Pacific Institute

Assessment of current and emerging practice in corporate water reporting

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Courtesy of Pacific Institute

Recognizing the urgency with respect to addressing the emerging global water crisis, the UN Secretary-General, in partnership with a number of international business leaders, launched in July 2007 a new initiative – The CEO Water Mandate – under the auspices of the UN Global Compact. The initiative was developed with the understanding that the private sector, through the production of goods and services, impacts water resources – both directly and through supply chains. Endorsing CEOs acknowledge that in order to operate in a more sustainable manner, and contribute to the vision of the UN Global Compact and the realization of the Millennium Development Goals, they have a responsibility to make water-resources management a priority, and to work with governments, UN agencies, non-governmental organizations, and other stakeholders to address this global water challenge.

Since the inception of The CEO Water Mandate, endorsing companies and external stakeholders alike have identified transparency as a key issue underpinning the credibility of the initiative. Indeed, a cornerstone of the initiative has been the commitment from its participants to provide disclosure of their actions with regard to the Mandate. In October 2008, in an effort to ensure accountability and advance good practice in water reporting in the private sector, the Mandate published Phase One of its Transparency Framework. 1 Among other things, the Transparency Framework provided objectives and principles for water reporting within the initiative, as well as minimum reporting requirements for participation in the initiative.

However, prior to final publication of Phase One, and based on the stakeholder input and internal discussions at the Mandate’s second working conference in Stockholm in August 2008, the Mandate Secretariat and endorsing companies unanimously agreed on the necessity to take action to further advance the Transparency element of the Mandate. It was concluded that Phase Two of the Transparency Framework should start with a compilation and analysis of current corporate water reporting practices in the areas covered by the six Mandate elements, with an aim toward understanding commonalities, differences, and gaps. The group believed that such a document can help advance reporting relating to those elements in and of itself, while also serving as de facto guidance in so far as it can identify common approaches, challenges, and omissions.

This study is the fulfillment of the work plan set out in Stockholm. It compiles and analyzes the water-related information provided in the Corporate Responsibility (CR) reports of 110 companies representing 11 industry sectors that are either water-intensive in their operations or have significant leverage with which to influence water development, policy, or management. The analysis focuses on two aspects of corporate water reporting: 1) the approaches and methods used for determining content and 2) the depth, breadth, and usefulness of reported content related to water. Our assessment of reporting approaches and processes was based on three principles covered in the Transparency Framework Phase One: 1) Materiality, 2) Stakeholder Inclusiveness, and 3) Harmonization and Convergence (i.e., adherence to reporting frameworks such as GRI Guidelines). Each company was analyzed across 20 different criteria that corresponded with the six Mandate elements: Direct Operations, Supply Chain and Watershed Management, Collective Action, Public Policy, Community Engagement, and Transparency.

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