Environmental disclosure platform CDP has released the first-of-its-kind tool, Water Watch: CDP’s Water Impact Index which reveals the world’s most polluting and water-intensive industries.
According to CDP, the apparel and textile manufacturing sector, financial services, and fossil fuel sectors are having a critical impact on global water resources.
The latest report from the UN Intergovernmental Panel on Climate Change highlights the impacts of a changing climate on water resources globally. Extreme weather events such as drought, with its accompanying wildfires, and flooding will increase in severity as climate breakdown takes hold – with every 1 degree of warming extreme rainfall intensifies by 7%. Managing global water resources, ecosystems, institutions and infrastructure is vital to enable people to thrive in a changing climate.
Water Watch: CDP’s Water Impact Index measures the potential impact on water quality and quantity of over 200 industrial activities. The tool can be used by investors and financial institutions to assess the potential impact of their portfolios on water resources and water security. It can also be used by companies to assess the potential water impact of different parts of their business and value chains.
Grounded in independent and trusted academic, scientific and industry-recognized sources, the tool assesses the water impact of each industrial activity at different stages of the value chain.
The apparel and textile manufacturing sector, cotton farming, livestock farming, oil and gas extraction and mining are amongst the sectors found to have the largest potential impact on water resources.
Finance too, emerges as a sector having a critical impact on the world’s rivers, lakes, aquifers and streams. CDP says the flow of money from banks, insurers and asset managers into high impact companies is enabling:
- agribusinesses to pump ever increasing amounts of non-renewable groundwater
- tailings dams to be constructed at the heads of free-flowing rivers
- chemical, apparel and pharmaceutical companies to release toxic pollution, much of which is carcinogenic, posing a real and present danger to human health.
CDP’s analysis also finds that some of the world’s largest companies, in the most impactful sectors have consistently failed to disclose their water-related data to investors, through CDP. Of these, Chevron and Royal Dutch Shell are amongst the companies that have failed to do so for over a decade.
This is the first tool of its kind that allows financial institutions to understand the relative impact of different industrial activities on the world’s water resources. In doing so, the tool fills a critical data gap in the efforts of financial institutions to understand and address their exposure to water risk.
Via the tool, CDP hopes to provide the capital markets with the information needed to take action on water security – an area where progress has lagged behind other environmental issues, such as climate change, both in terms of how well the risks are understood, and how well integrated they are into investment decisions. CDP is also working on a tool that couples this impact data with CDP’s corporate action data.
Cate Lamb, Global Director of Water Security at CDP, commented:
“Achieving a water secure, net zero future will require a complete transformation of our global economy and urgent action is needed. To succeed, companies responsible for the greatest impacts on water resources must transform their business models, products and practices in ways that decouple production and consumption from the depletion of water resources.
“Financial institutions have a critical role to play in facilitating the transition to a water-secure economy. Water Watch: CDP’s Water Impact Index shows that the level of water impact in investment portfolios is significant, with banks, investors and insurers being exposed to critical levels of water impacts, and hence risk, through their shareholdings and loans. Equipped with the right information and robust data, investors can drive progress toward a water secure future.”
Adam Black, Head of ESG & Sustainability at Coller Capital, commented:
“We are excited to use CDP’s Water Watch to identify the potential impact of our portfolio on water security. ESG monitoring and engagement are core elements of our programme and we constantly seek new methods, data and tools to enhance our approach.
“However, as a secondaries investor with indirect exposure to thousands of underlying companies, we recognise the inherent challenges to effective monitoring and engagement. In that regard, we view the Water Watch as a valuable tool to efficiently screen our portfolio for water impact and identify particular company exposures where we may look to engage further on these risks. We look forward to using the tool to inform our work and to continue collaborating with the Water team more broadly as a member of CDP.”
Click here for more information
Sulzer has launched a new global Center of Excellence (CoE) for Water Treatment Solutions - the CoE consolidates Sulzer’s wastewater treatment expertise in a unified and global manner.
“SAS (Surplus Activated Sludge) is a bit weird and 
Owen Mace has taken over as Director of the British Plastics Federation (BPF) Plastic Pipes Group on the retirement of Caroline Ayres. He was previously Standards and Technical Manager for the group.
PureTec Separations, the Ledbury-based water treatment engineering firm, has appointed Dan Norman as its new Sales Manager – Water Process Systems, supporting the company’s continued growth in the UK and international markets.
Hear how Scottish Water has completed its £235 million Ayrshire Glasgow Resilience Project - customers across Greater Glasgow, Ayrshire and East Renfrewshire will now benefit from a more secure and resilient water supply.
Hear how United Utilities is accelerating its investment to reduce spills from storm overflows across the Northwest.
Find out more about the remarkable career opportunities on offer at WSP - scroll down to watch the inspirational video.