According to CDP’s annual water survey based on data supplied by big companies worldwide, China falls behind global counterparts in terms of addressing water risks.
The research show that companies operating in China reported a wide range of negative impacts on their businesses due to water, including property damage, brand damage and higher operating costs.
However, experts stress that the companies with headquarters in China have failed to evaluate how water will affect operations and to establish water-related targets or goals in relation to these problems.
These results are startling, experts say. Data reveal that China is struggling with dwindling water supplies and that 70% of fresh water resources are polluted to some degree.
Recent scandals have further undermined this difficult situation, damaging also the reputation of big business. Top clothing brands have been linked to devastating water pollution in the Chinese textile industry. Additionally, other companies were involved in a water contamination accident, raising strong public opposition.
CDPs annual Global Water Report, based on data supplied by 174 Global 500 companies, has recently and alarmingly revealed that while water risks to business are growing on global level, companies fail to provide information about these risks.
Although a growing number of companies reported impacts from droughts, pollution and other water related problems, almost half the businesses failed to disclose transparent water risk assessments to investors, expert say.
According to the head of CDP’s water program, this decrease in disclosure rate represents a serious matter.
On the other hand, experts highlight that there are also some positive signals: a growing number of companies are reporting water risk at a board level. However, researchers argue that there is still some way to go.
In this context, more companies worldwide are requiring their suppliers to reveal information about how they are addressing water risks.
According to the report, companies in the energy sector remain the least transparent. This is an alarming issue, given the relation between water and energy.
Moreover, expert stress that water challenges for companies in China are doomed to grow.
In this framework, the lack of water has already forced the closure of coal-fired power stations in arid regions of the country and will undermine the development of alternative energy sources in the future.
Experts stress that Chinese government need to undertake stricter measures on polluters and water waste establishing higher penalties and tighter targets in order to solve the main challenges. For instance, in 2012 the government closed down 200 companies that it judged energy inefficient or excessively polluting.
Additionally, public opinion and activists play a central role in this situation. Some projects have been forced to stop due to increasingly active public movement in China. This means that the consumers can play a crucial role driving significant changes.
Furthermore, without government action, it will be difficult to achieve a real change, experts suggest.
The gLAWcal Team
Wednesday, 6 November 2014