WATER WILL run out before oil. So claimed Nestlé chairman Peter Brabeck-Letmathe not long ago. More recently, Justin King, Sainsburys chief, used his lecture at this years City Food Lecture to highlight water as potentially the biggest environmental concern facing the food industry. Various surveys have also shown that water scarcity is concerning businesses from all sectors.
And yet the majority of the worlds biggest companies apparently lack a long-term water strategy. According to KPMG Internationals latest Sustainable Insight, most companies are discussing the issue in their reports, but far fewer are presenting a robust response or offering ways to help executives develop and communicate strategic responses to the global water scarcity challenge.
The new insight, entitled Business responses to water scarcity, provides analysis of the corporate responsibility (CR) reports of the largest companies across 34 countries, including the worlds top 250 companies.
It found that while three quarters of the worlds largest 250 companies address water issues in CR reports in some way, only a few currently report on the water footprint of any part of their supply chain, and none has reported on the water footprint of its entire supply chain.
The results varied by sector. Just 50% of the food and drinks companies reported a long-term water strategy. When it comes to reporting on their water footprint they fared even worse: just 20% completed such reports, the lowest of any sector.
The fact that so few large businesses do not yet demonstrate a long-term strategy to deal with water scarcity in their CR reporting is also a concern said Vincent Neate, KPMG head of climate change and sustainability. Not least because investors and the public will want to see more and more evidence that these businesses are looking at the risks posed by water scarcity and working hard to reduce consumption.
Many companies have not yet fully grasped the importance of strategic planning or communication in relation to long term water supply mitigation and use, Neate explained. Investors are becoming more aware of the risks and opportunities that water scarcity represents within their portfolios and are increasingly looking for companies to build responses into their longer-term strategies.