Water risk identification

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1 OECD/Dutch Ministry of Economic Affairs, 9th Nov 2016: Managing Water Risks for Agriculture - a Discussion with the Private Sector Water risk identification Dr Nicole Dando Senior Technical Manager - Water Page 1

2 About CDP Aims to achieve the reallocation of financial capital based on environmental data By providing a global reporting platform for corporates to communicate on the measures they are taking for environmental risk reduction and climate change resilience On behalf of 643 investors On behalf of 24 multi national customers Page 2

3 The vision of CDP s Water Program: To catalyse action to improve water security worldwide Through CDP s Water Information Request to more than 1,250 companies Page 3

4 Principles disclosure as a transformative process Drives greater transparency of water issues Facilitates informed decision making Encourages action to mitigate water risk Promotes competent and robust governance of water issues Page 4

Number of signatories Assets (US$Trillion) Waking up to water risk 700 CDP Signatories & Assets: 2010-2016 80 2016 600 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 2016

5 Number of signatories Assets (US$Trillion) Waking up to water risk 700 CDP Signatories & Assets: Axis Title investors with US$ 67 trillion in assets 607 companies disclosed through the water program Number of signatories Assets (US$ Trillion) Page 5

6 CDP Water Questionnaire Current state Risk assessment Implications Accounting Response Page 6

7 Risk assessment module evidence of a robust risk assessment including frequency, geographic scale, timeframe, contextual issues such as regulatory changes. in direct operations and supply chain. investors seek confidence that a company s risk awareness and the disclosure of its risks is complete and comprehensive Page 7

8 Risks: physical, regulatory and reputational Please list the inherent water risks that could generate a substantive change in your business, operations, revenue or expenditure, the potential impact to your direct operations and the strategies to mitigate them % of facilities at risk; financial value affected Location Drivers Potential impacts likelihood, financial impact Response strategy details and costs Page 8

9 The Consumer staples sector: Reports the highest exposure to risk (77%) and current detrimental impacts (41%). The highest proportion of companies (51%) undertaking a comprehensive risk assessment in both direct operations and supply chain. But only half of companies! Less than half (47%) of companies require key suppliers to report water use, risks and management Page 9

10 Most commonly reported water-related risks Declining water quality Increased water stress Increased water scarcity Flooding Most commonly reported risk impacts: Higher operating costs Plant/production disruption leading to reduced output Supply chain disruption Constraint to future growth Page 10

11 Commonly reported risk responses Established site-specific targets Increased investment in new technology Infrastructure investment Alignment of public policy position with water stewardship goals Engagement with public policymakers Engagement with community and other stakeholders in the basin Page 11

12 How is the risk data used? Have you evaluated how water risks could affect the success (viability, constraints) of your organization's growth strategy? over the next 1 year over the next 5 years over the next 10 years Page 12

13 CDP Forward looking / TRANSITION Do companies have a vision of future water risks, and future good practice in water management? Or even better, a range of visions? How are you planning for transition? Is what you are doing now consistent with that transition? Page 13

Forward thinking: Water scenario analysis 2016 Study: Do companies in the FBT sector carry out scenario analyses of uncertain water futures, if so how? Heintzman, Laura. September 2016.

14 Forward thinking: Water scenario analysis 2016 Study: Do companies in the FBT sector carry out scenario analyses of uncertain water futures, if so how? Heintzman, Laura. September Water scenario analysis best practices: A case study approach analyzing the food, beverage tobacco sector. Master s thesis, Centre Page 14 for Environmental Policy, Imperial College London.

15 Other CDP developments: invitation to support Sectorisation to improve relevance for data providers and users Development of a methodology for Context (science) Based Water Targets Page 15

16 Find out more: o o o nicole.dando@cdp.net Page 16

Investor perspective; the importance of corporate water stewardship and disclosure

Investor perspective; the importance of corporate water stewardship and disclosure 26 th March 2015 sarah.robertson@cdp.net CBichta@bostoncommonasset.com Chris.fowle@cdp.net Page 1 Agenda Introduction