Investment in water security at record high

27th November 2017

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The world’s largest companies have committed a record $23.4bn (£17.8bn) to improving water security this year, according to a new report from CDP.

This includes investment in desalination plants, reclaiming wastewater, and improving irrigation systems, with 70% now discussing water issues at the boardroom level.

In addition, around 7% have established an internal value on water that takes account of the social and environmental costs often absent from pricing and decision-making.

“From brand damage to disrupted supply chains, water security is now big business and poses increasingly significant threats and opportunities to global firms,” CDP CEO, Paul Simpson, said.

The research involved analysing water data from 742 companies, including Nestle, Burberry and Kellogg’s, finding a 40% increase in water management and performance disclosure since last year.

However, 54% of those studied failed to disclose water risk and opportunity data to their investors and customers, with the energy sector continuing to be the biggest laggard.

The number of companies featuring in CDP’s ‘Water A List’ for pursuing the highest levels of water stewardship increased from 25 in 2016 to 73 this year, with the US, Japan and the UK most represented.

Some of the companies placing an internal price on water include Colgate and Diageo, with the former estimating that hidden costs such as pre-treatment and pumping mean the ‘true’ price of water is 2.5 times the purchase cost.

“From Bangladesh to Peru and the US, climate risks - and in particular water risks - have been very real in 2017,” said Renat Heuberger, CEO at the South Pole Group, which helps assess firms’ water scores for CDP.

“From storms to droughts, and floods to forest fires, the damage has been enormous. It is, therefore, encouraging to see a growing number of water leaders coming to the fore.”

According to the G20, global water investment of $6.4trn is required from the public and private sector to meet UN Sustainable Development Goal targets by 2030.

Image credit: istock


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