11

CDP WATER DISCLOSURE

GLOBAL WATER RISKCanadian Water SummitJune 14, 2011

Chris Hedemann

CDP Water Disclosurechris.hedemann@cdproject.net+44 (0)20 7415 7073www.cdproject.net/water-disclosure

Lead Sponsors

22

Overview

Global water risk– Greater and delocalised impact– How can we manage global risk?

CDP Water Disclosure– Our structure and mission– The business need for water information

Our first year’s findings– What businesses are doing about water– How are businesses in Canada engaging on

water?

33

Global risks have greater impacts

The Deepwater Horizon Spill(Source: Reuters)

44

Global risks have delocalised impacts

Marooned flood victims in Pakistan try to escape on helicopter side bars(Source: Reuters)

55

We need collective action to tackle global risk

While individual organizational efforts will be critical in helping to address the water challenge, collective efforts – across sectors and societal spheres – will also be required.

– CEO Water Mandate, Preamble and Core Elements, January 2011

While individual organizational efforts will be critical in helping to address the water challenge, collective efforts – across sectors and societal spheres – will also be required.

– CEO Water Mandate, Preamble and Core Elements, January 2011

66

We need relevant information to tackle global risk

We recommend that investors assess the reliance of their portfolios on water resources and their vulnerability to problems of water availability and pollution

The financial impact of water shortages on sectors and companies is unclear, because information on water use data and impacts is spotty and partial

– JP Morgan, Watching Water, April 2008

We recommend that investors assess the reliance of their portfolios on water resources and their vulnerability to problems of water availability and pollution

The financial impact of water shortages on sectors and companies is unclear, because information on water use data and impacts is spotty and partial

– JP Morgan, Watching Water, April 2008

77

CDP seeks corporate water disclosure on behalf of investors

354 Investorsrepresenting $43 trillion

408 Corporationsfrom Global 500, Australia

100, South Africa 100

Authority

Information

Information

Authority

88

CDP uses a 3-part questionnaire

• 1. Water management & governance

• 2. Risks & opportunities

• 3. Water accounting

99

CDP seeks corporate water disclosure on behalf of investors

354 Investorsrepresenting $43 trillion

408 Corporationsfrom Global 500, Australia

100, South Africa 100

Authority

Information

Information

Authority

1010

NBIM – Investor Expectations

A: Clear Water Management Strategy Clear strategy regarding water management Water footprint and risk analysis Preventive and corrective action plan for

identified risk

B: Sustainable Water Management Monitoring systems for environmental and

social impacts of activities with regard to water, including sustainable water measures

Consultation and/or collaboration with stakeholders

C: Governance Structure Transparent and well-functioning governance

structure Transparent performance reporting

1111

Overview of 2010 findings

Water is an issue now

There is general lack of awareness of risk in supply chains

Water presents significant opportunities

1212

Water is an issue, now

0% 20% 40% 60% 80% 100%

Responsibility for water at board level

A water policy or plan

Been impacted by water in last 5 years

Percentage of responding companies which have...

1313

Varied response across industry sectors

Utilities

Technology & Communications

Retail, Consumer Discretionary & Consumer Staples

Pharmaceuticals & Biotechnology

Oil & Gas

Metals & Mining

Industrial & Manufacturing

Food, Beverage & Tobacco

Construction, Infrastructure & Real Estate

Chemicals

39%

59%

49%

81%

29%

59%

49%

63%

29%

100%

1414

Lack of awareness of risk in supply chains

0%

20%

40%

60%

80%

100%

Operations in water-stressed regions

Risk in own operations Risk in supply chain

Percentage of responding companies which report the ability to identify...

1515

Opportunity is everywhere

62% of responding companies identify water-related business opportunities

Examples include– Improved water management leading to

reduced operating costs– Urbanisation and population growth

expanding market for water treatment chemicals and facilities

– Infrastructure to support growing populations and to adapt to climate change (e.g. flood defences, stormwater systems)

1616

Canadian companies are developing their engagement on water issues

Response rate

Have a water policy or plan

Have set concrete performance goal

Able to assess exposure to water stress in own operations

Able to assess risk in supply chain

0% 20% 40% 60% 80% 100%

Global 500Canada

10 Canadian companies responded from 15 that were invited

1717

Canadian companies with more sophisticated responses

Proactively managing water shortage by forecasting, measuring and saving water

Enhancing community water supplies in Pakistan and Tanzania

Aware of need to develop supply chain awareness and already taking the first steps

Setting strong targets in response to shortage risk and delivering on them

Engaged with developing water management plan in Lower Athabasca River

Engaging with NGOs including DUCS wetland group and WBCSD Water working group

1818

Key points

Local water issues create global risks with the potential for high, delocalised impact

Businesses and investors need to engage on water now to manage this risk

The first step is developing maturity in the measuring and monitoring of water issues

CDP Water Disclosure can help companies and investors take this first step

1919

CDP WATER DISCLOSURE

GLOBAL WATER RISKCanadian Water SummitJune 14, 2011

Chris Hedemann

CDP Water Disclosurechris.hedemann@cdproject.net+44 (0)20 7415 7073www.cdproject.net/water-disclosure

Lead Sponsors

2020

Key references

2030 Water Resources Group (2009). Charting our Water Future: Economic frameworks to inform decision-making

Beck, U. ‘Climate for Change, or How to Create a Green Modernity’. Theory, Culture and Society, 27(2-3): 254 - 266

Giddens, A. (2009) The Politics of Climate Change, Cambridge: Polity

Newson, M. (2009) Land, Water and Development: Sustainable and adaptive management of rivers, London: Routledge