Tuesday, June 19, 2012

Report shows more corporations disclose water risk following SEC guidance, though data are lacking

Environmental Expert: Overall corporate disclosures of water-related risks have increased since 2009, but most reporting remains weak and inconsistent according to Clearing the Waters: A Review of Corporate Water Risk Disclosure in SEC Filings, a new report issued today by Ceres.

Since 2010, the Securities and Exchange Commission has required companies to disclose financially material risks from climate change to their investors. These risks include “significant physical effects of climate change, such as effects on the severity of weather (for example, floods or hurricanes), sea levels, the arability of farmland, and water availability and quality.”

In light of this guidance, Clearing the Waters analyzes changes in water risk disclosure by more than 80 companies between 2009 and 2011, finding that though reporting has risen, it is lacking especially in regard to data on financial impacts, quantitative water metrics and potential supply chain risks. The report covers water use in eight water intensive sectors: beverage, chemicals, electric power, food, homebuilding, mining, oil & gas and semiconductors.

...As a result of the increasing impacts of climate change and economic and population growth, many regions of the world are on course to suffer major fresh water deficits in the next 20 years. Recent studies suggest the world may face a 40 percent global water shortfall by 2030. Drought and flood cycles have also led to billions of dollars in losses for corporations worldwide. Drought in China in the spring of 2012 left 3.5 million people with limited or no access to drinking water and cost the affected provinces an estimated $2.3 billion. Flooding in Thailand in November 2011 cost the semiconductor industry an estimated $15-20 billion....

Aerial view of the 2010 flooding in Bangkok, US Army photo

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