Disclosure CEO Water Mandate 2014

1

Corporate Water DisClosure GuiDelinestoward a Common approach to reporting Water issues

September 2014

Core team

Jason Morrison Peter Schulte Project Director Lead Author

Pacific Institute pacinst.org

Lauren Koopman and Natalie Teear PricewaterhouseCoopers www.pwc.com

Cate Lamb, Karina de Souza, and Marcus Norton CDP (formerly the Carbon Disclosure Project) www.cdproject.net

Tien Shiao and Paul Reig World Resources Institute www.wri.org

strateGiC partner

Bastian Buck and Laura Espinach Global Reporting Initiative www.globalreporting.org

aCknoWleDGments

The CEO Water Mandate Secretariat and project team would like to thank the Mandate-endorsing companies Merck, GlaxoSmithKline, Veolia, Coca-Cola, and Sasol, whose funding support enabled the development of these Guidelines. We would also like to recognize and thank the members of the Mandates Water Disclosure Working Group (WDWG) and the Corporate Water Disclosure Stakeholder Advisory Group (CWDSAG) for their ongoing support and feedback throughout the development of the Guidelines (the members of the WDWG and CWDSAG are listed in Appendix D).

DisClaimer

All of the views expressed in this publication are those of the CEO Water Mandate and do not necessarily reflect those of the project sponsors or the members of the WDWG or CWDSAG.

DesiGner

Dana Beigel

Cover photo: Notebook at Dreamstime

ISBN-10:1893790584 ISBN-13:978-1-893790-58-2

Pacific Institute 654 13th Street, Preservation Park Oakland, CA 94612 pacinst.org

Corporate Water DisClosure GuiDelinestoward a Common approach to reporting Water issues

September 2014

5Foreword

Companiesarefundamentallychangingthewaytheyaddresswater.Increasingly,theyareinvestinginwater-efficienttechnologies,workingwithsupplierstoencouragemoreresponsiblewateruse,designingcleanerandmoreefficientproducts(andthushelpingconsumerslowertheirwateruse),andseekingtoadvancesustainablewatermanagementoutsidetheirfencelinesasawaytomitigatewater-relatedrisksandnegativeimpacts.Atthesametime,corporatewaterdisclosuretheactofreportingtostakeholdersinformationrelatedtothecurrentstateofacompanyswatermanagement,theimplicationsofthatstateforthebusinessanditsstakeholders,andhowthecompanydevelopsandimplementsstrategicresponseshasemergedasakeycomponentofcorporatewatermanagementpractice.

Inresponsetothegrowingimportancetobusinessesofbothwatermanagementgenerallyanddisclosurespecifically,anumberofinitiativesareseekingtoprovideguidanceonhowcompaniescan:

Measuretheirwaterperformance

Assessconditionsintheriverbasinswheretheyoperate

Understandtheirwater-relatedchallengesandopportunities

Developeffectivewatermanagementstrategies

Communicatetheseissuestostakeholders

Theseinitiativeshavecatalyzedsignificantprogresstowardmoresustainablecorporatewatermanagement.However,theproliferationofwaterassessmentanddisclosuretoolsandmethodologieshasalsoledto:

Companiesdivertingimportantresourcestocompletemultiplewaterorsustainabilitysurveysofvaryingcontent

Companiesusingavarietyofmetricsthatarenoteasilycomparable,therebyweakeningthevalueofdisclosureofferings

Beyondthis,currentpracticeincorporatewaterdisclosure(evenamongthemostadvancedreporters)typicallydoesnotadequatelycapturetheincrediblycomplexandlocation-specificnatureofwaterresourcedynamicsandcorporateactiononwater.Manycompaniesarethereforelookingfordetailedguidanceonhowtomoreeffectivelydisclosethemanyelementsofcorporatewatermanagementpractice.

Foreword

6 Corporate Water Disclosure Guidelines

TheCEOWaterMandatesCorporateWaterDisclosureGuidelinesofferacommonapproachtodisclosure.Theyputforwardmetricsthatcanbegintoharmonizepracticeandalsoprovideguidancefordefiningwhattoreport.ItisourhopetheseGuidelinesdriveconvergenceandharmonizationwithrespecttohowcompaniesreporttheirwatermanagementpracticeswhilehelpingtominimizereportingburdens,thusallowingcompaniestoallocatemoretimeandresourcestoactivelymanagewater.

ThePacificInstitute(representingtheMandateSecretariat)ledthedevelopmentoftheGuidelines,seekinginputfromorganizationsandinitiativeswithexpertiseinthisarea.PricewaterhouseCoopersLLPservedasastrategicadviserandprovidedinputthroughoutthisprocess.CDP(formerlytheCarbonDisclosureProject),WorldResourcesInstitute(WRI),andGlobalReportingInitiative(GRI)wereprojectpartners,offeringinsightregardingwaterdisclosurepracticesandhelpingtoensurethattheGuidelinesbuiltonexistingapproacheswherepossibleandappropriate.

TheprojectteamregularlyconsultedwiththeMandatesWaterDisclosureWorkingGroup(WDWG)comprisingrepresentativesfrommanyMandate-endorsingcompaniesaswellaswiththeCorporateWaterDisclosureStakeholderAdvisoryGroup(CWDSAG),whichincludedavarietyofrepresentativesfromcivilsocietygroups,water-relatedtooldevelopers,tradeassociations,government,andintergovernmentalorganizations.AcompletelistofWDWGandCWDSAGmemberscanbefoundinAppendixD.ConsultationwiththeseindividualswasgearedtowardensuringthattheGuidelinesremainuser-friendlywhileaddressingthewidearrayofcompanyandstakeholderinterestsincorporatewaterdisclosure.

Giventhatcorporatewatermanagementanddisclosurepracticearerapidlyevolving,theCEOWaterMandateplanstorevisitandamendtheGuidelinesasneeded.

ContentsSECTION 1 Introduction .............................................................................................................4

Objectives...........................................................................................................................................4

HowToUsetheGuidelines.............................................................................................................4

SECTION 2 Aligning Disclosure with Corporate Water Management Practices .................8

TheBusinessCaseforCorporateWaterDisclosure..................................................................8

HowDisclosureFitsIntoCorporateWaterManagement...................................................... 10

TheLong-TermCorporateWaterManagementMaturityProgression................................ 12

HowDisclosureFitswithCorporateWaterManagementMaturity.................................... 14

SECTION 3 Company Water Profile .........................................................................................17

SECTION 4 Defining What to Report ......................................................................................20

RelevanceandMateriality:WhatareThey?............................................................................. 20

AssessingRelevanceandMaterialityforWater-RelatedTopics........................................... 21

STEP 1: Identifying Relevant Water-Related Topics ........................................................................ 21

STEP 2: Prioritizing Relevant Water-Related Topics ....................................................................... 24

STEP 3: Validating the Outcomes of the Materiality Assessment .................................................... 26

STEP 4: Review .................................................................................................................................. 26

CommunicatingtheProcessForDefiningWhattoReport.................................................. 26

SECTION 5 Detailed Disclosure ...............................................................................................30

UNDERSTANDINGANDLINKINGCOMPONENTSOFTHEFRAMEWORK.......................... 30

Basic and advanced reporting .......................................................................................................... 30

Geographic/geopolitical scale of reporting ....................................................................................... 32

Connections between sections and subsections ................................................................................. 32

Linkages across sustainability issues ................................................................................................. 33

ASSESSINGTHECURRENTSTATE.............................................................................................. 35

Context ............................................................................................................................................... 36

Performance ....................................................................................................................................... 40

Compliance ........................................................................................................................................ 47

CONSIDERINGTHEIMPLICATIONS........................................................................................... 49

Business Risks ..................................................................................................................................... 50

Business Opportunities ...................................................................................................................... 54

External Impacts ............................................................................................................................... 56

DEVELOPINGASTRATEGICRESPONSE.................................................................................... 60

Policies, Governance, and Targets................................................................................................. 61

Internal Actions............................................................................................................................. 66

External Engagement.................................................................................................................... 71

APPENDIX A: Corporate Water Disclosure Glossary .............................................................78

APPENDIX B: Harmonizing Terminology the Relationship between Water Scarcity, Water Stress, and Water Risk .........................83

APPENDIX C: Interactive Database of the Worlds River Basins .........................................85

Appendix D: Water Disclosure Working Group Members and Corporate Water Disclosure Stakeholder Advisory Group Members ................................87

3Contents

SECTION 1 introduction


SECTION 1 introduction

OBJECTIVES

TheseCorporateWaterDisclosureGuidelinesseektoadvanceacommonapproachtocorporate water disclosure thataddressesthecomplexityandlocalnatureofwaterresources.Inordertoachievethisoverarchinggoal,theGuidelines:

Identifycommoncorporatewaterdisclosuremetricsthatsupportharmonizationandcomparabilityovertimeandacrosscompanies

Provideguidanceonhowcompaniescanassessthewater-relatedtopicsthatarethemostrelevanttothemandtheirstakeholders(aswellashowtoreportthisassessmentprocess)

Describehowcompaniescanbestreportactivitiesthataredifficulttodepictquantitatively,suchaspolicyadvocacyorengagementwithnongovernmentalorganizations(NGOs),governments,suppliers,andcommunities

Aligncorporatewatermanagementwithdisclosuresoastoenablecompaniestounderstandwhichinformationismostappropriatetoreportandhowtogeneratewaterdisclosurecontent

HOW TO USE THE GUIDELINES

STRUCTUREANDAPPLICABILITy

Corporatewatermanagementobjectivesandactivitiesvarygreatlydependingonindustrysectorandgeographiclocation.Thisdynamicleadstomanypossibledisclosureapproachesandmetricsthataremorerelevanttocertaincompaniesthanothers.Inthespiritofadvancingharmonizedreportingpractices,allthesuggestedmetricsandinformationprovidedintheGuidelinesaredesignedtobeapplicabletoabroadrangeofcorporatewaterusers,regardlessofindustrysectorandregion.However,manycompanieswilllikelychoosetoaugmenttheirreportswithmetricsandinformationparticularlyrelevanttotheirspecificindustryorgeography.

Corporate water disclosurealsovariessignificantlydependingontherelevanceofwatertothecompanyanditsstakeholdersandthematurityofacompanyswatermanagementpractices.Forthisreason,somecompaniesmaynotdeemitnecessaryorhelpfultoreportthefullrangeofinformationsuggestedintheseGuidelines.Othersmaybeabletoreportonlyalimitedamountofwater-relatedinformationduetonascentwatermanagementpractices.TheseGuidelinesaredesignedtobeapplicabletothiswidespectrumofprospectivedisclosers.Theyaredividedintofoursections.

Section 2: Aligning Disclosure with Corporate Water Management Practicesdiscussestheprocessesthatunderpinacompanyswaterdisclosure.Indoingso,itillustrateshowcompaniesgeneratewaterdisclosureinformationwithintheirbroaderwatermanagementpractice,aswellashowwaterdisclosureissituatedwithintheireffortstoimproveaswaterresourcemanagersovertime.Thissectioncanhelpacompanyassesstherelativematurityofitswatermanagementpracticeandindoingsoidentifythewater-relatedinformationthatitwilllikelybeabletoreportmostrobustly.

5SECTION1Introduction

Section 3: Company Water Profiledescribeshowacompanycanofferasnapshotofitswatermanagementthatabroadspectrumofaudienceswilleasilyunderstand.Theprofilecanbeincludedincompanysustainabilityreports,websites,financialreporting,andotherpublications.

Section 4: Defining What to Report providesguidanceonhowcompaniescandeterminewhatwater-relatedtopicsarerelevanttothecompanyanditsstakeholdersandwhatinformationismaterialtoreport,aswellashowcompaniescanreportthisprocessitself.Thissectioncanhelpacompanyjustbeginningtoconsideritsapproachtowatermanagementtoassesstheextenttowhichitshouldreport.Itcanhelpmoreadvancedcompaniesdeterminewhichspecificwater-relatedtopicsarematerialtothem.

Section 5: Detailed Disclosureprovidesin-depthguidanceonthespecifictypesofinformationthatcanbeincludedincorporatewaterdisclosuresanddiscusseshowcompaniescanstructurethisinformationinacoherentmanner.Topromoteaccessibilitytoawiderangeofreaders,themetricsandotherinformationofferedinSection5areorganizedaccordingtomaturityofpractice.

Basic: Metricsorindicators(quantitativeorqualitative)thatcandemonstratemeaningfulaction.ThisinformationisdefinedinawaythatenablesmostSMEsandthosewithnascentwatermanagementprogramstocollectandreportit.Inmostcases,companiesfocusonbuildingtheircapacitytoassessanddisclosethesecontentareasbeforeproceedingtoreportingmoreadvancedpractices.

Advanced: Aspirationalguidanceaimedatcompanieswithmaturewatermanagementpractices.Inadditiontoreportingbasicpractices,advancedreportersalsoprovideabroaderandricherlookintotheirwater-relatedtopicsthatultimatelydeliversgreatervaluetodisclosureaudiences.

Section5alsoincludesseveralexcerptsfromactualcompanywaterdisclosuresthatservetohighlightgoodandinnovativereportingpractices.

Theappendixes,someofwhicharefoundattheendofthisdocumentandsomeofwhichareavailableontheweb-basedversionoftheseGuidelines,providevarioustypesofdetailedguidance,examplesofpractice,toolsandresources,andothermaterialsthatsupporteffectivecorporatewaterdisclosure.

Termsinpurple bold fontthroughouttheGuidelinesaredefinedintheglossaryinAppendixA.

Click here

A web-based version of these Guidelines can be found at:

ceowatermandate.org/disclosure. It features the content offered in this print version as well as additional

guidance and resources. In this docu-ment, grey and yellow circles featur-

ing the wi-fi symbol link to guidance and tools available only on the web-based version of the Guidelines.


THECORPORATEWATERDISCLOSUREFRAMEWORK

Thefullrangeofwater-relatedinformationthatcompaniesreportissummarizedintheCorporateWaterDisclosureFramework(Figure1).TheDisclosureFrameworkisdividedintothreebroadpillarsofinformationwhichtrackdirectlywiththelastthreesectionsoftheseGuidelines(i.e.,CompanyWaterProfile,DefiningWhattoReport,andDetailedDisclosure).TheDisclosureFrameworkservesasawaytocategorizethevarioustypesofcontentfeaturedincomprehensivecorporatewaterdisclosureandtounderstandthestructureoftheseGuidelines.

FiGure 1: Corporate Water Disclosure Framework

DETAILED DISCLOSURE

External impacts

Policies, governanceand targets

Current state Implications Response

Def

inin

g W

ha

t to

Rep

or

t

External engagement

Business risks

Performance Internal actions

Compliance

Context

Co

mpa

ny

Wa

ter

Pr

ofi

le

Business opportunities

Linkages across sustainability issues (e.g., food, energy)

Connections between sections and subsections

HOWTOUSETHEGUIDELINESINCONjUNCTIONWITHOTHERTOOLS

TheGuidelinesaimtoinformexistingandemergingworkinthefieldofcorporatewatermanagement,assessment,anddisclosure.Specifically,CDPwillseektoalignfutureiterationsofitsWaterInformationRequestwiththeGuidelineswhereverpossible.ThemetricsandinformationputforthintheGuidelinesmightalsoprovehelpfulinthedevelopmentoffuturewater-relatedaspectsofGlobalReportingInitiatives(GRI)G4Guidelines.Finally,itisourhopethattheGuidelinesmightbeadoptedby,orintegratedintoproductsbeingdevelopedby,othercorporatewaterinitiatives,suchastheAllianceforWaterStewardship(AWS),Ceres,GlobalEnvironmentManagementInitiative(GEMI),WaterFootprintNetwork(WFN),WorldBusinessCouncilforSustainableDevelopment(WBCSD),WorldResourcesInstitute(WRI),WorldWildlifeFund(WWF),andothers.

TheGuidelinesreferenceotherwateranddisclosuretoolsandresourcesatrelevantpointsthroughoutthedocument.Alistofthesetoolsandresourcesisprovidedontheweb-basedversionoftheGuidelines.However,theGuidelinesdonotendorseanyspecifictools.

7SECTION1Introduction

SECTION 2 aligning Disclosure with Corporate Water management practices


SECTION 2 aligning Disclosure with Corporate Water management practices

Corporate water disclosureisonlyoneaspectofacompanysoverallwatermanagementprogramsandpractices.Indeed,effectiveimplementationofcorporatewaterstrategiesreliesoniterativemanagementsystemsfordifferentwater-relatedactivities,includingthosepertainingtointernalcorporatepolicies,governance,andoperationalperformanceaswellasengagementwithstakeholdersoutsidethecompanyfenceline.

Thissectiondescribeshowwaterdisclosureissituatedwithinandcontributestothesebroadermanagementprocessesandhowitprovidesbusinessvalue.Thesectionoutlinesthepracticalandadministrativestepsthatmakeupatypicalcorporatewatermanagementcycleandthenoffersanoverviewofhowthelong-termmaturityandevolutionofacompanyswatermanagementpracticesrelatetoitswaterdisclosureefforts.

THE BUSINESS CASE FOR CORPORATE WATER DISCLOSURE

Companiesareincreasinglymotivatedtobeproactiveandcomprehensiveinmanagingtheirwater risksandnegativeimpacts,1seeinganumberofadvantagestodoingso,including:2

1. Ensuringthecompanyslegalandsociallicensetooperateinaspecificlocation

2. Preventingorreactingtooperationalcrisesresultingfromtheinadequateavailability,supply,orqualityofwaterorwater-dependentinputsinaspecificlocation

3. Gaininganadvantageovercompetitorsbecauseofstakeholderperceptionsthatthecompanyusesnaturalresourcesresponsiblyandhasaminimalnegativeimpactonpeopleandecosystems

4. Assuringinvestorsandmarketsthatbusinessoperationswillcontinuetobeprofitablebysecuringwateravailabilityforoperationsandreducingwater-relatedcosts

5. Upholdingcorporatevaluesbasedonsustainableandequitabledevelopmentbycontributingtothewell-beingofthebasins,ecosystems,andcommunitiesinwhichthecompanyoperates

1Unlessotherwisestatedthetermsimpactsandexternal impactsrefertothesignificanteconomic,environ-mentalandsocialeffects,bothpositiveandnegative,ofacompany,itsoperations,orproducts.

2Foranin-depthdiscussionofwater-relatedbusinessrisksandthebusinesscaseforsustainablecorporatewatermanagement,seetheofficialCEOWaterMandatewebsiteatceowatermandate.org.

9SECTION2AligningDisclosurewithCorporateWaterManagementPractices

Disclosuresupportsthesegoalsinavarietyofways.Manycompanieshavefoundthatthedisclosureprocessitselfimprovestheirinternalunderstandingofwater-relatedchallengesandcontributestothedevelopmentofeffectiveresponsestrategies.Forthosecompaniesthathavetakensignificantstepstomanagetheirwater-relatedrisksandnegativeimpacts,disclosureprovidesanopportunitytodemonstrateprogressandgoodpracticetobothinternalandexternalstakeholders.Thisinturnhelpscompaniesstrengthentheirbrandvalueandreputation,bolsterstalentrecruitment,andfostersincreasedinvestorconfidence.Corporatewaterdisclosurealsooffersavehicletoestablishadialoguebetweencompaniesandtheirstakeholders.

Showcasingprogressandarticulatingfuturetargetsandcommitmentsviadisclosure(whileallowingstakeholderstoprovidefeedbackontheseaspects)strengthenscorporateaccountabilityandbuildscredibilitywithemployees,localcommunities,civilsociety,andgovernments.Disclosurecanalsohelpcompaniesholdotherstakeholdersaccountableonwaterissues.Forexample,ifacompanycanshowthatithassignificantlyreduceditswaterdemand,ithasastrongerpositiontocallongovernmentstobettermanagewaterthroughoutabasininsteadoflettingthegovernmentassumethatthecompanysplantorsupplieristheproblem.Developingtrustandaccountabilitywiththesestakeholdersreinforcesacompanyslicensetooperateandservesasastartingpointforpartnershipsandcollectiveactioninsupportofsharedrisksandsustainablewatermanagement.

Water has been an important part of H&Ms sustainability work for many years. As part of this, our water disclosure work helped us to more accurately identify our compa-nys dependencies on water and the impact we have on freshwater ecosystems, and hence it helped us to address even more of the challenges and opportunities connected to water.

Helena Helmersson HeaD oF sustainaBilitY, H&m

Click here

The water-related interests of different stakeholder groups and potential disclo-

sure audiences


HOW DISCLOSURE FITS INTO CORPORATE WATER MANAGEMENT

Atypicalcorporatewatermanagementcyclefeaturesaseriesofpracticalstepsthatacompanyusesto

understanditsrelationshipwithwater,undertakeresponsestrategies,andeventuallycommunicate

bothtostakeholders.Understandingeachstepandthetypeofinformationgeneratedthroughthis

processallowsformoreeffectivereporting.Thissectiondescribeshowatypicalcorporatewater

managementcyclealignswiththeDisclosureFrameworkpresentedintheseGuidelines.

Thoughcorporatewatermanagementprocessesvaryfromcompanytocompany,theycanbe

generalizedasbeingiterativeandhavingthefollowingfundamentalsteps.Theprocessdepictedbelow

asanillustrativeexampleisderivedfromtheUNGlobalCompactManagementModel3andadaptedfor

water-relatedmanagement.

1. COMMIT. Committodrivesustainablewatermanagement.

2. ACCOuNT. Collectdataoninternalwaterperformanceandtheconditionofthebasinsinwhichthecompanyoperates.

3. ASSESS. UsethedatageneratedintheAccountphasetoidentifywater-relatedbusinessrisksandopportunitiesandnegativeimpacts.

4. DEfINE. Defineandrefinecorporatewaterpolicy,strategies,andperformancetargetsthatdriveperformanceimprovementsandaddressrisksandnegativeimpacts.

5. IMPlEMENT. Implementwaterstrategiesandpoliciesthroughoutthecompanyandacrossthecompanysvaluechain.

6. MONITOR. Monitorprogressandchangesinperformanceandbasinconditions.

7. COMMuNICATE. Communicateprogressandstrategiesandengagewithstakeholdersforcontinuousimprovementbymeansofcorporatewaterdisclosure.(Thisdocumentprovidesaframeworkandguidanceforconductingthisstepinaneffectiveandharmonizedmanner.)

Thisprocessissequentialanditerativeandmightbeconceptualizedasanupwardspiraldrivingamindsetofcontinuousimprovement.Italsoincludestwoongoingactionsthatreinforceeachofthesevensteps.First,acompanycontinuallyengageswithkeystakeholdersinordertobetterunderstanditswater-relatedrisksandimpactsandreceiveinputontheefficacyofitspoliciesandresponsestrategies.Second,acompanycontinuallyassessestherelevanceofvariouswater-relatedissuestounderstandnewtrendsandconditionsandidentifytheissuesofhighestpriorityforthebusinessanditsstakeholders.TheprocessofassessingrelevanceisdiscussedindetailinSection4.

Figure2showshowthismanagementcyclefitswiththeDisclosureFramework.

3UNGlobalCompact,UN Global Compact Management Model,2010.


FiGure 2: A Corporate Water Management Cycle and Its Relation to the Disclosure Framework

Current State Context Performance Compliance

Implications Business risks Business opportunities External impactsCross-cutting themes

Connections between sections and subsections Linkages across sustainability issues

Response Policies, governance and targets Internal actions External engagement

Communicate

Commit

Account

Assess Define

Implement

Monitor

Ongoing: Determine relevance Engage stakeholders

NOTE: The UNGC Management Models Measure step has been broken into two components: Measure and Monitor to align more closely with water-specific management processes

ThisgeneralmanagementcycleincludesallthepracticalandadministrativestepsneededtogeneratethedisclosurecontentdescribedintheDisclosureFramework.IntheAccountphase,companiesquan-tifytheirinternalperformance(e.g.,withdrawals,waterconsumption,waterdischarge)andseektounderstandbasinconditions(e.g.,wateravailability,water quality)tobetterunderstandthecurrentstateoftheirbusinesswithrespecttowater.IntheAssessphase,companiesinterpretthesedatatobet-terunderstandtheimplicationsforbusinessviability(i.e.,risksandopportunities)andthewell-beingofthepeopleandecosystemsthatthebusinesstouches(i.e.,whethertherearenegativeimpactsonbasinconditions).TheDefine,Implement,andMonitorphasesofthemanagementcyclecompriseaseriesofactionswherebycompaniesdevelop,operationalize,andevaluateresponseactions(corporatepoliciesandstrategies,internalactions,andexternalengagements)thataddresstheirwater-relatedrisksandnegativeimpacts.


THE LONG-TERM CORPORATE WATER MANAGEMENT MATURITY PROGRESSION

Whilethemanagementcycleofferedintheprevioussectiondescribesthevariouspracticalstepsthatcompaniesconductaspartoftheirbroadercorporatewatermanagementprocesses,itdoesnotspeaktohowwatermanagementpracticesevolveandmatureoverthelongterm.

Forexample,thosecompaniesjustbeginningtoprioritizewaterissuesoftenfocusonwatermeasurementandefficiencyprogramswithintheirdirectoperations.Thosewithadvancedwatermanagementprogramsmightaddressawiderarrayofwater-relatedissuessuchasacomprehensivecorporatewaterstrategy,valuechainmanagement,andengagementinsustainablewatermanagementactivitiesoutsidethecompanyfenceline.

Corporatewatermanagementcangenerallybecategorizedintothefollowingtypesofactivities:

ProvideWASHservicesintheworkplace4Providingandproperlymaintainingdrinkingwater,sanitation,andhygiene(WASH)servicesintheworkplacesupportsthehealthandwell-beingofacompanysworkers.

MeasureandmonitorwatermanagementpracticesAnotherearlystepiscontinuouslytrackingtheextenttowhichdirectoperationsuseandaffectwaterresources.Suchmeasurementallowsacompanytoidentifyfacilities(andspecificprocesseswithinfacilities)thatrequirepriorityactionandtogaugeprogress.

DriveoperationalefficiencyandreducepollutionAcompanycanbuildonitsunderstandingofitswatermanagementpracticesbyimplementingwaterefficiencyandpollutionreductionmeasuresthatimproveitsperformanceandbegintomanageitsrisksandnegativeimpacts.

4TheWorldBusinessCouncilforSustainableDevelopmentsWASHattheWorkplacewebsiteprovidesavarietyofresourcesthathelpcompa-niesensuretheyprovidesufficientWASHservicesintheiroperations.

Over the years, we have etablished a robust mechnism for annual water disclosure, which not only help us to abide with our comitment of transparency to the CEO Water Mandate but also enables us to identify gaps, explore possibili-ties of improvement and devise mechanisms for intra-company competi-tion to achieve water use efficiency.

aJit GulaBCHanD CHairman anD manaGinG DireCtor, HinDustan ConstruCtion CompanY

13

Identifyandunderstandwater-stressedandhigh-riskbasins Tofullyunderstandandaddressitsbusinessrisksandimpactsandproperlyprioritizeactionamongdifferentgeographicareas,acompanymusthaveafirmunderstandingofthecontextsinwhichitoperates.Inparticular,itidentifiesandinvestigatesthoseareasthatareexperiencingwater stressormightotherwisebeconsideredhigh-risk.Thisknowledgeistypicallygainedthroughinternaldatacollectionandassessmentandtheuseofthird-partydatasetsandtools.

IntegratewatermanagementintobusinessstrategyAnuancedunderstandingofriverbasinsandthecompanysownoperationswithinthempositionsacompanytobecomestrategicaboutdevelopingpoliciesandprogramstoaddressitstopwaterpriorities.Comprehensivestrategiesareintegrallylinkedtocorebusinessandlong-termbusinesssuccess.Strategydevelopmentcanincludemanydimensions,suchasestablishingcorporategovernanceandaccountabilitymechanisms,settinggoals,anddefiningawatermanagementphilosophy.

LeverageimprovedpracticesthroughoutthevaluechainMorematurecompanieslookbeyondtheirdirectoperationstoaddresswaterrisksandnegativeimpactsinthevaluechain.Inordertoaddressthoserisksandopportunities,acompanyassessesvaluechainexposuretowater risktoconsidertheimpactsitsproductsmayhaveonwaterresourcesandhowitssuppliersareaffectedbyandcontributetowater-relatedchallenges.Acompanythenusesitsinfluencetodriveimprovedpracticesthroughoutthevaluechain.

Advancesustainablewatermanagementandengageincollectiveaction5Acompanywiththemostadvancedwatermanagementpracticesmaylooktoengageexternallytoensurelong-termbusinesscontinuitybycontributingtothesustainablemanagementofsharedwaterresourcesonwhichthecompanyrelies.Suchplace-basedexternal

5TheCEOWaterMandates2010publicationGuide to Responsible Business Engagement with Water Policy offersdetailedguidanceonhowcompaniescanbestengagewithgovernmentsandotherstoadvancesustainablewatermanagement.

Water shortages and poor water quality can cause pro-duction shortfalls, price vol-atility, higher energy costs, regulatory action, competition and social unrest. Because of these material risks, Calvert expects companies we own to measure, mitigate and dis-close information about their water risks and water man-agement strategies. Corpo-rate water disclosure allows Calvert to assess how well a potential investment is posi-tioned for sustainable growth and responsible business and in turn, aides Calvert in offer-ing our investors responsible investment opportunities.

BarBara J. krumsiek, presiDent, Ceo, anD CHair oF CalVert inVestments, inC.


engagementoccursinavarietyofforms,rangingfrominformationsharing,tocommunityengagementandbasin-restorationprojects,toworkingwithlocalandregionalgovernmentstostrengthenthelocalwatermanagementcapacity.Inmostcases,thisrequirescollaborationwithotherorganizationsandactors(i.e.,collectiveaction),exposingthecompanytocomplexdependenciesandincreasedexpectations.

HOW DISCLOSURE FITS WITH CORPORATE WATER MANAGEMENT MATURITY

Ideally,companiesworktoadvanceallseventypesofwatermanagementactivitiesconcurrently.However,duetothecomplexityofaccountingforandmanagingwaterandthefactthatformanycompanieswaterhasonlyrecentlyemergedasahigh-prioritycorporatesustainabilityissue,manycompaniescurrentlypursueonlyoneortwoactivities.

Sincewatermanagementactivitiesdifferwithrespecttotimeandresourcecommitments,aswellaslevelofcomplexityanddifficulty,companiestendtopursuetheminasimilarorder(thoughthiscanvaryfromcompanytocompanywithinandamongindustrysectors).Forexample,improvedoperationalperformanceistypicallyaprerequisiteforeffectivecollectiveaction.

Thematurityofacompanyswatermanagementpracticeisdirectlyrelatedtothematurityandcomprehensivenessofitscorporate water disclosure.Asthecompanyexpandsitswatermanagementactivitiestoaddressawiderrangeofrisksandimpacts,thescopeofitsdisclosurepracticeexpandsaswell.Thus,ifacompanyidentifieswhereitresidesonthisprogression,italsogainsinsightintothetypesofinformationthatitisabletoreportrobustly,aswellashowitswatermanagementanddisclosurepracticemightexpandovertime.6Figure3showshowthetypesofmanagementactivitiesdescribedabovealignwithandlinktothevarioussubsectionsoftheDisclosureFramework.

6CDPprovidesaWaterReportingRoadmapthattracksthematurityofcorporatedisclosurerela-tivetoinformationbeingreported.

Click here

linking the Disclosure

framework to the Mandates

Six Elements


FiGure 3: Linking Corporate Water Management Maturity and the Disclosure Framework

Context

External impacts

Policies, governance &

targets

External engagement

Business risks

Performance

Internal actions

Compliance Business

opportunities

Business risksBus. opportunitiesExternal Impacts

(Value chain)

Internal actions(Value chain)

PerformanceCompliance (Value chain)

Provide WASH services in the

workplace

Identify and understand

water-stressedand high-risk basins

Integrate watermanagement intobusiness strategy

Leverage improvedperformance in the

value chain

Advance sustainablewater management

and collective action

Measure and monitorwater management

practices

Drive operationalefficiency and

reduce pollution

Through regular and open disclosure, common goals can be estab-lished for shared rewards. Molson Coors believes that disclosure around our water use is imperative in order to provide a collective understanding and approach to effective water stewardship in the communities where we operate. We continue to realize the direct benefits of disclosure, through risk reduction, cost savings and water quality improvements, and together with positive community engagement, education and outreach, water stakeholders within our brewing and supplier communities benefit.

peter sWinBurn, Ceo, molson Coors BreWinG CompanY


SECTION 3 Company Waterprofile

17SECTION3CompanyWaterProfile

SECTION 3 Company Water profile

AkeyaspectoftheDisclosureFrameworkistheCompanyWaterProfile,ahigh-leveloverviewofacompanyswaterissuesandmanagementefforts.Inessence,theprofileprovidesanexecutivesummarythat,duetoitsbrevity(oneortwopages),addscontextandmeaningtothewiderarrayofmoredetailedwater-relatedinformationthatthecompanyoffers.Profilesaredesignedtoofferasnapshotofwaterperformance,risks,impacts,andresponsestrategiesthatnontechnicalaudiencescaneasilyunderstand.Forsomecompanies,particularlySMEsorthoseforwhichwaterisonlymarginallysignificant,theprofilemayconstitutetheonlywater-relatedinformationdisclosed.

CompanyWaterProfileswillvarywithrespecttolengthandsophisticationdependingonthematurityofacompanyswatermanagement;however,aprofileshouldbebriefandincludethefollowingbasicinformationregardingthefollowingcomponents:

ThecompanysinteractionswithwaterCompaniesdescribegenerallyhowtheyutilizewaterresources(e.g.,theiroperationalusesforwater,thenatureoftheirwater discharge,theimportanceofwatertothevaluechain,thewateruseoftheirproducts).Ultimately,readersshouldcomeawaywithaclearideaofhowthecompanyutilizeswaterresourcesandwhyandtowhatextentwaterisimportantforbusinessviability.

ThecompanyswaterchallengesandopportunitiesCompaniesthenprovideahigh-leveldiscussionoftheopportunitiesandchallengesthatwaterposestothebusinessandtheextenttowhichwater-relatedissuesarerelevantforthecompanygenerally.Thisdiscussionsynthesizesinformationabouthowthecompanyuseswaterwithadiscussionofglobalwatertrendsandspecificbasinconditionsinordertoprovideanoverviewofthecompanyswater-relatedbusinessrisks,opportunities,andimpacts.

ThecompanyscommitmentandresponseAprofilecanalsosummarizethestepsthecompanyistakingtoaddresswater-relatedrisksandimpactsandtoseizewater-relatedopportunities.Suchasummarycantouchuponmanyissues,rangingfromahigh-levelcommitmenttowatersustainabilitytospecificcompanypoliciesandstrategies.Profileswillvarydependingonthematurityofthemanagementpractices.Somecompaniesmaychoosetosituatethematurityoftheirwatermanagementpracticewithinabroadercontinuumandarticulatehowtheyanticipatetheirstrategiesandprogramswillgrowandevolveovertime.

Click here

Example of an effective Company

Water Profile


ProfilemetricsthatprovideasummaryofcompanywidewaterperformanceandriskAprofileoffersachancetoprovideaquantitativesnapshotofcompanywidewater-relatedperformanceandrisk.Todoso,thecompanydemonstratesitsperformanceovertimewithrespecttotheprofilemetrics:

1) Totalandpercentageofwithdrawalslocatedinwater-stressedorwater-scarceareas2) Percentoffacilitieswithawater-relatedregulatorycompliance violation3) Percentoffacilitiesadheringtorelevantwater qualitystandards4) Averagewater intensityinwater-stressedorwater-scarceareas(asappropriate)7

Ideally,acompanywilldisplaynumerousyearsofdataforthesemetrics(inchartortabularformat)inordertodemonstrateperformanceovertime,usingabase yeartotrackprogress.Thearticulationoftargetsforoneormoreofthemetricscanalsoservetoreinforcerelevantpolicycommitmentsandstrategies.

ComparabilityInsomeinstances,itmaybeappropriatetomakecomparisonsofprofilemetricsandotherdataacrosscompanies,especiallyforcompanieswithinthesameindustrysector.However,companiesandtheirstakeholdersshouldbecautiouswhendoingso.Companyresultsmayvary,andthusnotbecomparablewiththoseofothercompanies,duetothedatasetsandtoolstheyusetoassessconceptssuchaswater stress.Furthermore,metricsrelatedtowaterintensity,thoughhelpfulfortrackingacompanysprogressovertime,maynotbefitforcomparisonacrosscompaniesduetodifferenttypesofproductsthatinherentlyrequiredifferentvolumesofwater.Otherreasonsprofilemetricsmaynotbecomparablebetweencompaniesisthattheydependonreport boundaries.Forexample,datafromaverticallyintegratedcompanyandacompanywhoseoperationspertaintoonlyonevaluechainsegmentarenotcomparable.TheseGuidelinessupporttheapproachtothereportingboundariesoutlinedintheGreenhouseGasProtocol,whichdoesnotspecifyasinglemethodologybutratherdescribestwocommonapproaches(operationalandorganizationalboundaries).8Thecredibilityofcomparisonsisenhancedwhenreporteddataareindependentlyverified.9

AlistofhotspotswhererisksandimpactsaremostlikelyLastly,profilesallowcompaniestoshedlightonthewater-stressedandhigh-risklocations(orhot spots)wheretheyaremostlikelytoexperiencewater risksorcreatenegativeimpacts.Ideally,acompanywillprovidealistofwater-stressed(orotherwisehigh-risk)basinswhereithasoperations.TheContextsubsectionofSection5offersguidanceonhowcompaniescanconductabasicassessmentofhotspots.

ACompanyWaterProfilecanserveseveralfunctionsandcanbepresentedinnumerousformats,includingthefollowing:

Theexecutivesummaryofawater-specificsustainabilityreport Awater-relatedsummaryinshortsustainabilityreports Apageinthecompanywebsite Partoftheannualreport

7Water-intensitymetricsmaynotbeusefulorappropriateforallcompaniesandindustrysectors.

8WorldResourcesInstitute(WRI)andWorldBusinessCouncilonSustainableDevelopment(WBCSD),The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard,rev.ed.,2004.

9TheEuropeanUnionsGuidance for the implementation of the EU Organisation Environmental Footprint (OEF) during the Environmental Footprint (EF) Pilot Phaseprovidesfurtherinstructionfordataverificationandhowitcanbeappliedforcomparabilitypurposes.

Click here

Guidance on How to Measure and Re-port Profile Metrics

19SECTION3CompanyWaterProfile

SECTION 4 Defining What to report


SECTION 4 Defining What to report

Companiescanreportonavastrangeofsustainabilitytopics(useofwater,energy,andland;waste;greenhousegasemissions,andsoon).Evenwithintherealmofwater,numerousissuesaffect,andareaffectedby,companiestovaryingdegrees,dependingonthegeographiclocation,industrysector,andothercircumstances.Tobeeffectiveinitsreporting,acompanymustdeterminewhichwater-relatedtopics(e.g.,water scarcity,poorambientwater quality,inadequateaccesstodrinkingwaterorsanitation,flooding)aremostimportanttoitsstakeholders,whichtopicshave(ormayhave)significantimpactsonpeopleandecosystems,andwhichhavethepotentialtogeneraterisksoropportunitiesforthebusiness.

Thissectionprovidesguidanceonhowacompanycandefinewhichwater-relatedtopicsandinformationitshoulddisclose,aswellashowitcaneffectivelycommunicatethisprocessanditsoutcomes.

RELEVANCE AND MATERIALITY: WHAT ARE THEY?10

Insustainabilityreporting,materialityiscommonlythoughtofasathresholdatwhichcertainsustainabilitytopicsbecomerelevantenoughforacompanytoreporton.TheGlobalReportingInitiative(GRI)definesmaterialtopicsasthosethat:

Reflectthecompanyssignificanteconomic,environmentalandsocialimpactsor

Substantivelyinfluencetheassessmentsanddecisionsofstakeholders (suchasemployees,investors,suppliers,localcommunities,governments,investors,orconsumers)

Thesematerialtopicsoftenhaveasignificantfinancialimpactintheshorttermorlongtermonacompany.Theyarethereforealsorelevantforstakeholderswhofocusstrictlyonthefinancialconditionofacompany.

Materialityandrelevanceareoftenusedinterchangeably.However,theyaretwodistincttermswhosesubtledifferencesarecriticaltocompaniesseekingtodefinewhichcontenttoreport:

Relevanttopicsarethosethatmayreasonablybeconsideredimportantforreflectingthecompanyseconomic,environmentalandsocialimpacts,orinfluencingthedecisionsofstakeholders.Theythereforepotentially,butnotnecessarily,meritdisclosure.

Materialtopicsarethesubsetofrelevanttopicsthatareultimatelydeterminedtobesufficientlysignificanttoreporton.

Bothterms,withinthecontextofsustainabilityreporting,inherentlyrequiresomesubjectivejudgments.Reportingcompaniesshouldbetransparentaboutthesejudgments.

10Formoredetailedguidanceondefiningreportcontentforasustainabilityreport,seetheGlobalReportingIni-tiative(GRI)SustainabilityReportingGuidelines(G4)(pages31-40oftheG4 Implementation Manual).GuidanceinthissectionisdrawnheavilyfromtheprocessoutlinedintheG4Guidelines.

21SECTION4DefiningWhattoReport

ASSESSING RELEVANCE AND MATERIALITY FOR WATER- RELATED TOPICS

Theprocessofdeterminingacompanysmaterialwater-relatedtopics,andtherebydefiningwhichwater-relatedinformationshouldbereported,hasthreekeysteps:

1) Identifyingalistofrelevantwater-relatedtopicsbasedonthecompanysrisks,opportunities,andimpactsonpeopleandecosystems,andinwhatlocationsinthecompanyandinthevaluechainthesetopicsarerelevant

2) Prioritizingtherelevantwater-relatedtopicsbasedonanassessmentofthesignificanceoftherisks,opportunities,andimpactstheyposeandtheviewsexpressedbystakeholders

3) Validatingtheoutcomesofthematerialityassessment

Inaddition,acompanyreviewsitsmaterialityassessmentaspartofeveryreportingandmanagementcycle.Thiswillhelpitcaptureongoingchangesinglobalwaterchallenges,specificbasinconditions,stakeholderexpectationsandpriorities,andhowandwherethecompanyoperates.

Thisprocessisunderpinnedbyanongoingstakeholderengagementthatallowsthecompanytoidentifyemergingwater-relatedtopicsandtobetterunderstanditswater-relatedrisks,opportunities,andimpacts.Acompanymaywishtointegratewaterintoitsbroadermaterialityassessmentforsustainabilitytopicsorundertakeanin-depthmaterialityassessmentfocusedspecificallyonwater-relatedtopics.Whichevermethodisused,acompanyshouldensurethatitdoesnotassesswaterinisolationfromothersustainabilitytopics,becauseitmayfailtoidentifyrelevantlinkagesandtrade-offsbetweenwaterandothersustainabilityissues.TheGRIG4Guidelinesdescribeagenericprocessfordefiningacompanyssetofmaterialsustainabilitytopicstobemanagedandreported.

STEP1:IDENTIFyINGRELEVANTWATER-RELATEDTOPICS

1.1 Determining reporting boundaries for water

Asafirststep,acompanydeterminestherangeofentitiestobeincludedintherelevanceandmaterialityassessment.Basicdisclosersprovideinformationfortheentitiestheyownorcontrol(thosetypicallyincludedinitsconsolidatedfinancialstatements,suchassubsidiariesorjointventures).Advancedwaterdisclosers,inadditionandseparately,provideinformationforoutsideentitiesinthevaluechain(e.g.suppliers)wheretherearesignificantrisks,opportunities,orimpacts.

Thereareseveralmethodologiesavailablefordefiningtheboundaryofatopicforreportingpurposes,notablythosesuggestedbytheGHGProtocolandtheGRIG4Guidelines.


1.2 Assessing whether water is a relevant sustainability topic

Next,companiesassesswhetherwaterisgenerallyarelevantsustainabilitytopic.Companiestypicallyconsiderthegeneralexposureoftheirindustrysectortowater-relatedrisksandthelikelihoodthattheywillcreatenegativewater-relatedimpacts.Thentheyassesstheriskexposureandlikelihoodofcreatingnegativeimpactsinthespecificbasinsinwhichtheyoperate.11Table1,thoughlikelynotcomprehensive,offersanoverviewofindustrysectorstypicallyexposedtosignificantwater-relatedbusinessrisksduetothenatureoftheirwateruse.

taBle 1: Industry Sectors with High and Medium Exposure to Water-Related Risks

Agriculture

Beverage producers

Biomass power production

Chemicals

Clothing & apparel

Electric power production

Food producers

Food retailers

Forestry & paper

Freshwater fishing & aquaculture

Hydropower production

Mining

Oil & gas

Pharmaceuticals & biotech

Technology hardware & equipment, semiconductors

Water utilities and services

Construction & materials

Gas distribution & multi-utilities

Manufacturing of industrialhousehold goods, home construction, leisure goods

Media (printed)

Real estate (asset owners)

Transportation

Travel & leisure

HIGH PRIORITY MEDIUM PRIORITY

Source:Ceres.TheCeresAquaGauge:AFrameworkfor21stCenturyWaterRiskManagement,2011.

11Avarietyoftoolsareavailableforsuchanassessment.TheCeresAquaGaugefeaturesalistofhigh-andmedi-um-riskbasins,whiletheWBCSDGlobalWaterTool,WWF-DEGWaterRiskFilter,andWRIAqueductWaterRiskAt-lasalloffermethodsbywhichcompaniescanassesswaterstressandwaterriskatahigh-level.TheGEMILocalWaterToolandWFNWaterFootprintAssessmentTooloffermoregranularassessmentsofwaterstress.Moreinformationonallofthesetoolscanbefoundinontheweb-basedversionoftheGuidelines.


Afterthishigh-levelassessmentofwater risksbasedonindustrysectorandbasinconditions,companiescanlocatethemselvesonthematrixinFigure4.

FiGure 4: Measuring Relative Exposure to Water Risk and Impacts

Low Medium High

SECTOR

BASIN

High

Medium

Low

CompaniesthatfallintheredareaswillbenefitfrommanagingwaterinarobustmannerandreportingonwaterinadetailedmannerasdescribedinSection5oftheseGuidelines.Thosethatfallintheorangeareaswillcertainlywanttoconsidertheirwater-relatedchallengesandseek,ataminimum,toprioritizereportingtheinformationdescribedinSection3:CompanyWaterProfile.

Acompanymayalsoassesswaterasarelevanttopicifithasidentifiedopportunitiestodrivepositivebusinessvalueorgeneratepositivewater-relatedimpactsforpeopleandecosystems.

1.3 Identifying specific water-related topics to report

Reportingcompaniesthenseektodeterminewhichspecificwater-relatedtopicsareofparticularrelevancebyassessingthecompanyswater-relatedrisks,opportunities,andimpactsonpeopleandecosystems.Atthislevelofassessment,acompanyconsidersatleastthefollowingbroadconsiderations:

ItsimpactsonwaterresourcesandaccesstoWASHservices

Businessrisksstemmingfrombasinconditions(e.g.,waterscarcity,pollution,regulatoryuncertainty,etc.)

Opportunitiestocontributetosustainablewatermanagement

Opportunitiestoadapttoensuingchangesinbasinconditions(e.g.,climatechangeorlanduse)andplannedchangesinpoliciesandregulatoryframeworks


Potentialglobal-,regional-,andbasin-levelwater-relatedtopicsthatmightbeconsideredpartoftheidentificationstepinclude,butarenotlimitedto:

Waterscarcityandwaterstress

Poorambientwater quality

Regulatoryuncertainty

Insufficientinfrastructure

InadequateaccesstowaterandWASHservices

Drought

Flooding

Climatechange

Changingdemographics

Limitedmanagementcapacity

Ecosystemvulnerability

Totalbasinavailability

Supplyvariability

Culturalandreligiousvalues

Mediaawareness

STEP2:PRIORITIZINGRELEVANTWATER-RELATEDTOPICS

InStep2,acompanyprioritizesthewater-relatedtopicsidentifiedinStep1todevelopalistofmaterialtopicstobereported.Fundamentaltothisstepisassessingthesignificanceoftherisks,opportunities,andimpactsassociatedwiththetopicsidentifiedinStep1.Next,thecompanymustdeterminetheinfluencethatthesetopicsmayhaveonstakeholdersassessmentsanddecisions.Dependingontheirsignificance,topicsareconsideredmaterialregardlessofthecompanysabilitytoeffectivelymanagethem.

Whenassessingthesignificance of the risks, opportunities, and impacts associatedwithaspecificwater-relatedtopictothebusinessitselfandtosustainabledevelopmentgenerally,acompanyasksthefollowingquestions:12

Whatisthelikelihoodandseverityoftheimpacts?

Doesthistopiccompromisethecompanyslicensetooperateinaspecificlocation?

Mightthistrendorconditioneventuallydisruptthecompanysoperationsoritsvaluechain?

Isthereanopportunitytogaincompetitiveadvantagethroughactioninthisarea?

Mightactioninthisareafurtherassureinvestorsandmarketsthatbusinessoperationswillcontinuetobeprofitable?

Doesthistopiccompromisethecompanysabilitytoupholditsownvaluesandethics?

12Formoreguidanceonanalyzingthesignificanceofacompanysimpactsrelatedtoatopic,seetheGRIG4Guidelines(pages3637oftheG4 Implementation Manual).


Whenassessingaspecificwater-relatedtopicsinfluence on stakeholder assessments and decisions,thecompanyproactivelyengageswithstakeholderssothattheycanarticulatetheirinterestsandvalues,theirperceptionsofthecompanysimpactonthatstakeholdergroup,ortheirexpectationsregardingthecompanysresponsetothattopic.13

Aftercompletingthistwofoldanalysis,acompanycanthendeterminewhichspecificwater-relatedtopicsarematerial.ThematrixinFigure5maybeusefultovisuallyrepresentthesignificanceofeachtopic.Acompanyplotswater-relatedtopicsrelativetooneanotherwithrespecttothesignificanceoftherisks,opportunities,andimpactsandtheirinfluenceonstakeholderassessmentsanddecisions.Then,inordertodeterminewhichspecificwater-relatedtopicsarematerial,acompanydefinesthethresholdsandunderlyingcriteria(depictedbytheredlineintheexampleinFigure5)thatrenderatopicmaterial.Topicsthatexceedthesignificancethresholdsetbythecompanyarematerial.Atopicdoesnothavetobehighlysignificantinbothviewpointstobedeemedmaterial.Highsignificancewithinoneviewpointismoreimportantthanconvergencebetweenthedifferentviewpoints.

FiGure 5: Visual Example of Prioritization of Topics

Significance of the risks, opportunities, and impacts

Significance

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Onceacompanyhasidentifieditsmaterialwater-relatedtopics,itthendeterminesthelevelofreportingcoverageeachoneshouldreceive.Thisreferstotheprominence,amountofdata,andnarrativeexplanationdisclosedforeachmaterialtopic.

13Formoreguidanceonanalyzingtheinfluenceonstakeholderassessmentsanddecisionsofasustain-abilitytopic,seetheGlobalReportingInitiative(GRI)G4Guidelines(page36oftheG4 Implementation Manual).


STEP3:VALIDATINGTHEOUTCOMESOFTHEMATERIALITyASSESSMENT

Inthethirdstep,thecompanyensuresthatthefinalselectionofmaterialwater-relatedtopicsprovidesareasonableandbalancedrepresentationofthecompanyssignificantwater-relatedrisks,opportunities,andimpacts.Todoso,thecompanyassessestheproposedlistofmaterialwater-relatedtopicsagainst:

ScopeAreallsignificantwater-relatedrisks,opportunities,andimpactscovered?

BoundaryHasthecompanyconsideredsignificantrisks,opportunities,andimpactsinentitiesbothwithinthecompanyandthroughoutitsvaluechain?

TimeDoestheselectedinformationcovertheentirereporting period?

STEP4:REVIEW

Asthecompanyispreparingforitsnextreportingandmanagementcycle,itreviewsitsmaterialityassessmentinordertocaptureongoingchangesinglobalwaterchallenges,specificbasinconditions,stakeholderexpectationsandpriorities,andhowandwherethecompanyoperates.

COMMUNICATING THE PROCESS FOR DEFINING WHAT TO REPORT

Providingadescriptionofthematerialityassessmentprocessitselfallowsreaderstobetterunderstandandevaluatewhetherthecompanyismanagingandreportingthemostimportantwater-relatedtopics.Reportingwater-relatedmaterialityassessmentscomprisesthreemaincomponents:

Howimportantwateristothecompany(relativetoothersustainabilitytopics)

Howwater-relatedtopicshavebeenprioritized

Howstakeholderengagementinformedthematerialityassessmentprocess

REPORTINGHOWIMPORTANTWATERISTOTHECOMPANy

ThematrixprovidedinFigure3isausefultoolforillustratingtheimportanceofwatertothebusiness.Thematrixcanbesupplementedbyadescriptionoftheindustrysrelativeexposuretowater-relatedrisks.Itcanalsoprovideadiscussionofanywaterchallengesfacingtheregionsinwhichthecompany(oranyotherentitiesincludedwithinthereportingboundary)hasoperations.

ThematrixinFigure4canalsobeusedtodepictthecompanysoverallmaterialityassessmentforsustainabilitytopicsandtoshowhowimportantwateristothecompanyrelativetoothersustainabilitytopics.14

14SeetheGRIG4Guidelines(page37oftheG4ImplementationManual).


REPORTINGHOWWATER-RELATEDTOPICSHAVEBEENPRIORITIZED

Next,acompanyindicateswhichspecificwater-relatedtopicsweredeemedmaterialandwhichofthosearemostimportant.Todoso,thecompanymaychoosetopublishthematrixshowninFigure4.Thismatrixprovidesavisualrepresentationofhowwater-relatedtopicshavebeenassessedbasedonthesignificanceoftheirrisks,opportunities,andimpacts,andtheirinfluenceonstakeholderassessmentsanddecisions.

Inaddition,thecompanycanprovideatable(foranexampleseeTable2)thatliststhematerialwater-relatedtopics,inorderofreportingpriority,andbrieflydescribe:

1) Thecompanyentities(e.g.,subsidiaries,jointventures)orentitiesinthevaluechain(e.g.,suppliers)thatfacesignificantrisks,opportunities,orimpactsrelatedtothetopic

2) Thegeographicorgeopoliticalarea(s)wherethetopicinquestionismaterial3) Thesignificantrisks,opportunities,andimpactsrelatedtothetopic4) Stakeholdersforwhomthetopicisimportant5) Theextenttowhichthecompanycaninfluencetherisks,opportunities,andimpacts

relatedtothetopic6) Wherethetopicisreported(e.g.,aspecificpageinthecompanyssustainabilityreportor

onitswebsite)

taBle 2: Example of Material Topics List

Material Topic

Company or Value Chain

Entities

Geographic/ Geopolitical

Area(s)

Risks, Opportunities, Impacts Related to

the Topic

Stakeholder Interest

Companys Ability to Influence

Reporting Location

Thoughallmaterialtopicsshouldbereportedregardlessofwhetherthecompanyisactivelymanagingthem,companiesarelikelytoreportmoredetailedinformationfortopicstowhichtheyareactivelyresponding.Forexample,acompanymaydeembothwater scarcityandlimitedmanagementcapacityasmaterialtopics,butbemoreequippedtoaddresswaterscarcity.Inthiscase,thecompanywouldreportbothtopicsasmaterial,butaddresswaterscarcity(anditsassociatedresponses)inmoredetail.TheCorporateWaterManagementMaturityProgression(seeFigure3)isahelpfultoolinidentifyingandcommunicatingwhichtopicsthecompanymaybemostequippedtomanageandreportindetail.Atthesametime,theMaturityProgressionoffersinsightintowhatadditionalmanagementpracticesthecompanycanimplementinthenextreportingcycletobetteraddressmaterialtopicsitiscurrentlynotequippedtomanageandreportrobustly.

Company Information Here


Reportingthematerialityassessmentprocessisinherentlylinkedtoreportingsignificant

risks,opportunities,andimpacts,asdescribedintheImplicationsdiscussioninSection5of

theseGuidelines.InSection4,thecompanyreportstheprocessfordeterminingrelevance

andmaterialityandprovidesahigh-leveldescriptionofthesignificantrisks,opportunities,and

impactsrelatedtoeachmaterialtopic.InSection5,thecompanydescribesin detailthenature

ofthesignificantrisks,opportunities,andimpactsidentifiedinthematerialityassessment.

REPORTINGHOWSTAKEHOLDERENGAGEMENTINFORMEDTHEMATE-RIALITyASSESSMENT

Finally,acompanyexplainshowitengagedstakeholderstosupportthemateriality

assessmentprocess.Specifically,thecompanydescribeswhichspecificstakeholdergroups

wereengaged,howthiswasdone(e.g.,throughlocalwaterforums,unsolicitedmessages,

workinggroups,etc.),andwhatthekeyoutcomesofthatengagementwereandhow

thecompanyaddressedthem.Thecompanycanalsoreportthelessonslearnedandthe

stakeholderengagementplanforthenextreportingcycle.


SECTION 5 Detailed Disclosure


SECTION 5 Detailed Disclosure

UNDERSTANDING AND LINKING COMPONENTS OF THE FRAMEWORK

ThissectionprovidesguidanceontheDetailedDisclosurepillaroftheDisclosureFramework.Thispillarcomprisesthe11informationareasthatshouldideallybeaddressedinacompanyswaterdisclosure.Theframeworkisnotintendedtoindicatewhatelementsofcorporatewatermanagementanddisclosurearemostimportantortheorderinwhichcompaniesshouldaddressthem.Rather,itoffersawaytocategorizeandunderstandthemanytypesofwater-relatedinformationthatcompaniesreport.

FiGure 6: Corporate Water Disclosure Framework

DETAILED DISCLOSURE

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BASICANDADVANCEDREPORTING

Theguidanceprovidedinthissectionisdividedintobasicandadvancedpractices.Whilebasicpracticeprovidesagoodstartingpointforcompanieswithlimitedexperienceinwatermanagement,advancedpracticerepresentsthefullrangeofinformationthatcompaniesideallyreport.However,somecompanies,dependingontheirsizeandtheimportanceofwatertothebusinessandstakeholders,maynotdeemitnecessaryorvaluabletoimplementthisfullrangeofpractices.

Advancedpracticesareinclusiveofbasicpractices.Inotherwords,advancedreportersdisclosepracticeslistedinbothbasicandadvancedcategories.Somecompanies,particularlySMEsorthoseforwhichwaterisonlymarginallysignificant,mayopttofocusonreportingtheinformationsuggestedforCompanyWaterProfiles(seeSection3),anddisregardbasicandadvancedpracticesaltogether.Infact,somebasicpracticesareincludedasProfileMetricsinSection3:CompanyWaterProfile.Table3summarizesthebasicandadvanceddisclosurepracticesdiscussedinthissection.

Click here

Compilation of Connected

Reporting Tables

31SECTION5DetailedDisclosure

taBle 3: Summary of Basic and Advanced Reporting Practices

SUBSECTION BASIC ADVANCED

CuRRENT STA

TE

ContextHigh-levelassessmentofbasins

acrossaportfolio

Detailed,location-specificassessmentofbasinswherewaterchallengesarepronounced

High-levelassessmentofbasinsinwhichkeyvaluechainactorsarelocated

Performance

Totalandpercentageofwithdrawalsinwater-stressedorwater-scarceareas

Percentoffacilitiesadheringtorelevantwaterqualitystandards

Averagewaterintensityinwater-stressedorwater-scarceareas(asappropriate)

PercentoffacilitieswithfullyfunctioningWASHservicesforallworkers

Location-specificperformancedata:

- Waterwithdrawalsbysourcetype

- Waterintensity

- Waterconsumption

- Waterdischargebydestinationtype

- Waterperformanceinthevaluechain

Compliance Percentoffacilitieswithawater-

relatedregulatorycomplianceviolation

Adoptionofinternaland/orvoluntarysustainabilitystandards

Water-relatedregulatorycomplianceviolationsinthevaluechain

IMPlICATIONS

Business risksHigh-levelassessmentofrisksata

portfoliolevel

Detailedassessmentofrisksbasedonextensive,location-specificanalysisatthefacilitylevel

Valuechainrisks


High-levelassessmentofopportunities

Detailedassessmentofopportunities

Valuechainopportunities

External impacts

N/A(legalcomplianceusedasproxy)

Impactsonwateravailability,waterquality,andaccesstowaterresourcesandWASHservices(includinghuman-rights-relatedimpacts)

Prioritizingimpacts

RESPONSE

Policies, governance, and targets

Commitmenttowaterstewardshipandhumanrightstowaterandsanitation

Goalsandtargets

Policies,strategies,andgovernance

Respectingthehumanrightstowaterandsanitation

Internal actions Improvementsindirectoperations Productinnovation

Valuechainprioritization,engagement,andimprovements

External engagement

Participationinglobalinitiatives

Consumer/publicengagementandawarenessbuilding

Policyadvocacy

Place-basedcollectiveaction


GEOGRAPHIC/GEOPOLITICALSCALEOFREPORTING

ManyaspectsofDetailedDisclosurecallforcompaniestoreportactions,risks,impacts,etc.,forspecificgeographicorgeopoliticalregions,asopposedtotheirglobaloperations.Forexample,acompanymightreportthatitfaceswater risk duetoineffectivewatergovernanceinaspecificcountry,orperhapsdiscussthewateruseefficiencyofallitsfacilitiesinaspecificriverbasin.Themostappropriateandhelpfulscaleforaregiondependsonavarietyoffactors,includingtheavailabilityofdata,theintendedaudience,andthenatureofthechallengefacedoractionimplemented.Belowisalistgeographicandgeopoliticalscalesatwhichwater-relatedinformationcanbereportedandadescriptionofwheneachmightbemostappropriateanduseful.

River basins.Companiesattimesreportattheriver basinlevelwhenawater-relatedchallengeoractionisinresponsetohydrologicalorenvironmentalissuesthatfaceanentireriverbasin.InAppendixC,wedescribeandprovidealinktoaninteractivedatabasethatofferscommonnomenclatureandboundarydelineationsfortheworldsriverbasins.

Subbasins. Sincewater-relatedchallengescanvarywidelyacrossentireriverbasis,themostinsightfulwater-relatedreportingaggregatesdatabysubbasin.Suchgranularreportingallowsaudiencestounderstandwherespecificallythemostaccuratewater-relatedchallengesareoccurringandhowresponsescanandshouldvaryindifferentpartsofoneriverbasin.

Aquifers. Attimes,water-relatedchallengesandresponsesarefocusedaroundgroundwatersourcesratherthansurface water.Intheseinstances,companiesmaywanttoreportusingaquiferboundariesasopposedtoriverbasins.

Geopolitical. Companiescanalsoreportwater-relatedinformationaroundnationalboundaries.Thisisparticularlysalientwhenwater-relatedchallengesareduetogovernanceissuesorpoliticalconflict.Reportingcanalsobedoneatthestate,province,ormunicipalitylevels.

CONNECTIONSBETWEENSECTIONSANDSUBSECTIONS

Oneofthemostimportantaspectsofeffectivewaterdisclosurerelatestoacompanysabilitytomakeconnectionsamongtheinformationareas(thesectionsandsubsections)withintheDisclosureFramework.Insomeinstancestheconnectionsareinherentandaremadeautomatically.Forinstance,itisnotpossibleforacompanytomeaningfullyconveybusinessrisksoropportunitieswithoutlinkingbacktothecompanyswaterperformanceandoperatingcontext.Inotherinstances,makingtheconnectionsaddsrelevanceandmeaningtotheinformationprovided.Forinstance,responsestrategiesshouldexplicitlyaddressthewater-relatedrisks,impacts,andopportunitiesthecompanyhasidentifiedasmaterial.

Throughoutthissection,tableslabeledConnected Reportingprovideexamplesofhowacompanymightdemonstratehowdifferenttypesofwater-relatedinformationrelatetooneanother.

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Click here

Interactive Database of the Worlds River

Basins


LINKAGESACROSSSUSTAINABILITyISSUES15

Thoughpracticeinthisareaisquitenascent,companiesalsoendeavortoconsiderandreportthelinkagesbetweenwaterandothersustainabilitytopics,suchasfoodproduction,energyuse,landuse,andclimatechange.Figure5highlightssomeofthesecorelinkages.

FiGure 7: The Water-Energy-Food Nexus

15ResourcesforlearningmoreabouttheseimportantlinkagesincludetheGermangovernmentsWater,Energy,andFoodSecurityResourcePlatform,theWorldEconomicForumsWaterSecurity:TheWater-Energy-Food-ClimateNexusreport,WorldBanksThirstyEnergy,andtheInternationalInstituteforSustainableDevelopmentsreportTheWaterEnergyFoodSecurityNexus:TowardsaPracticalPlanningandDecision-SupportFrameworkforLandscapeInvestmentandRiskManagement.

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examples of linkages and trade-offs across sustainability issuesLinkagesandtrade-offsacrosssustainabilityissuespotentiallyaffecteachofthethreemajorsectionsofDetailedDisclosure.Examplesofthepossiblewater-relatedlinkagesandtrade-offscompaniescanreport,dependingontheirrelevancetothecompanyanditsstakeholders,areasfollows:

1. Current statethe extent to which water-related challenges contribute to other corporate sustainability issues, including: ThewaterusedtogenerateenergyonwhichthecompanyreliesWastewaterdischargeresultingfromthegenerationofenergyonwhichthecompanyrelies

2. Implicationshow other sustainability challenges may affect the companys ap-proach to water management and corporate risk assessment, including:ThepotentialeffectsofdroughtonacompanysaccesstoenergyThepotentialeffectsoflandusedecisions(e.g.,deforestation,agriculturalpractices)onrunoffandthereforethecompanysaccesstowaterThepotentialeffectsofupstreamagriculturalrunoffonthecompanysaccesstocleanwater

3. Responsethe suitability and value of water-related response strategies (depending on the extent to which they create undesirable trade-offs):TheenergyrequirementsandgreenhousegasemissionsofwastewatertreatmentandwaterrecyclingsystemsThewateruseimplicationsofdifferentcropsandcropvarietiesTheenergyimplicationsofdifferentirrigationoptionsThewateruseimplicationsofalternativeenergysources

Theabovelistrepresentsexamplesoflinkagesthatcompaniesmightreport.Formanycompanies,reportingthisfullrangeoflinkagesisneitherpossiblenorappropriate.

Ataminimum,audiencesshouldunderstandhowwaterisinextricablylinkedtotheseotherchallengesandhowcompaniesmustconsiderwatermanagementinthecontextofothersustainabilityissues.Morerobustreportingmightincludeadescriptionoftheeffectsofsuchlinkagesonwater-relatedbusinessrisksandhowconsiderationsrelatedtosustainabilitytrade-offs16informspecificcorporatestrategies.

16PwCsTotalImpactMeasurementandManagementframeworkincorporatesnonfinancialconsiderationsintobusi-nessdecisionswhilemodelingtheinherenttrade-offsbetweendifferenttechnologiesandmanagementstrategies.


ASSESSING THE CURRENT STATE

Thissectiondescribestheinformationthatcompaniescanusetoassessandreportthecurrentstateoftheirwatermanagement.Thisinformationspansthreecategories:context,performance,andcompliance.Unlessclearlynotedotherwise,CurrentStatedatashouldbeconsistentwiththereporting periodoftheoveralldisclosuredocument.Companiesalsoconsiderreportinghistoricdatasoastobuildanunderstandingofhowthesituationhaschangedovertime.Disclosingatleastthreeyearsofhistoricdataisnecessarytoallowdisclosureaudiencestomeaningfullyassesstrends.


OVERVIEW

Waterisauniquelycomplicatedresourceforcompaniestomanageandreportbecauseitsvalue,availability,andqualityvarysignificantlydependingonlocation.Acriticalcomponentofthewaterdisclosureprocessisassessingandreportinghowlocation-specificfactorsrelatetothebusinessanditsstakeholders.

Water scarcityandwater stressarethemostcommoncontextualfactorsusedtomeasureacompanyssusceptibilitytowater-relatedbusinessrisksaswellasthelikelihoodofitscreatingnegativeimpactsinaspecificlocation.Thoughavarietyofdefinitionsexist,withinthecontextofcorporatewaterstewardship,17water scarcity referstothevolumetricabundance,orlackthereof,offreshwaterresources.Water stress referstotheability,orlackthereof,tomeetthehumanandecologicaldemandforfreshwater.Stresscomprisesthreeprimarycomponents:availability,quality,andaccessibility.

Thissectionoffersinsightandresourcesforhowacompanycanassesswater-relatedbasinconditionsandreportthedegreetowhichitoperatesinwater-stressedorhigh-riskareas.Italsodescribesavarietyofcontextualfactorsandbasinconditionsthatcanexposeacompanytowater risksorincreasethelikelihoodofnegativeimpacts.

Thetablebelowprovidesasummaryofinformationcollectedandassessedatbasicandadvancedlevelsofdisclosurepractice.EachinformationareadiscussedinSection5featuresatablesimilartotheoneonthenextpage.

CONTENT SCOPE FORMAT

Basic Profile metric: High-levelassessmentof

basinsacrossaportfolioCompanywide

Tabularandnarrative;quantitative

Advanced (includesbasic

reporting)

Detailed,location-specificassessmentofbasinswherewaterchallengesarepronounced

Location-specific Tabular;quantitative

High-levelassessmentofbasinsinwhichkeyvaluechainactorsarelocated

Valuechain Narrative;quantitative

17AspartofthedevelopmentoftheseGuidelines,theMandateSecretariatcollaboratedwithseveralotherorganiza-tionswithexpertiseincorporatewaterstewardshiptodevelopasharedunderstandingofthetermswater scarcity,water stress,water risk,andwater risk for businesswithinthecontextofcorporatewaterstewardship.AppendixBsummarizestheinitialoutcomesofthisongoingcollaborativeprocess.

ConteXt

DETAILED DISCLOSURE

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BASIC

High-level assessment of basins across a portfolioBasicreportersassessatahighleveltheextenttowhichtheiroperationsarelocatedinwater-stressedorhigh-riskregions.ThisinformationservesasakeycomponentformanyofthecompanywidemetricsdescribedintheensuingPerformancesection.Suchanassessmentalsohelpscompaniesidentifyandreportwater-relatedhot spotswheresustainablewatermanagementpracticesmaybeprioritized.

Manycompaniesusetheirowninternalknowledgeofthebasinswheretheyoperatetoassesshotspots.Therearealsoanumberofexternaldatasetsthatcanassistcompaniesinthisprocess.Manyareaccessibleandrelevanteventocompanieswithquitelimitedwatermanagementpracticesandwater-relateddata.Somecompaniesmakeuseofthesedatasetstomakethesecalculationsthemselves.Othersusefreeweb-basedtoolsthatusethesedatasetstoconductthesecalculationsforthem;theseinclude

WBCSDGlobalWaterTool

WRIAqueductWaterRiskAtlas

WWF-DEGWaterRiskFilter(QuickView)

WFNWaterFootprintAssessmentTool

Whenreportingonthistopic,companiesshouldindicatethespecifictoolormethodologytheyused.

ForD: sustainaBilitY 2012/13

Ford used the Global Water Tool developed by the World Business Council for Sustainable Development (WBCSD) to evaluate which of our operations are projected to be in water-scarce regions by 2025. According to the analysis, approximately 26 percent of our operations are projected to be in such regions (defined as areas of extreme scarcity or scarcity).

Our facilities in Mexico are located in water-stressed regions; our manufacturing facility in Cuautitlan, Mexico, for example, is already subject to water-withdrawal limitations. Several of our facilities in our Asia Pacific and Africa region are in areas that are currently water-stressed, or are expected to be in the near future.

Click here

Overview of assessment tools

and their underlying methodologies

38

ADVANCED

Whereasbasicpracticehelpsdeterminewhichbasinsarehot spots,advancedpracticepertainstotheassessmentofandreportingontheconditionsinspecificbasins,especiallyhotspots,tobetterunderstandwhattypesofresponsestrategiesaremoststrategicforeachlocation.Aspartofthisprocess,companiesconsiderawiderangeoffactorsincludingbutnotlimitedtowaterstressthathavebearingontheirexposuretoriskandlikelihoodtocreatenegativeimpactsinaspecificplace.Advancedreportingonthistopicalsoincludesadiscussionofthebasincontextsinwhichkeyvaluechainactorsoperate.

Detailed, location-specific assessment of basins where water challenges are pronouncedAssessingvariouscontextualfactorsinspecifichotspots

enablescompaniestoformulateanuanceddepictionoftherisksandimpacts

inthoseareasandultimatelytodeterminethemostappropriateandeffectiveresponsestrategies.Reportingonthistopicinvolvestwokeyelements:thedriversandtherelativeseverityofkeywater-relatedchallenges.

DriversAdvanceddisclosersdescribethedriverscontributingtowater-relatedchallengesinthatbasin,potentiallyincluded:

WaterscarcityandwaterstressPoorambientwater qualityRegulatoryuncertaintyInsufficientinfrastructureInadequateaccesstowaterandWASHservicesDroughtFloodingClimatechangeChangingdemographicsLimitedmanagementcapacityEcosystemvulnerabilityTotal basin availabilitySupplyvariabilityCulturalandreligiousvaluesMediaawareness

Click here

Overview of the data-sets and tools that can identify and assess the drivers of water related challenges


Severity of challengesInaddition,companiesdescribetheseverityoftheidentifieddrivers.ThistypeofassessmentcanbeconductedusingthedatasetsandtoolsdescribedunderBasicpractice.Additionaltoolsthatinvolveahigherdegreeofsophisticationarealsoavailable,including:

GEMILocalWaterTool

WWF-DEGWaterRiskFilter(FullAssessment)

WFNWaterFootprintAssessmentTool

High-level assessment of basins in which key value chain actors are locatedAdvancedreporterssharecontextualdatarelatedtokeyvaluechainactors,mostcommonlysuppliers.Companiescandescribeahigh-levelcharacterizationoftheextenttowhichbasinsinwhichkeyvaluechainactorsarelocatedarewaterstressedorotherwiseathighriskbyusingoneoftheonlinetoolslistedaboveoracompanysownproprietaryanalysis.

Hess Corporation: 2013 Corporate sustainaBilitY report

Our Seminole Gas Processing (SGP) plant in West Texas is our biggest single water user, accounting for 59 percent of our usage in 2013. The SGP plant uses water mainly for process cooling and sourc-es it from a Hess owned and operated groundwater well field that withdraws from the Ogallala Aquifer.

SGP is located within a region where baseline water stress is categorized as high risk based on evaluations we have conducted using the World Resources Institutes Aque-duct water risk mapping tool. Water demand in the region is driven primarily by agricultur-al uses.

Additional Information is available at the Texas Water Development Board website (www.twdb.texas.gov).


perFormanCe

OVERVIEW

Understandingwaterperformance(howmuchwatercompaniesuse,howefficientlytheyuseit,andsoon)helpscompaniesadoptmoresustainablewatermanagementpracticesthatminimizenegativeimpacts(orcreatepositiveimpacts),mitigatewater-relatedbusinessrisks,andcaptureopportunities.Italsoenablesstakeholders tobetterunderstandsuchissuesandtomakedecisionsaccordingly.

Thissectionprovidesguidancetohelpcompaniesdescribetheirwaterperformanceinquantitative,geographicallyexplicittermsthatallowdisclosureaudiencestounderstandhowacompanywithdraws,consumes,anddischargeswaterresources.Itisdesignedtogohandinhandwiththeprevioussectiononcontext.

CONTENT SCOPE FORMAT

Basic

Profile metric: Waterwithdrawalsinwater-stressedorwater-scarceareas

Profile metric: Percentoffacilitiesadheringtorelevantwaterqualitystandards

Profile metric: Averagewaterintensityinwater-stressedorwater-scarceareas(asappropriate)

PercentoffacilitieswithfullyfunctioningWASHservicesforallworkers

Companywide

Tabular;quantitative

Advanced (includesbasicreporting)

Waterwithdrawalsbysourcetype

Waterintensity

Waterconsumption

Waterdischargebydestinationtype

Location-specific

Waterperformanceinthevaluechain Valuechain

DETAILED DISCLOSURE

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framework to help companies display this information


BASIC

Companiesrelativelynewtowaterdisclosureshouldfocusoncollectingandreportingcompanywideperformancedataonwater withdrawalsandwater intensityinwater-stressedareas,theirprovisionofWASHservicesintheirdirectoperations,andtheiradherencetorelevantwater qualitystandards.

Total and percentage of withdrawals located in water-stressed or water-scarce areasCompanywidewaterwithdrawalsareoftenthefirstandonlywatermetricthatcompaniesdisclose.Giventhatwithdrawalswillpresentdifferentrisksandimpactsdependingontheconditionsinwhichtheyoccur,basicdisclosersshouldreportthevolumeandpercentageoftheirwithdrawalsthatoccurinwater-scarceorwater-stressedareas.CompaniescanusetheprocessdescribedaboveintheContextsubsectiontoassesswater scarcityandwater stress.Thesefigurescanprovideadditionalinsightintothecompanysriskwhencomparedwiththeirwaterwithdrawalsoccurringinnon-water-scarceornon-water-stressedareas.Whenable,manycompaniesalsofinditvaluabletoreportwater consumptiondatainadditiontowithdrawalstoprovidefurtherinsightintotheirimpacts.

Percent of facilities adhering to relevant water quality standardsBecausewaterqualityisinformedandinfluencedbyavarietyofparameters(e.g.,BOD,COD,levelsofphosphorousandheavymetals,temperature,etc.),meaningfulquantificationandreportingonthisissueisoftenelusive.Basicreportersmanagethischallengebyreportingthepercentoftheirfacilitiesadheringtooneofthefollowingtypesofwaterqualitystandardsorbenchmarks:

Sector-specificindustrialwastewaterstandard

Internallydevelopedwastewaterqualitystandard

Universalindustrialwastewaterstandard(notyetdeveloped)

Primary,secondary,ortertiarytreatment18

18Wastewatertreatmentisoftencategorizedintothreelevelsofimprovingquality:primary,secondary,andtertiary.TheWorldBankoffersadescriptionoftheselevelsoftreatmenthere.Thisap-proachisoftenhelpfulwhensector-specificorinternallydevelopedstandardsarenotavailable.

BaXter: 2013 sustainaBilitY report

Water issues vary signifi-cantly by location. Baxter used the World Business Council for Sustainable Development (WBCSD) Global Water Tool in 2012 to evaluate the availabil-ity of renewable water resources at Baxters 51 largest water-consuming locations, which repre-sent more than 96% of the companys total water use. Twelve of those sites are lo-cated in water-scarce* ar-eas, 11 in water-stressed* areas and 28 in water-suf-ficient areas.

(Availability of renewable water supplies evaluated using the World Business Council for Sustainable Development Global Water Tool. Water-scarce areas have less than 1,000 cubic meters of renewable wa-ter supply per person per year. Water-stressed areas have at least 1,000 cubic meters but less than 1,700 cubic meters. Water-suf-ficient areas have at least 1,700 cubic meters.)


Doingsoallowsdisclosureaudiencestounderstandtheextenttowhichacompanyistakingactiontominimizepollutionrelatedtountreatedorinsufficientlytreatedwastewaterdischargedfromtheirfacilities.

Whenreportingcomplianceagainstaspecificwastewaterstandard,itisessentialthatacompanydescribeswhichparametersareassessedandthethresholdsrequiredtoachievecompliancewitheachparameter.Inthiscontext,complianceisachievedwhenthesethresholdsaremet,regardlessofwhethertreatmentoccursatwastewatertreatmentplantsatthecompanysownfacilitiesoratsharedormunicipaltreatmentplants,solongasthestandardbeingmetisbasedaroundanotionofdonoharm.Forexample,acompanymightreportthat80percentofitsfacilitiesadheretoaninternallydevelopedwastewaterstandard,andthendescribethenatureofthatstandard.

Average water intensity in water-stressed or water-scarce areasCompanywidewaterintensityprovidesinsightintotheefficiencyofacompanyswateruse.Improvementsinintensityovertimeareastrongindicationthatthecompanyistakingmeaningfulstepstoimproveitswatermanagement.Efficiencyismostimportantinwater-scarceandwater-stressedareas,wherecompaniesaremostlikelytofacerisksorcreateimpacts.Companiesshouldthereforereporttheiraveragewaterwithdrawalintensityinwater-stressedareas.

Onewaytoreportintensityisbyusingproduct water intensity (waterwithdrawalperunitof

product).Thisisameaningfulmetricforcompaniesinsectorswithdiscreteproductoutputs

suchasthefood,beverage,orautomobileindustries.However,itisnotasrelevantfor

companieswithdiversifiedproductportfoliosorcompaniesinservice-orientedsectors.These

companiesmaypreferinsteadtousefinancial water intensity (waterwithdrawalperdollar

revenue).

Aswithwaterwithdrawals,dataonwaterintensityinwater-scarceorwater-stressedareas

areparticularlymeaningfulwhenpresentedinconjunctionwiththeintensityofequivalent

facilitiesinnon-water-scarceandnon-water-stressedareas.Somecompaniesfindvaluein

reportingtheirwater consumptionintensityinadditiontotheirwaterwithdrawalintensity.

Percent of facilities with fully functioning WASH services for all workers ProvidingconsistentaccesstoadequateWASHservicesintheworkplace19forallworkersiscriticalinavoidinghumanrightsimpactsandfulfillingthecorporateresponsibilitytorespecthumanrights.Companiescanreportthisissuebyenumeratingthepercentofowned-and-operatedfacilitiesthatofferaccesstofullyfunctioningandconsistentlymaintaineddrinkingwaterandsanitationservicestoallworkers.

19TheWorldBusinessCouncilforSustainableDevelopmentsWASHattheWorkplacewebsiteprovidesavarietyofresourcesthathelpcompaniesensuretheysufficientlyprovideWASHservicesintheiroper-ations.


ADVANCED

Companiesatanadvancedlevelofdisclosurepracticeprovideawiderangeoflocation-specificdatathatprovideinsightintotheperformanceofspecificfacilitiesandthecontextsinwhichtheyoperate,aswellasperformanceintheirvaluechain.

location-specific performance dataAdvancedreportersprovideinformationontheirwaterperformanceinspecificgeographiclocations(seeGeographic/geopoliticalscaleofreportingonpage34).Sincemanylargecompanieshavedozens,ifnothundreds,offacilitiesacrosstheworld,companiesmaychoosetoreportdataonlyforthehotspotslistedintheirhigh-levelassessmentofbasins(seeSection5:Context).

intel: 2013 Corporate responsiBilitY report


Location-specificperformancedataincludethefollowing:

Water withdrawals by source typeSomeadvanceddisclosersbreakdownwithdrawaldataaccordingtosourcetype,includingsurfacewater,groundwater(renewableandnonrenewable),municipal water,recycled water,runoff,saltwater,andwastewater.Thislevelofdetailcanbeimportant.Forexample,pullingwaterfromanoverdrawnaquiferhassignificantlydifferentconsequencesonlocalwaterstressthandoeswithdrawingwaterfromothersources,suchastheocean.Distinguishingbetweensourcetypesallowsaudiencestobetterunderstandtherisksandimpactsassociatedwithacompanyswaterperformance.

Water intensityIdeally,anadvanceddiscloseralsoprovidesthewater intensityofitsoperationsinspecificbasins.

Water consumption Waterconsumption,inmanycases,generatesgreaternegativeimpactsthanwithdrawals.Forthisreason,anadvanceddiscloserreportsconsumptioninadditiontowithdrawals.

Water discharge by destination typeCompaniesarealsowellservedtoreporttheirwater discharge onalocation-specificbasis.Dischargehastwokeycomponents:quantityandquality.Quantityisimportantbecausecompaniesmustbeable

Click here

How to report advanced context and performance

information

olam: Corporate responsiBilitY & sustainaBilitY report 2013

This year we completed the first water footprint of Olams busi-ness, encompassing our 55 Tier 1 facilities, our own plantations, concessions and farms, as well as our farmer suppliers. The water consumption this year at our 55 Tier 1 facilities was measured as 4.6 million m. Olams company farms and plantations had a water footprint measuring approximately 350 million m, largely from our almond orchards and rice farm.Water consumption last year by Olams farmer suppliers was esti-mated6 at 26.3 billion m per year, comprising 25 billion m of rain-water and 1.3 billion m of surface and ground water. Olams great-est business-related water impacts and risks therefore clearly exist in our upstream supply chain rather than in our direct operations.


nike, inC. FY12/13 sustainaBle Business perFormanCe summarY

In FY13, 793 material vendors and contract fac-tories tracked and report-ed their water use and dis-charge to the NIKE Water Program. Of 260 facilities discharging more than 50m3/day in FY13, 48% met NIKE water quality guidelines (which require compliance with all lo-cal regulations and NIKE guidelines, whichever are more stringent), and an-other 47% were compliant with local regulations.

The remaining 5% needed improvement. The higher percentage needing im-provement in FY13 (com-pared with the 1% noted in our FY10/11 report) is due to the expansion of the NIKE Water Program beyond apparel material vendors to include foot-wear materials suppliers for the first time.

toquantifythevolumesofpollutedwaterdischargedtoreceivingbodiesinordertounderstandtheirnegativeimpacts.Manyadvanceddisclosersreportthevolumeofwaterdischargedcompanywideandonalocation-specificbasis.Somebreakdownthedischargedatafurtherbyspecifyingdestinationtype,includinggroundwater,sewers,andsurfacewater.Thislevelofdetailhelpsinterestedaudiencesunderstandthespecificwaterbodiesthatacompanymaybeaffecting.Destination-typedatacanbereportedasapercentageoflocation-specificdischarge.

Qualityisalsoakeycomponentofdischargebutverydifficulttodisclosemeaningfully.Dischargewaterqualityvariessignificantlybyindustry.Forexample,companiesinthefoodandbeveragesectoroftendischargehighlevelsofBOD,COD,nitrogen,andphosphorus.Meanwhile,companiesintheextractivesindustryareusuallymoreconcernedwithparameterssuchastotaldissolvedsolids(TDS)orheavymetals.Advanceddisclosersunderstandtheparametersofconcernintheirindustryandfocustheirwaterqualitydisclosureonthosemetrics,alongwithinformationrel

Documents

Disclosure CEO Water Mandate 2014