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Number of Investors Seeking Water Data Doubles

The number of institutional investors using the Carbon Disclosure Project (CDP) to seek data on companies’ water management has risen by over 150 percent, the CDP has announced.

This year 354 investors signed the CDP’s request to companies for water information, up from 137 last year. Those 354 investors control $43 trillion in assets.

The request went to the 400 most water-intensive companies in the FTSE Global 500. This is the second year that CDP has provided a system for businesses to report their water use and water management.

This week the CDP also sent its 2011 requests for climate change information, to 4,800 listed companies, on behalf of 551 institutional investors with $71 trillion in assets. CDP sends its carbon information requests to the largest listed companies in about 60 countries around the world.

Some of the investors signing both CDP’s climate change and water information requests are Allianz Group, Aviva, BBVA, CalSTRS, HSBC Holdings plc, ING, Mitsubishi UFJ Financial Group and National Australia Bank.

“It is clear that the effective management of both carbon and water will have a direct impact on a company’s ability to compete and grow in the future,” CDP’s chief executive Paul Simpson said.  “Companies that do not take action now will fall behind their peers who are already beginning to capitalize on the opportunity that the management of climate change and water brings.”

A recent study by researchers at the University of California – Berkeley and the University of Otago in New Zealand found that all other factors being equal, the greater a company’s greenhouse gas emissions, the lower its stock value. The study looked at firms in the S&P 500 and the top 200 firms traded in Canada, and used CDP’s primary corporate emissions data.

The FTSE CDP Carbon Strategy Indices have outperformed their UK benchmarks by 1.5% over a three year period, the CDP said.

“CDP has become the gold standard for reporting and sourcing corporate carbon data,” Yulanda Chung, head of sustainable business for CDP signatory investor Standard Chartered, said.

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4 thoughts on “Number of Investors Seeking Water Data Doubles

  1. I have been tuned into water issues for my entire life, and for the last 10 years I worked as an NGO attorney to guarantee access to free, clean, safe water for all people. When I returned for an MBA education a few years ago, I was somewhat surprised by the degree to which the importance of carbon management still heavily outweighed the need for water management within the business community. Certainly, the understanding was there within water-intensive industries, but not with the investment community generally. Climate change is critically important, but water troubles – old and crumbling infrastructure, lack of infrastructure, pollution, mismanaged stormwater and wastewater – pose immediate health risks to people around the globe. Too often, we take our water for granted. This article is heartening, showing that a broader group is finally waking up to water issues. Kudos to the CDP for including a system to assess water metrics.

  2. A 2002 study identified water related electrical consumption, just in California, at 52,000 GWh annually. Water cost less in Las Vegas than it does in Michigan where the state is surrounded by 84% of the surface fresh water in North America. Until the subsidies for water are eliminated and users pay the real cost, I, unfortunately, would expect little to happen.

  3. This all goes back to the true cost of manufacturing. The idea that raw materials are unlimited and the belief that waste material are not part of an end products cost are finally being questioned by investors. And moving operations to a country with less stringent environmental regulations is no longer a way to continue polluting because an organization’s global business is being tracked. Water is a critical resource and the CDP is doing a fantastic job documenting its industrial use.

  4. Water Disclosure Project (CDP) has done wonderful work in bringing hard data and focus to this un-clear and very present danger. Water is an often unconsidered commercial risk (and an increasingly recognized societal crisis). I am glad to see that through this risk investors are getting meaningful risk is finally getting some overdue attention.
    In a blog last fall (http://bluecloud9.blogspot.com/2010/11/green-technology-water.html) there was a mention that the Chairman of Nestles “Peter Brabeck-Letmathe, … warned water is a greater threat than climate change, and called for significant rises in water prices to pressure big users to be more efficient.” What is most intriguing, to me, is how few people recognize that by addressing the water crisis (blue-tech, replacing out-dated water delivery and waste treatment systems, new urban water use paradigms- re-use, etc.) the same investment dollars mitigates climate change drivers (in North America most water supply is is powered by coal fired electricity), create jobs, protects/promotes standards of living (as George Hawkins of D.C. Water stated- “every job…depends on water”), and may help reduce conflicts and military expenses (http://www.dni.gov/nic/NIC_2025_project.html).
    Many thanks to CDP’s Water Disclosure Project for getting us started…

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