Curtailing corporate water use

Can the rules for carbon reporting be applied to water consumption? Fueled by concerns of a shortage, the Carbon Disclosure Project is going to try.

By

E.B. Solomont

Thu, Apr 08 2010 at 1:55 PM

Related Topics:

Climate Change, Water Conservation

Photo: Steve Allen/jupiterimages.com

Hoping to capitalize on the success of its carbon-reporting program, a leading nonprofit is asking major corporations to disclose their water consumption.

Concerned that climate change could result in a water shortage, the Carbon Disclosure Project — the same group that convinced major companies to disclose greenhouse gas emissions — is asking the business community to come clean on how much water it uses, The New York Times reported.

With an eye toward establishing reporting standards, the Carbon Disclosure Project is asking 302 companies worldwide to put together detailed reports on their water use. The campaign includes an 11-page questionnaire that asks companies to specify to what extent they operate in water-stressed areas. To start, the questionnaire was sent to corporations in water-intensive industries — such as mining, oil and gas production, car manufacturing and pharmaceuticals.

So far, companies such as Ford Motor, PepsiCo and Molson Coors Brewing have signed on to the campaign.

“Unlike carbon, water use isn’t fungible,” said Bart Alexander, vice president for global corporate responsibility at Molson Coors. “You can’t offset a water shortage in one region with credits in another region.”

“I think the investor community is concerned about companies that are good at managing their costs, and increasingly water is a cost issue as demand grows in many parts of the world,” he added.

To be sure, the business community is grappling with water-relate issues. In New York, plans for Entergy’s Indian Point nuclear power plant were scrapped because of the massive quantity of cooling water that would have been needed. The Environmental Protection Agency (EPA) has added new water quality rules that apply to mining companies.

“For investors, it’s a material issue,” said Marcus Norton, head of C.D.P.’s Water Disclosure project. “It matters because long-term investors in particular see that water scarcity is going to impact companies’ operations and supply chains.”

Norges Bank Investment Management, an Oslo-based bank, counted more than 1,000 companies in its portfolio that face what’s known as water risks, said Anne Kvam, global head of ownership strategies.

“As investors, we need to know if companies are in industry sectors or regions where water supplies are scarce and how they are managing those supplies,” she said.

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