Business-Sector Water Reporting Varies Widely

For Immediate Release: Wednesday, May 2, 2007

Institute Study Reveals High Reporting Rates; Risk-data Absent

(OAKLAND, Calif.) Although many large global corporations are providing information on their water use, much of this information fails to address real water risks. A new Pacific Institute analysis of corporate non-financial reports suggests that most of these reports do not provide stakeholders and shareholders with useable water-risk information. These findings are detailed in the new study “Corporate Reporting on Water: A Review of Eleven Global Industries.”

“Water scarcity, contamination, and rising water-related costs are factors that can impact a company’s bottom line,” said Mari Morikawa, Pacific Institute research associate and lead author of the report. “This analysis shows that companies aren’t providing risk-relevant information to investors and stakeholders. It may also indicate that some companies and sectors are failing to pay attention to their most important water risks.”

The Institute evaluated how global companies recognize, address, and report their water-related risks and practices. Using a framework of ten key components for managing water risks, the authors reviewed 121 reports from 11 water-dependent industry sectors. They found that while 75% of the reports address freshwater use, few offer insight into many water-related risks facing businesses. Most reports lack context, quantitative data, supply chain information, and consistent methods and definitions.

“Water problems have saddled companies with plant closures, supply-chain disruptions, and public opposition to local business activities,” said co-author Jason Morrison, a program director with the Institute. “Our findings suggest that companies may not be taking these water-related risks seriously.”

The authors hope this report improves the understanding of strengths and weaknesses of corporate water reporting and that it raises awareness of how reports can be made more effective and valuable to corporations and stakeholders.

Today’s release builds on years of Institute analysis on water risks to business, including 2004’s “Freshwater Resources: Managing the Risks Facing the Private Sector,” upon which the ten key components for managing water risks were drawn.

In 2007, the Pacific Institute for Studies in Development, Environment, and Security celebrates twenty years of providing research for people and the planet. Founded in 1987, the Institute provides independent research and policy analysis on issues at the intersection of protecting the natural world, encouraging sustainable development, and improving global security.

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