Global 500


efficiency projects may result in higher water use (e.g. desalination provides additional water supply, but is also energy-intensive). Nestlé, for example, is aware of the increased water requirements of biofuels made from crops such as maize and wheat and therefore advocates against the use of these crops for fuel.


Leading practice strategies used by respondents to manage the linkages and trade-offs between water and energy include:


• Systems to track and reduce the environmental impacts and costs of new programs and products across the entire lifecycle,


• Evaluating the interdependence of various inputs and the opportunities for savings in multiple areas,


• Developing policies and programs which govern products and operations,


• Climate protection measures to counter water scarcity problems, and


• Engaging with key stakeholders (e.g. NGOs, suppliers, employees, and customers) to promote water and energy conservation and improve efficiency.


Johnson Controls has developed a combined heat and power plant in Baltimore, Maryland (US) that uses the remainders of treated wastewater as fuel and results in many benefits for the company and the local community. The plant will generate 2.4 megawatts of electricity annually, provide steam to offset process heating requirements, and produce hot water for boilers. The digester gas cogeneration facility at the site will also reduce emissions and the city’s energy bill by US$1.4 million each year while increasing energy security as gas is piped directly to its end use and provides a hedge against fluctuations in fuel and electricity prices.


Figure 8: Reported exposure to near-term risk in direct operations and supply chain by sector


80% 70% 60% 50% 40% 30% 20% 10% 0%


Consumer Staples


Consumer Discretionary


Industrials Information


Technology Health Care Energy Utilities Materials


0% 10% 20% 30% 40% 50% 60% 70% 80% Exposed to near term risks in direct operations


Irbaris LLP commentary David Hampton, Managing Partner


Having been involved with CDP Water Disclosure since its inception, we are pleased to see this year’s higher response rate which demonstrates the increasing recognition of water as an issue, as well as the importance of disclosure. The responses, however, show there is still much to be done to respond to the challenges and opportunities related to water.


The complex and location-specific nature of water issues for business can be an obstacle to addressing associated risks. Good risk assessment tools have been developed and much good work is being done to measure and communicate water risks. However, too many companies are caught up in the measurement process for their own sites rather than taking proactive steps to understand their exposure across their broader business system.


The lack of board-level engagement on water issues in many companies is also telling. Given the potential for water to have a critical impact on multiple aspects of a business, water needs to be managed at a strategic, corporate level. The recently published Ceres Aqua Gauge provides a tool to help investors assess, and companies develop, best practice in managing water risk across a business.


CDP has done an excellent job of catalysing awareness of the business importance of water issues with major companies and with investors and we wish CDP continuing success. Our hope is that the next few years of disclosure will see a rise in the number of companies taking proactive steps to manage the issues, rather than simply measuring the problem.


15


Exposed to near-term risk in the supply chain


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