World's top firms fail to report on supply chain water use

19 October 2012

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21 October 2012 | Adam Leach

None of the world’s top 250 companies reported the total amount of water used by their supply chain, even though the issue has been raised as one of the most significant long-term risks for business.

Water Scarcity: A dive into global reporting trends, published this week by KPMG, looked at how the Fortune 250 had reported on its water use in the past year. It found 76 per cent addressed water issues in their corporate responsibility reporting and a third reported water usage within the company. But not one of the companies reported how much water was used throughout their supply chain, and just three disclosed a water footprint including any part of the supply chain.

The report highlighted water usage as an area of increasing interest for investors and shareholders when assessing a businesses performance and cited reporting on water usage in the supply chain as an increasingly important method of showing improved efficiency. “Ultimately, effective management of water risks requires companies to gain a clear understanding of the impact of their water footprint and risk exposure both up and down the value chain,” said the report.

It recommended when reporting on water use, companies should have thoroughly assessed their own operations and their supply chain to identify where the business is most exposed to water scarcity risks, quantified the potential impacts of these risks and implemented an effective water management plan.

A second report published this week also highlighted the issue of water use in supply chains. The Impact of Crisis on Water Stewardship in the UK Food and Grocery Industry, published the Institute of Grocery Distribution, called for the different tiers of the supply chain to work more closely together on the issue. It also called on the sector to develop “a common set of principles and goals that define a drought resilient supply chain”. Further, it urged a structure to be put in place to enable the principles to be followed and initiatives to be launched that would enable the management and planning for drought related risks.

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