Water-Gulping Companies Don’t Disclose Risk

Most publicly traded companies that depend on water do not adequately disclose their financial risks to droughts and future regulations, even as water scarcity problems mount, according to a report released Feb. 11.

The report produced by Ceres, a coalition of investors and environmentalists and Swiss Bank UBS, ranked 100 of the biggest publicly traded companies on the quality, depth and clarity of their water disclosure risks and opportunities.

“This report makes clear that companies are not providing investors with the kind of information they need to understand the risks and opportunities posed by water scarcity,” said Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System.

The group, known as CalSTRS, is a member of Ceres.

Many kinds of companies depend on large and readily available water supplies to run their businesses. Energy, beverage, food and semiconductor companies are among the ones that face risks from dwindling water supplies, especially in developing countries where populations are rising and industries are growing.

Risks include food shortages and higher prices for commodities because of drought, a problem already evident in places such as Australia and the U. S. Southwest.

Some power companies use water to cool their plants. Others generate electricity at dams. Both face some of the biggest risks if they lose their water, the report said.

“It is clear that any threat to water security could have a significant impact on the bottom line of such companies,” said Julie Hudson, global head of sustainability research at UBS Investment Bank.



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