January 31, 2012 • Sustainability

New wave of investor pressure

by Jackie Cobb

In my last blog post, I talked about The Economist detailing a forecast for the energy industry in 2012. Well, it just so happens that the same “World in 2012” issue calls out the importance of water scarcity when it comes to business disclosure and investor scrutiny.

According to The Economist, “Liquidity will take on a new meaning in company finances as water scarcity gains more attention from managers and investors.” The magazine cites population growth, urbanization and climate change as contributing factors for increased emphasis on understanding the quantity and quality of water supplies available worldwide.

According to McKinsey, given current usage trends, the global water supply will satisfy only 60% of demand in 2030. The article mentions that companies will increasingly face pressure to submit their water footprints (like their carbon footprints) to satisfy requests from institutional investors.

While water may gain a higher profile in 2012, it’s worth noting that quite a few organizations have incorporated water into their sustainability strategy. An article from GreenBiz.com earlier in 2011 highlighted the increasing investor interest in the impact of water scarcity on business operations and brand value. The article cites three recent water reports that cast some additional light on the topic, published by the high-profile names Ceres, EIRIS and the Carbon Disclosure Project.

The sustainability services supporting greenhouse gas emissions reporting will need to expand to meet the growing menu of resource streams that constitute a company’s footprint, water included. As this article from The Economist suggests, as we head into 2012, a company’s sustainability strategy will continue to grow more comprehensive in nature, not remain strictly a statement of greenhouse gas emissions.

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