of 2009, the
Carbon Disclosure Project (CDP), whose annual information requests on corporate greenhouse gas (GHG) emissions were sent to over 3,700 of the world’s largest companies in 2009, launched its Water Disclosure initiative. The objective of CDP Water Disclosure is to provide data on corporate water usage in order to inform global markets on investment risks and opportunities.

Last week, CDP Water Disclosure sent out it first information request, to 302 companies listed in
Fortune magazine's Global 500. The companies were selected by CDP Water Disclosure because of their operations in water-intensive industry sectors, including chemicals, Fast Moving Consumer Goods (FMCGs), food and beverage, mining, paper and forest products, pharmaceuticals, power generation and semiconductor manufacturing.

As founding responders to CDP Water Disclosure, Ford and PepsiCo are among the companies that have already committed to report in 2010.

According to the CDP, 137 financial institutions with a combined $16 trillion in assets have signed the request for information, which asks companies to measure and report on water usage, the risks and opportunities in their operations and supply chains, and their water management plans.

US-based signatories include
California State Teachers' Retirement System (CalSTRS), Calvert, Ceres, Green Century Funds, Pax World, and Trillium Asset Management.

The deadline for responding to the information request is July 31. CDP Water Disclosure expects to issue a report on its findings in the fourth quarter of 2010.


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