Carbon Disclosure Project 2011
Water-related risks and opportunities in direct operations and the supply chain
Exposure to risks and opportunities
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
14% 36% 41% 7% 37% 41% 38% 18% 8% 29%
Responding to risk
• 86% of Consumer Discretionary respondents are able to identify whether they are exposed to risks in direct operations (compared to 93% in the Global 500), and only 68% of respondents can identify which operations are located in regions at risk. This suggests that management of water-related risks in direct operations is a lower priority in this sector.
23% 55% 50% 41% 36% 27% 35% 63%
• The percentage of Consumer Discretionary respondents that report exposure to risk in the supply chain (36%) is greater than in the Global 500 (27%), but steps to manage these risks are also greater; 41% of the sector requires their suppliers to report water-related information, compared to only 26% of the Global 500.
• Frequently reported risks include water stress or scarcity, declining water quality, and reputational damage. Hyundai Mobis reports potential reductions in productivity due to water scarcity; Carnival reports that negative press concerning spills could impact the company’s brand.
Seizing opportunity
Consumer Disc.
Global 500
Risk in direct operations
Yes
Consumer Disc.
Global 500
Risk in supply chain No Don’t know
“99.9% of [water consumption from Puma operations and across our global supply chain] was from our supply chain, of which 89% was consumed in either Tier 3 or 4. This information will be used to highlight the importance of action deeper down the supply chain.” Puma
Consumer Disc.
Global 500
Opportunities
• A lower percentage of Consumer Discretionary respondents report water-related opportunities (41%) compared to the Global 500 (63%).
• In addition to improving brand value through proactive water stewardship, some respondents are leveraging products with water-related benefits, such as treatment technologies and other technologies to conserve water. Phillips Electronics identifies the production of UV lamps for water purification processes as a business opportunity.
• Respondents also report implementing more efficient technologies in direct operations to reduce both water use and cost.
Ford Motor: limiting impact in a water-stressed region
For the past few years the Mexican state of Chihuahua has suffered droughts caused by below average rainfall and as a result, the Rio Grande River that supplies the region is unable to support increasing development and a growing population. As water resources became stressed at the Ford Motor Chihuahua Engine Plant (CHEP) in Chihuahua City, the company investigated ways to reduce water use and limit impact to the surrounding community. Six years ago, Ford Motor began making changes in its manufacturing process at CHEP; today, the plant uses no potable water except for human consumption. Given that the industrial park where CHEP is located draws from the same groundwater resources as the local community, Ford Motor has made several changes that rely on recycled and other treated gray water to meet the needs of the plant while preserving freshwater reserves. These initiatives combine to save more than 32,000 cubic meters of water a year, and include using treated gray water from the city for compressor cooling, rethinking water-intensive manufacturing processes, and using advanced treatment and filtration techniques. In the future, Ford Motor plans to continue to assess opportunities to use advanced water conservation technologies across its operations, particularly in other water-stressed regions.
27
Percentage of respondents
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