EIRIS cites several more
such examples of water scarcity impacting business operations already, but clearly the worst by far
is yet to come. As the CDP Water
Disclosure project states, "Demand for water is projected to outstrip supply by a staggering 40
percent by 2030, and an estimated half the world's population are likely to live in areas of high
water stress by the same year."
According to EIRIS, the conditions described by CDP Water
Disclosure have "the potential to put USD 63 trillion of global GDP at risk by 2050."
companies in water-intensive industry sectors effectively addressing the issues presented by water
scarcity? In its analysis of the global 2000 companies, EIRIS found that 54% of them are exposed to
water risks. Of those companies, "36% of companies have acknowledged water as an issue to be
addressed; 22% demonstrate they monitor water consumption in relation to disclosure; 9.7% have set
either short-term or long-term consumption targets and 9.7% have set water quality targets,"
according to EIRIS.
However, when EIRIS applies its methodology—focusing on the areas of
governance, strategy, disclosure, and performance—to the actions of those companies in response to
water scarcity issues, the firm found that "the majority of companies demonstrate limited or no
evidence of taking action to mitigate water risks." A mere 0.22% of companies were found by EIRIS
to have a good management response to water risk, and none had an advanced response.
those industry sectors most impacted by water scarcity, EIRIS found that companies in Forestry &
Paper had the highest intermediate response, of 16.6%, followed by those in Mining & Metals and
Food & Beverage. Companies in the Oil & Gas and Power Generation sectors had the lowest
intermediate response. Chemicals & Pharmaceuticals had the highest good response, of 1.9%.
In its first annual report
on corporate water usage, CDP Water Disclosure found similar involvement across industry sectors.
Responses from the Chemicals and Pharmaceuticals sectors were high (100% and 81%, respectively),
while responses from the Oil & Gas sector was only 29%. The Utilities sectors had only a 39%
What should investors be doing? According to EIRIS, investors should demand
improved corporate reporting, encourage greater awareness of risks and opportunities, and expect
companies to consider water scarcity issues on a par with climate change.
already begun engaging with companies on the issue of water. According to the Interfaith Center on Corporate Responsibility (ICCR), four
shareowner resolutions filed this year requested comprehensive corporate policies on the human
right to water. As You Sow identified six
proposals addressing water usage by utilities and coal companies, as well as in corporate supply