Improved Corporate Water Reporting Needed Despite Progress in Recent Years

For Immediate Release: March 11, 2009

Oakland, CA ­– March 11, 2009 Significant improvement is needed in the depth and breadth of corporate reporting on water, particularly regarding water issues outside of direct business operations, according to a major study released today.

Commissioned by the United Nations Global Compact’s CEO Water Mandate, the report by the Pacific Institute finds better and more expansive disclosure is critical for understanding the true risks and impacts associated with companies’ water needs.

“Many companies are disclosing important aspects of water management in their corporate social responsibility reports, but the study demonstrates that very few are conveying complete and consistent information on a range of important water issues,” said Gavin Power, Deputy Director of the U.N. Global Compact and Head of The CEO Water Mandate. “This groundbreaking report assesses current and emerging practices, and offers critical guidance for companiUes on next-generation water reporting.”

The newly released CEO Water Mandate report, Water Disclosure 2.0 – Assessment of Current and Emerging Practice in Corporate Water Reporting, examines and analyzes corporate reporting on water sustainability for 110 companies across 11 water-intensive sectors. The assessment tracks the six key elements addressed by the CEO Water Mandate: Direct Operations, Supply Chain and Watershed Management, Collective Action, Public Policy, Community Engagement, and Transparency.

Managing water use and impacts is increasingly important in a world where water scarcity is becoming more pronounced, climate change is exacerbating water problems and uncertainty, pollutants from corporate water discharge is fouling waterways, and communities are becoming more conscious of their water resources. Thus accurate measurement and reporting is a key to more sustainable water management.

“There are a range of commonalities, differences, and gaps among water reports,” said Jason Morrison, program director at the Pacific Institute and lead author of the report. “By laying out the various reporting approaches and issues covered, including showcasing good practices, The CEO Water Mandate is providing de facto guidance for businesses to improve their water reporting, recognizing that it is increasingly going to matter for their business success and security and for stakeholder and community confidence and support.”

Among the most significant findings of Water Disclosure 2.0 are:

  1. Corporate reporting on water needs to be expanded to include actions and impacts outside of direct operations, including information on supply chain performance, regional or local water use, and contextual information for better understanding corporate water risks and impacts.
  2. Less than half of the companies assessed described their materiality assessments or their efforts to utilize stakeholder input to inform their Corporate Responsibility reporting, both key measures underpinning robust reports.
  3. Water reporting was not sufficiently comprehensive or comparable, particularly with regard to a number of the “process-oriented” elements addressed in The CEO Water Mandate, including Public Policy, Supply Chain Management, and Collective Action, which were addressed by only a small percentage of companies.

“As we realize the importance of full awareness of companies’ water footprint and the need for transparency in reporting it, we need to work to ensure more meaningful and consistent ways of conveying that information,” said Morrison. “With greater detail in reporting on individual corporate actions, these reports will be more useful as we work to more sustainably manage the world’s water resources.”

The CEO Water Mandate is a United Nations Global Compact initiative, launched by the U.N. Secretary-General, and is designed to help the private sector better understand and address its impacts on and management of water resources. Since the inception of the Mandate in 2007, endorsing companies and external stakeholders alike have identified transparency as a key issue. To ensure accountability and advance good practice in water reporting in the private sector, The CEO Water Mandate established Phase One of its Transparency Framework in September 2008, which among other things spells out the objectives and principles for water reporting within the initiative. The Mandate and endorsing companies agreed that its next phase of activity should begin with a compilation and analysis of current practices as a means of advancing water reporting.

The Pacific Institute is dedicated to protecting our natural world, encouraging sustainable development, and improving global security. Founded in 1987 and based in Oakland, California, the Institute provides independent research and policy analysis on issues at the intersection of development, environment, and security and aims to find real-world solutions to problems like water shortages, habitat destruction, global warming, and environmental injustice. The Institute conducts research, publishes reports, recommends solutions, and works with decision makers, advocacy groups, and the public to change policy. www.pacinst.org