The Carbon Disclosure Project (CDP) has asked the world’s largest companies, including a host of Indian firms such as Bhel, Indian Oil, NTPC, ONGC, ITC, L&T and Reliance Industries, to report on their water risks. Reporting on water risk requires companies to measure their water footprint, assess investment risks and identify commercial opportunities not only in their operations but also supply chains.
A UK-based non-profit organisation, CDP is known for maintaining an exhaustive inventory of carbon emissions of thousands of businesses on behalf of the worlds largest investors, including Indian investors like IDBI Bank, IDFC and Yes Bank. CDPs new water disclosure initiatives is also supported by 137 financial institutions with $16 trillion in assets. Talking to FE, Paul Simpson, chief operating officer, CDP, said, “Our new water disclosure initiative seeks to help companies assess their water risks and lay down the road map to function in a carbon constrained world.” The initiative assumes importance as water scarcity becomes an important business issue. A McKinsey report titled Charting our water future has estimated that global water supply shortage will be to the tune of 40% by 2030. This could lead to higher costs for companies, affecting their agricultural and manufacturing processes.
In India, the report expects the demand to go up to 1.5 trillion m3 against the current water supply of 740 billion m3. Its already causing regulatory risk for businesses in some states. For example, the Kerala government has turned the heat on global beverage companies in the state. Water disclosure is expected to help businesses pre-empt such situations by identifying water hotspots, creating opportunities for innovation and water proofing operations.
Source: The Financial Express
Published on 10 April 2010