Global 500


respondents, flooding (24%, 45), reputational damage (23%, 43), and regulation of discharges leading to higher compliance costs (21%, 40). Similar trends are seen in the supply chain.


Water-related risk is especially apparent when considering that 38% (73) of responding companies have experienced water-related business impacts within the last five years.2


As shown in Figure


4, a relatively high percentage of respondents experienced these impacts in the Materials (68%, 23), Utilities (53%, 8) and Energy (48%, 12) sectors. Disruption to operations from severe weather events (e.g. flooding) and water shortages are most frequently reported by respondents. The Southern Company reported US$200 million in costs associated with electricity required to compensate for reduced hydroelectricity production during drought. According to The Southern Company, the company has strengthened its resilience to drought through a diverse energy portfolio, storage ponds at key facilities and by working closely with government agencies to plan contingencies for drought conditions. A US$2 million loss due to production curtailment from seasonal drought was reported by Kimberly-Clark at one of its facilities in Malaysia, where it has now installed effluent recycling and other technologies to ensure more secure water supplies in the future.


Figure 2: Types of water-related risk reported in direct operations and supply chain1


45% 40% 35% 30% 25% 20% 15% 10% 5% 0%


41%


24% 23% 18% 21%


8% 6% 4% Water scarcity Flooding Direct operations


Reputational damage


Supply chain


Figure 3: Water-related risk and opportunity: reported exposure and time frame


Exposure


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


7% 37% 38% 8% 29% 21% 35% 55% 63% 64%


15% 66%


14% Time frame 19%


10% 11% 79%


27%


100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%


Risk in direct


operations


Risk in supply chain


Opportunities


Risk in direct


operations


Yes No Don’t know


Risk in supply chain


Opportunities Higher complience costs


Near-term (0-5 yrs) Long-term (>5 yrs) Unknown


1 Risks reported are the top four risks identified by companies in both direct operations and the supply chain. 2 Some responses to this question were unclear. To calculate the number of companies experiencing detrimental impacts, individual responses were judged independently of company “yes” and “no” answers. See Appendix II for a description of the full report methodology.


9


Percentage of reported risks or opportunities


Percentage of respondents


Percentage of respondents


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