www.cdp.net | @CDP
Global action on corporate water stewardship Roundtable on Integrated Approach towards Water Use Efficiency in India April 09, 2013
Damandeep Singh Director, CDP India damandeep.singh@cdp.net
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CDP Process
Signatory Signatory Investors Investors and and Supply Supply Chain Chain Members Members Authority
Information
Authority
Information
Corporations and Suppliers
Page heading positions here
530 Institutional Signatory Investors
$57 trillion
Assets represented by these signatory investors
629 Number of companies asked to respond to CDP’s water program in 2013
Why is Water a Business Issue?
“Water security is one of the most tangible and fastest-growing social, political and economic challenges faced today.” World Economic Forum, 2012 •March ‘13 saw attacks on Mumbai company over water •Demands on IPL •Climate Change even more complex
WEF Global Risks Landscape 2013
Water supply crisis
Impact
Major systemic financial failure
Mineral resource supply vulnerability
Likelihood
Source: World Economic Forum
Material Impacts
“Water shortages have in the past occurred at more than half our locations.� Allergan
Material Impacts
“Our suppliers must remain competitive by demonstrating responsibility towards conserving water resources and minimizing their operational impacts on water quality ‌Suppliers will be driven to implement new practices to reduce water in their operations in order to remain competitive among other suppliers.â€? Lockheed Martin
Investor Interest
Why is Water an Issue Now?
• 53% of companies have already suffered detrimental impacts from water • Sharp rise from 38% in 2011
Cisco worked with its suppliers to reduce water use in processes for Cisco products which led to financial savings to Cisco of over US$1million pa with no adverse impacts on product quality
• Reported financial costs as high as $US300 million • 68% report exposure to substantive water-related risks • 62% of risks reported to have potential to impact within 5 years
Exelon announced the retirement of its Oyster Creek, New Jersey nuclear plant 10 years early due to the potential $800 million upgrade cost of meeting more stringent water permitting conditions
Why is Water an Issue Now?
Cisco worked with its
Water represents a strategic opportunity to improve financial and brand performance
suppliers to reduce water use in processes for Cisco products which led to financial savings to Cisco of over US$1million pa with no adverse impacts on product qualit
Unilever Comfort One Rinse water efficient product now used in 12.5mln households worldwide A 60% increase on 2010!
79% of 832 reported risks relate to direct operations Water stress or scarcity
Flooding Rising discharge compliance costs
Regulatory uncertainty
Declining water quality Tightening withdrawal limits
Water presents a strategic opportunity
71% of companies report that water presents substantial opportunities for their business (up from 63% in 2011)
319 opportunities were reported, 79% of which of which are expected to materialise within 5 years. Sales potential for some of more than €800 million by 2020 Industrials (89%) and Materials (87%) sectors have largest proportion of respondents reporting opportunities
Unilever Comfort One Rinse is now used in 12.5 million households worldwide, a 60% increase on 2010.
Water not receiving necessary strategic attention
Collective responses to water challenges 74% of respondents report taking some “This is a complex issue, and acting alone is not enough.” form of collective action to address water-related issues: SABMiller • • • •
Community engagement (56%) Supply chain & watershed management (43%) Collective action (38%) Public policy (24%)
“Our goal is to be a ‘responsible water steward’ and this entails Benefits include reduced risk through improved business continuity, license to actively engaging with communities close to operations operate and increased brand value to ensure mutually beneficial Collective action provides companies outcomes.” with opportunities to gain fresh ideas, increase momentum for change and pool Anglo American Platinum resources
In Summary The strategic importance of waterrelated issues is immediate and continues to grow Water stewardship strategy – a framework for addressing water-related risks and identifying opportunities Collective action is emerging as an effective means for companies to address water-related challenges and capitalize on opportunities Clear best practices are emerging and being adopted within and across sectors Review full report at www.cdp.net
Water in CDP Supply Chain 2013
• CDP’s Standardized Questionnaire makes it easy to get started • Online access for up to 100 suppliers • Weekly updates for you on supplier progress • Web-based training for suppliers and procurers • Complete database of responses plus trend analysis to inform your next steps Already signed:
Questionnaire Sent to 629 Companies
Global 500 S&P 500
Targeted industry sectors include: • apparel • chemicals • food & beverage • metals & mining • oil & gas • pharmaceuticals • power generation • semiconductors
JSE 100
Companies outside these sectors and regions are welcome to respond voluntarily; to register email respond@cdproject.net.
ASX 100
2013 Water Questionnaire
QUALITATIVE
QUANTITATIVE
Benefits of Responding
Improve performance Lay groundwork for internal goals and benchmarks and enhance existing water management efforts
Benchmark peers Compare your performance to industry peers and Global 500 companies
Inform investors Provide relevant information to investors and demonstrate your company’s ability to operate in a waterconstrained world
Shape program Participate in the development of the program and the drive towards relevant metrics / methodologies for corporate water reporting
Recent Developments
Within CDP • Plans to continue expanding number of target companies in Europe and Asia • Scoring planned for 2014 Outside CDP • Better data sets & tools (e.g. WRI’s Aqueduct Global Water Risk Tool, Water Footprint Network) • Can help with identifying river basin locations for facilities • Greater comparability (e.g. UN CEO Water Mandate “Water Disclosure Guidelines”) • Contact Peter Schulte if you wish to comment pschulte@pacinst.org
Frequently Asked Questions
Q: Water is so cheap, I don’t see what the financial risk is to my company? Q: What if I don’t use much water in my operations? Q: What if I don’t have data on my supply chain? Q: I have limited resources, how do I make the business case internally that this is a priority?
Mission
1. Should we respond, even if we can’t answer all of the questions? • Yes. There is no expectation that companies will be able to answer all questions • Investors value incomplete responses over none • There will be no scoring or ranking of responses until 2014 at the earliest 2. Is it okay to say there is no risk or opportunity? • Yes, but it is particularly important to explain why not 3. What will CDP do with the data? • Public responses available to all on CDP website/non-public available only to signatory investors and customers • Summary findings/best practice in annual report to be released in October 2013 4. What is the deadline for responding? • The official deadline is 27 June • There is limited scope for extensions; please agree these with CDP or risk exclusion from report Contact respond@cdp.net
CDP is not just about disclosure
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Our water questionnaire
Asks a range of questions around the themes of: Governance Strategy Risk management Verification Watershed management/engagement
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Our questionnaire: A journey
ď ť Does your company have a water policy, strategy or
management plan? ď ť Is your company exposed to water-related risks
(current or future) that have the potential to generate substantive change in your business operation, revenue or expenditure? ď ť Has your company identified any linkages or trade-
offs between water and carbon emissions in its operations or supply chain?
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Already seeing improvements in maturity
2011 to 2012 ď ť20% increase in proportion of respondents reporting exposure to
water-related risks with potential to have substantive business impacts ď ť50% increase in proportion of respondents engaging on water
across their supply chain ď ť18% increase in proportion of respondents able to identify
linkages or trade-offs between water and carbon emissions in their operations or supply chain
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Scoring
Facing an increasing corporate and investor demand
for scoring responses to: Provide insights into the characteristics and common
trends among leading companies on water stewardship Highlight good practice, leaders and laggards Provide objective feedback to each responder Provide a useful filter for investors Catalyse changes in corporate behaviour
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Challenges
Developing a scoring methodology that: Enables benchmarking across all sectors and
geographies Scalable Simple and cost-effective to implement Reflects the nuances and complexities of responses
to water challenges Challenges leaders while encouraging laggards and
new responders
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Alignment with other initiatives
Alliance for Water Stewardship CEO Water Mandate CERES European Water Stewardship GEMI GRI WBCSD WFN WRI WWF
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Turner Foundation CDP & CERES awarded funds to work together to align CDP’s water scoring methodology with CERES Aqua Gauge
Scoring development timeline
Activity
Date
Water working group consultation
May and July 2013
2014 Questionnaire public consultation
Sep 2013
Publication of methodology
Feb 2014
2014 Disclosure period
Feb – July 2014
Scoring pilot (1 sample only)
Oct 2014
Methodology refinement
Nov ‘14 – Mar 2015
Scoring full implementation (all samples)
Oct 2015
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Invitation to participate We don’t have all of the answers. We are operating a transparent and collaborative development process and we want to hear your thoughts Damandeep Singh Director, CDP India damandeep.singh@cdp.net & water@cdp.net
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www.cdp.net | @CDP
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