Two South African mining companies – Kumba Iron Ore and Harmony Gold – feature among six other corporations across the globe achieving an A rating for their efforts to improve water security in 2015.

This is according to the first global ranking of corporate water stewardship revealed recently by global non-profit group CDP, which holds the most comprehensive dataset of publicly available corporate water information collected on behalf of investors.

The remaining companies in the top eight identified are based in the US, Japan and Finland. They include:

  • Asahi Group Holdings (Japan)
  • Colgate Palmolive (US)
  • Ford Motor Company (US)
  • Metsä Board (Finland)
  • Rohm Co (Japan)
  • Toyota Motor Corporation (Japan)

In a year when the World Economic Forum has ranked global water crises – including drought, increased risk of flooding and deteriorating water quality – as the greatest threat facing the planet over the next decade in terms of impact, CDP’s new global water report, ‘Accelerating action‘, shows that some companies are beginning to move ahead of the pack in addressing water concerns.

Eight businesses from four sectors have joined the CDP Water A List for their approach to water management.  The Water A List highlights those companies that are on the path to sustainably managing water resources.  They are taking action to mitigate corporate water risk and realising opportunities in ways that not only reduce their own impacts but critically, improve water security for the environment and other water users.

There is growing interest among institutional investors in water-related risk, opportunity and disclosure, with over four times the number of investors backing the CDP request this year compared with the programme’s first year in 2010.

This year 617 institutional investors asked 1 073 of the world’s largest publicly listed companies across industry sectors with high water vulnerability or impacts to disclose how they are adapting and responding to worsening water security.

CDP’s new global water report analyses the 405 company responses to this request – over twice the number of companies analysed in 2014.

Ingrid Dyott, portfolio co-manager, SRI/Core Equity at Neuberger Berman says: “Looking at water data is a part of identifying quality.  One risk in investing is not knowing what you own.  Looking at water issues through CDP gives investors a fuller sense of the investment opportunity.  In industries where water is relevant, it is absolutely critical therefore that companies disclose to CDP.”

While there are signs of progress in corporate water action from this group of leading companies, there is a gap with the rest of the market that is of increasing concern to investors.

Despite on-going water crises such as droughts in California and parts of Brazil, more than half (53%) of companies are failing to conduct a comprehensive risk assessment – a basic first step for any company seeking to ensure business resilience against water issues.

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