Companies Urged to Disclose Water Scarcity Risk

Companies in water-intensive industries are failing to monetise the actual risk a fall in water supply could have on the business, according to a report by a Boston-based business group.

Investor group CERES said it found that many companies could not specify what effect a drop in water supply would have on business activities.

According to CERES, only six out of 100 companies disclosed water-risks in their financial reports.

In a 2008 report, Californian utility PG&E Corp said if a drought was to occur it would have to replace its hydroelectric station with natural gas, which it described as just one example of the scale of effect such supply risks could hold.

Utilities is only one area that could suffer if water supply was cut. The oil and gas industry, food producers, building, mining and semiconductor industries could also be affected.

Earlier, the US Securities and Exchange Commission said that companies, while communicating business risks to investors, should consider water availability and climate change.

The UN predicts that by 2050 40% of the world’s population will live in areas of water scarcity, according to Bloomberg.