Water impacts of industries, particularly energy, may take on the same importance that carbon footprints have, according to a report released Thursday by a coalition of investment, environmental and public interest groups called Ceres. It rates 100 publicly held companies in eight industries on their level of disclosure surrounding water use and risks.

“In many ways water is the new carbon,” according to Brooke Barton, Ceres senior manager for water programs and the author of the benchmarking study of 100 companies, “Murky Waters? Corporate Reporting on Water Risk.” The report included both the electric generation and oil and gas sectors in its assessment, rating 13 companies in each sector. “It is a resource that for a long time was viewed as essentially free, and it is now seen potentially as having value and it has the potential to affect the financial health of a lot of companies. I think the electric power sector is very dependent on water for cooling [generation plants], Barton told NGI.

Forty percent of all the water withdrawn for use annually is in the electric power sector, the report said. The rankings in the report are not reflective of individual companies’ operational water impact, but rather their level of disclosure on water’s role on the bottom lines.

“The report shows that many companies are not including water risks and performance data in their financial filings, nor are they providing local-level water data, particularly in the context of facilities in water-stressed regions,” said a Ceres spokesperson. Barton said this is likely to change in the future, particularly when a similar rating report on carbon disclosure is completed later this year.

Ceres plans to follow-up on the latest report in the future, and Barton said the separate “carbon disclosure survey” done by another organization will release a survey of about 300 companies in the spring, including the electric generation and oil and gas sectors. “That information will be correlated with our and made available to investors in the coming years,” she said.

Barton indicated that none of the 100 companies surveyed provide “comprehensive water data” on their supply chains, something Ceres has labeled as a “glaring omission,” given that the vast majority of the corporations’ water footprints are in the supply chain.

In deciding to focus on eight industrial sectors (beverage, chemicals, electric power, food, home building, mining, oil/gas, and semiconductors) Ceres said it focused on business sectors where what it called “water security concerns” are most likely to have a material impact on business. Companies were rated based on five key categories of disclosure levels: water accounting, risk assessment, direct operations, supply chain and stakeholder engagement.

In the electric sector, Pinnacle West’s Arizona Public Service was given the highest ranking for water disclosure, followed by American Electric Power. In oil and gas, BP topped the list, followed by Suncor Energy Inc.

In the energy sector there is a growing recognition of a tie between water and energy efficiencies, Barton said. “To the extent that companies are able to drive better energy efficiency among their customers, they will be better able to deal with water issues as well,” she said. In oil and gas certain sub sectors are “significantly impacted” by the growing water issue risks — shale gas and oilsands, for example.

“The oilsands in Alberta has the Athabasca River as the core source of water for the extraction that is going on and is very water intensive,” she said. “And while the companies are making big investments in recycling, there are also the long-term trends that the river itself is experiencing decreased flows, so projections of climate change are pointing to significant decreases in water availability around there. Then looking at natural gas, there are increasingly regulatory pressures on the shale fracturing technologies that have potential future impact on the availability of water resources.”

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