A one-of-a-kind study on the water footprint of different industries concluded that clothing, financial services and fossil fuels are the sectors with the most severe impact on the world’s water resources.
To produce its first-ever Water Impact Index, which was released this morning, the CDP environmental disclosure platform ranked more than 200 industrial activities based on their impact on the quality and quantity of water in the industry. the world.
The pioneering study found that the garment and textile manufacturing, cotton growing, animal husbandry, oil and gas extraction, and mining sectors are among the sectors with the greatest impact. greatest potential impact on the world’s rivers, lakes, aquifers and streams.
The financial sector is also identified in the index as having a critical impact on global water resources, due to its role as a catalyst for water pollution from other industries, damage and obstruction of water resources. Waterways. The report highlights how the investment sector provides finance to miners who build tailings dams that cut free flowing rivers and harm ecosystems, to agribusinesses that pump large amounts of non-renewable groundwater for their operations. , and chemical, clothing and pharmaceutical companies that release toxic pollution into waterways.
The CDP said it hoped the information gathered through the tool, dubbed Water Watch: CDP Water Impact Index, would help fill a “critical data gap” that would allow financial institutions to better understand and manage their exposure to water-related risks. Campaigners argue that companies with a poor track record of managing their impacts on water could face a host of asset, regulatory, reputation and supply chain risks similar to those faced by carbon-intensive businesses.
“Financial institutions have a critical role to play in facilitating the transition to a water secure economy,” said Cate Lamb, global director of water security at CDP. “Water Watch: CDP’s Water Impact Index shows that the level of water impact in investment portfolios is significant, with banks, investors and insurers exposed to critical levels impacts on water, and therefore on risk, through their investments and loans. solid information and data, investors can move towards a water secure future. “
Lamb added that achieving a water-secure, zero-net-emission future would require a “complete transformation” of the global economy. “To be successful, the companies responsible for the greatest impacts on water resources must transform their business models, products and practices in such a way as to decouple production and consumption from the depletion of water resources,” he said. she declared.
The analysis warns that many of the world’s largest companies have “consistently failed” to disclose their water data to investors, with oil and gas giants Chevron and Royal Dutch Shell cited as failing to provide information. sufficiently detailed information on their impacts on water for more than a decade.
Adam Black, head of ESG and sustainability at Coller Capital, said the water index was a “valuable tool” that would allow the investor to screen their portfolio for the impact on water and identify the exposure to water risk of the companies in which it has invested.
“We are delighted to use CDP’s Water Watch to identify the potential impact of our portfolio on water security,” he said. “ESG monitoring and engagement are essential parts of our program and we are constantly looking for new methods, data and tools to improve our approach. However, as a secondary investor with indirect exposure to thousands of underlying companies, we recognize the challenges inherent in effective oversight and tracking. commitment.”