GRI conference 2010Piet Klop, World Resources Institute

Reporting on risk

The Future of Sustainability Reporting in the Food Processing Industry

• forward looking, predictive

• close collaboration with (institutional) investors and corporations

• intelligence on environmental trends, policies, consumer preferences and their financial impact

Intro

Reporting on risk

1. Problem2. Disclosure

3. Riska) Sector research

b) Tools

c) Market information

4. Response

Extreme Scarcity<500

Scarcity500-1,000

Stress1,000-1,700

Adequate1,700-4,000

Abundant4,000-10,000

Surplus>10,000

Ocean/Inland Water

No Datam3/person/year

19751975200020002025202520032003

With permission from Coca Cola

Where is water scarce?

1. Problem

2. Disclosure3. Risk

a) Sector research

b) Tools

c) Market information

4. Response

Reporting on risk

Irrelevant (for investors)

“… many companies are not including material water risks and performance data in their financial filings, nor are they providing local-level water data, particularly in the context of facilities in water-stressed regions.”

• Life Cycle Analysis (water footprinting): necessary but not enough

• Context: renewable water availability• Corporate water behaviour corporate water risk• Risk: physical, regulatory, reputational

– Shortages, disruption– Cost increases– Competition, growth restrictions

• Production facilities + supply chain– Food & beverage (+ agriculture)

impact on impact by

Behaviour (CSR) risk (10K)

1. Problem

2. Footprinting

3. Riska) Sector research

b) Tools

c) Market information

4. Response

Reporting on risk

Water risks and impacts

Reputation

Regulatory (+ litigation)

Physical

Product useProduction process

Supply chainPoint of impact:

Type of risk:

Commodity price spikes Disruption in water supply

Water quality standards constraining power generation

Court settlement to scale back operations

Insecure water rights

Multinationals’ suppliers singled out for violations

Competition with social uses

Profligate water use

Scarcity limiting sales

Weeding Risk: Climate Change & Water Scarcity Impacts on

the F&B Sector

Food & Beverage

11

Magnitude & likelihood

12

Financial impacts

13

E.g. sugar

14