cdp water disclosure 2010 reporting guidance

CARBON DISCLOSURE PROJECT

Information Request Guide

CDP Water Disclosure

4/1/2010

© Copyright Carbon Disclosure Project 2010

Table of Contents RESPONDING TO CDP ...................................................................................................................................................................... 1

INTRODUCTION PAGE ..................................................................................................................................................................... 7

Question Guidance ..................................................................................................................................................................... 7

SECTION 1: WATER MANAGEMENT AND GOVERNANCE ............................................................................................................... 10

General Guidance for Reporting Water Management and Governance .................................................................................... 10

Question 1: Water management and governance .................................................................................................................... 10

SECTION 2: RISKS AND OPPORTUNITIES ........................................................................................................................................ 16

RISKS IN OWN OPERATIONS .......................................................................................................................................................... 16

General Guidance for Reporting Risks and Opportunities ......................................................................................................... 16

Question 2: Water‐stress risks in own operations ..................................................................................................................... 18

Question 3: Physical risks in own operations ............................................................................................................................ 20

Question 4: Regulatory risks in own operations ........................................................................................................................ 24

Question 5: Other risks in own operations ................................................................................................................................ 28

RISKS IN SUPPLY CHAIN ................................................................................................................................................................. 32

General Guidance for Reporting Risks in Your Supply Chain ..................................................................................................... 32

Question 6: Water use in supply chain ...................................................................................................................................... 34

Question 7: Physical risks in supply chain ................................................................................................................................. 36

Question 8: Regulatory risks in supply chain ............................................................................................................................. 40

Question 9: Other risks in supply chain ..................................................................................................................................... 43

DETRIMENTAL IMPACTS, OPPORTUNITIES AND LINKAGES BETWEEN ENERGY/CARBON AND WATER .......................................... 47

General Guidance for Reporting Detrimental Impacts, Opportunities and Linkages ................................................................. 47

Question 10: Detrimental water‐related impacts in past five years .......................................................................................... 47

Question 11: Opportunities ...................................................................................................................................................... 48

Question 12: Linkages between water and energy/carbon ....................................................................................................... 51

SECTION 3: WATER ACCOUNTING ................................................................................................................................................. 52

General Guidance for Reporting Water Accounting .................................................................................................................. 52

Question 13: Water withdrawals .............................................................................................................................................. 52

Question 14: Water recycling and reuse ................................................................................................................................... 56

Question 15: Water discharges ................................................................................................................................................. 58

Question 16: Water intensity .................................................................................................................................................... 60

Question 17: External verification/assurance ........................................................................................................................... 62

IMPORTANT INFORMATION .......................................................................................................................................................... 64

APPENDIX A: GLOBAL INDUSTRY CLASSIFICATION STANDARDS (GICS) .......................................................................................... 65

APPENDIX B: REPORTING BOUNDARY DEFINITIONS ...................................................................................................................... 70


RESPONDING TO CDP This document provides guidance to assist companies completing the CDP Water Disclosure 2010 information request. We encourage you to use this document as well as the guidance within the ORS. Introduction to CDP The Carbon Disclosure Project (CDP) is a not‐for‐profit organization working to create lasting relationships between various stakeholders regarding the implications to commercial and non‐commercial operations presented by climate change. CDP Water Disclosure is a new program that will collect and distribute high quality information on water‐related business risks and opportunities in order to help institutional investors better understand this critical issue. The CDP Water Disclosure 2010 information request covers companies’ water management and governance; water‐related risks and opportunities in their own operations and supply chains; and water accounting metrics including withdrawals, discharges and intensity of use. In 2010 CDP sent an information request to 302 of the world’s largest companies in sectors that are water‐intensive or face particular water‐related risks. CDP has been making information requests relating to carbon and climate change on behalf of investors since 2003. This is CDP’s first information request relating to water. To learn more about CDP and previous responses to information requests by major companies, please visit our website. Deadline for Responses Please respond to the information request by 31 July 2010. How to Respond Please respond to the information request using CDP’s Online Response System (ORS). This is the same ORS that is used for the Carbon Disclosure Project 2010 information request on carbon and climate change. If you are unable to respond via the ORS please contact us at [email protected]. Please answer the questions comprehensively while considering the relevance of the information you provide. Answers should be as specific as possible to your company. A short, direct answer is preferred over a long response with information that is not relevant to the question. Information is considered relevant if it provides detail that users, internal and external to your company, need for decision‐making. A partial response is more valuable than no response: if you do not have all of the information requested, please respond with what you have. Online Response System (ORS) Overview The CDP Online Response System (ORS) is the portal through which all information request responses must be entered. For guidance on how to use the ORS please consult the document “Guide to Using the 2010 Online Response System (ORS) for Water Disclosure”. Your company’s access to the information request in ORS must be activated through the MyCDP web portal. The activation process is as follows:

CDP’s Customer Relationship Management (CRM) system contains your company’s contact(s) for disclosure. An email will be sent to these contacts with a link to the MyCDP portal webpage where they can establish a user name and password, activate your company’s information request and respond to it.

The first contact to activate the CDP Water Disclosure information request in a given reporting year will be your company’s CDP Water Disclosure “registered user” for that year. Other users will be able to introduce and save data but only the registered user will be able to submit the final data to CDP once the response is complete.

When you enter the MyCDP portal you will be presented with the “MyCDP” page which has tabs enabling you to view your company/user profile and respond to the information request.

In the “Profile” tab you can see details about your company that are already entered in CDP’s CRM system. If you wish to you may update this information. The information includes the country where your company is headquartered and its industry sector. CDP classifies companies


based on the Global Industry Classification Standard (GICS) list. Please see Appendix A of this document for a breakdown of the sectors and their parent groups.

When you have updated this information as necessary click the “Respond” tab. In “Respond” you can see the information requests that are active for your company and the registered user for each of them. To proceed to the ORS click the “Respond Now” button (at the bottom right of the page). This will launch the ORS Homepage, which contains links to your active information requests and any previous responses your company has made.

Click on “CDP Water Disclosure 2010” to enter the introduction page for the CDP Water Disclosure 2010 information request. This page asks for an introduction to your company, the start and end date of the year for which it is reporting, its reporting boundaries, and the countries or regions in which it operates. The introduction page is used to configure the rest of the questionnaire in the correct form.

Once you complete the introduction page and click “Save”, your information request will be configured and you can see all the questions included in the request.

From this point on, to access your information request you simply need to log in to the portal, and click on the “Respond Now” button in the “Respond” page. This will take you to the ORS Homepage where you can decide which information request (e.g. CDP Water Disclosure 2010, Investor CDP2010 etc.) you want to work on. Module Structure Navigation Bar: The information request is divided into several modules listed at the top of the ORS page. By rolling your mouse over these modules, you can select from the different questions held within each module. Using this navigation bar will greatly improve your movement throughout the system. You can also navigate through the pages by clicking “Previous” or “Next” at the bottom of each question page. Question Completion Instructions: The right hand side of each question page may display instructions for completing the question. Where provided, this will duplicate or summarize the guidance provided in this document. Please refer to the “Reporting Guidance Index”, which includes this page, for full guidance. Question Text Limits: Please note the following text limits in the ORS. Answers requiring text answers will be limited to 5,000 characters, or roughly one page of text. Text fields in tables will limit responses to 2,400 characters. Further Information Fields: You may provide additional information beyond that which is requested in the question in the “Further Information” fields and attachment feature at the bottom of each page. Please do not use these fields for providing your actual answer unless asked to do so. Save Function: Within the ORS there is an automatic save function. As you navigate, your information will be saved regardless of whether you press the “Save” button. However, if you happen to lose your internet connection any information on the current page that has not been saved will be lost. Companies are encouraged to save regularly to avoid the loss of information. Water Reporting Water presents a unique set of measurement and reporting challenges because it is a global and local issue and because there are different types of “use”. “What gets measured gets managed” is a common business adage, but even companies that are working to understand water‐related risks and opportunities are struggling with the fundamental questions of quantifying their water use, assessing their exposure to water risk, and identifying the opportunities that water presents, irrespective of what information investors and other stakeholders might require. While much can been learned from the experience of measuring and reporting GHG emissions, water measurement and disclosure is not as straightforward for a number of reasons. First and foremost, water is a local or regional issue. Challenges and opportunities depend on patterns of local precipitation, watersheds and aquifers, as well as the degree and nature of local use. Unlike a tonne of carbon dioxide that has the same impacts whether emitted in Stockholm or Sydney, the geographic dimension of water use is critical. A cubic meter of water used in Sydney has very different consequences from a cubic meter used in Stockholm. This


creates complexities for businesses trying to understand, disclose meaningfully and manage their use of water and their water‐related risks. Compounding this complexity, the global nature of business and supply chains means that water use is linked across multiple geographies. Even when their own assets are not affected, many businesses will be significantly affected by changing patterns of water availability far from their own facilities. This increases the scale of water measurement and disclosure challenges. For large companies relying on perhaps many thousands of suppliers, assessment of water use and related product or supply chain issues can be highly complex. Furthermore, for companies that rely on global agro‐commodities markets for raw materials, simply obtaining reliable data may be a substantial challenge. Once a company determines the scope of its exposure, the next challenge is deciding what to measure. Unlike measurement of GHG emissions, which can be expressed in tonnes of CO2‐e, there is no adequate, all‐encompassing unit of measurement for water. Rather than considering volume alone, it is also necessary to consider the type of water used and returned to the water system, its quality and whether it is scarce or abundant in the region concerned. Emerging Water Reporting Standards Standards for water reporting are not as consistently established as those for carbon. However, groups including the Global Reporting Initiative (GRI) which has developed a leading standard for many sustainability indicators, are developing such standards (methods, guidelines and criteria), accounting tools (inputs, outputs, and quality), and other tools or methodologies to account for water impacts. For an overview of major initiatives that are relevant to business, you may refer to a recent document prepared by the World Business Council for Sustainable Development (WBCSD) and the International Union for Conservation of Nature (IUCN), “Water for Business: Initiatives Guiding Sustainable Water Management in the Private Sector”. This document provides links and contact information for each initiative and can be downloaded from the WBCSD website. CDP Approach CDP believes that establishing standards and improving disclosure must develop in parallel. CDP will work closely with WWF, the CEO Water Mandate, WRI, WBCSD, GRI and similar organizations and strongly supports the development of effective standards. This is an area where we particularly wish to engage stakeholders and help accelerate movement towards a standard which companies are comfortable reporting against and through which investors can gain meaningful information. At present, CDP relies on relevant reporting principles from the GHG Protocol1, the GRI indicators for water2, and additional existing water reporting guidance that is relevant to individual questions. We also invite companies to break down globally reported figures in a manner that they deem appropriate and request information on the methodologies used for calculations. Application of GHG Protocol Principles and GRI Guidance to Water Reporting While various tools, methodologies and initiatives have emerged to assist companies report on water‐related issues, no dominant methodology has been adopted. Therefore, methodologies and standards from the more mature field of GHG emissions reporting, particularly widely used standards such as the Greenhouse Gas Protocol (GHG Protocol) and the Global Reporting Initiative (GRI), can be applied to the field of water reporting. Where appropriate, this guidance incorporates definitions and approaches established by these bodies.

1 For more information, please see“The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)”, (GHG Protocol), developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). 2 These include GRI G3 indicators EN8, EN9, and EN10 for water and indicators EN21 and EN25 for emissions, effluents and waste. For more information, on the GRI G3 Reporting Framework, please visit http://www.globalreporting.org/ReportingFramework/.


The GHG Protocol makes the following distinction between accounting and reporting:

“When planning the consolidation of GHG data, it is important to distinguish between GHG accounting and GHG reporting. GHG accounting concerns the recognition and consolidation of GHG emissions from operations in which a parent company holds an interest (either control or equity) and linking the data to specific operations, sites, geographic locations, business processes and owners. GHG reporting, on the other hand, concerns the presentation of GHG data in formats tailored to the needs of various reporting uses and users.”

The GHG Protocol outlines five principles to ensure a true and fair account of a company’s GHG emissions. CDP suggests that all of these principles be adopted for the purpose of water reporting. These principles are as follows:

1. Relevance: Ensure that the water use inventory appropriately reflects actual water use and serves the decision‐making needs of users – both internal and external to the company.

2. Completeness: Account for and report on all water‐related activities within the chosen inventory boundary. Disclose and justify any specific exclusions3.

3. Consistency: Use consistent methodologies to allow for meaningful comparisons of company’s use of water over time. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.

4. Transparency: Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.

5. Accuracy: Ensure that the quantification of water use is sufficiently accurate to enable users to make decisions with reasonable assurance as to the integrity of the reported information.

Information is considered relevant if it contains the detail that users, both internal and external to the company, need for their decision‐making. When considering what to disclose, please identify and report information that is most likely to be of use and benefit to the audience requesting information (in this case, the investment community). CDP takes a broad view of relevance in this first year of reporting water risks and opportunities and recommends that companies consider the general definition of sustainability “materiality” provided in the GRI G3 Guidelines as a starting point. This definition puts the onus on companies to determine a materiality threshold based on internal, industry, and external stakeholder interests. More information is available at the GRI website. Reference to Methodologies and Calculation Tools for Water Reporting In each section of the guidance, sources, methodologies and calculation tools are provided to assist companies answer the questions and report relevant information. Certain questions in the “Water Accounting” section of the information request correspond to the GRI G3 Guidelines as follows:

CDP Water Disclosure Question Number(s)

GRI G3 Indicator

13.1 through 13.3 EN8: Total water withdrawal by source

13.4, 13.4a, and 13.5 EN9: Water sources significantly affected by withdrawal of water

14.1 through 14.3 EN10: Percentage and total volume of water recycled and reused

15.1 and 15.2 EN21: Total water discharge by quality and destination

15.5, 15.5a, and 15.6 EN25: Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff

3 Please note that the scope of your inventory boundary and any exclusions should be defined in introductory questions 0.3a, b, and c.


For more information you may visit the GRI website and search for water indicators in the section of the page titled “Indicator Sort Search”. Public or Non‐Public Response When responding to CDP you will be given a choice as to whether your response is made public or non‐public. If you choose to make your response public, the response will be made available on the CDP website as outlined below. Non‐public responses will not be made available on the website and will only be used as outlined below. We strongly encourage companies to make their responses public. For Public Responses Companies agree that a public response to CDP Water Disclosure 2010 will be used by CDP in furtherance of its charitable mission and that the response may be:

1. Made available as soon as it is received by CDP to its signatory investors, partners, appointed report writers, selected rating agencies and any other parties that CDP deem appropriate,

2. Made publicly available at www.cdproject.net after the release of the CDP Water Disclosure 2010 annual report and stored and preserved on CDP’s servers indefinitely thereafter,

3. Distributed through selected partners, 4. Compiled in CDP databases and made available in original, modified or adapted form (for a fee or

otherwise) for use by commercial and non‐commercial organizations, 5. Amalgamated with information about the responding company from other public sources including

rating agencies and financial information distributors, 6. Used as a best practice example in CDP literature and research, 7. Used individually or as part of aggregate results in CDP’s reports and in any other research conducted

or commissioned by CDP, 8. Used in any other way that accords with CDP’s charitable mission.

For Non‐Public Responses Companies agree that a non‐public response to CDP Water Disclosure 2010 may be:

1. Made available as soon as it is received by CDP to its signatory investors, partners and appointed report writers but not to any other parties, and

2. Used in production of aggregate or anonymous statistics in any CDP report. Scoring of Responses CDP and other organizations write and publish reports that include an overview of CDP responses. Responses to CDP Water Disclosure 2010 and 2011 will not be scored by CDP or its partners. CDP will consider scoring responses (based on, for example, the comprehensiveness of the companies’ disclosure and on performance factors) from 2012 onward. What if a company wishes to change or update a response? In order for responses and any revisions to be included in the annual reports that CDP publishes each year, they must be received by 31 July 2010. After you submit your response via the Online Response System, it will become ‘read‐only’ and can then only be amended by CDP staff. CDP can accept revisions to responses in writing at any time and will aim to make these available from www.cdproject.net within five days of receipt. How can a company confirm its participation? On receipt of the information request and supporting documents, you may activate and register your company’s response in the ORS which will notify CDP of your intent to participate. Alternatively, you may e‐mail [email protected] to confirm your participation in CDP Water Disclosure 2010. What are the financial implications of responding? CDP has charitable status and seeks to use its limited funds effectively. Consequently, responses must be prepared and submitted at the expense of responding companies. CDP also reserves the right, where it deems it appropriate in view of its charitable aims and objectives, to charge for access to or use of data and/or reports it publishes or commissions.


What is the basis of participation, and what will happen to the data received? Companies responding to CDP Water Disclosure 2010 make no claim of ownership in the data they submit and agree that CDP has an irrevocable license to use and copy the responses and their contents without restriction and to authorize others to do the same. Companies responding to CDP Water Disclosure 2010 agree that CDP is free to make use of the data including as described below and with respect to public responses otherwise without restriction whatsoever in furtherance of its charitable mission. Companies also agree that CDP will own the databases in which that data is stored, as well as the contents of those databases. CDP’s Legal Status The Carbon Disclosure Project is a UK Registered Charity no. 1122330 and a company limited by guarantee registered in England no. 05013650. In the US, the Carbon Disclosure Project is a special project of Rockefeller Philanthropy Advisors with United States IRS 501(c)(3) charitable status. The Carbon Disclosure Project is an independent not‐for‐profit organization holding the largest database of primary corporate climate change information in the world. Thousands of organizations from across the world’s major economies measure and disclose their greenhouse gas emissions and climate change strategies through CDP. CDP puts this information at the heart of financial and policy decision‐making and its goal is to collect and distribute high quality information that motivates investors, corporations and governments to take action to prevent dangerous climate change.


INTRODUCTION PAGE Question Guidance

0.1 Introduction: Please give a general description and introduction to your organization. 0.2 Reporting Year: Please state the start and end date of the year for which you are reporting data. 0.3a Reporting Boundary: Please indicate the category that describes the company, entities, or group for which

water‐related impacts are reported. 0.3b Exclusions: Are there any geographies, activities, facilities or types of water inputs/outputs within this boundary

which are not included in your disclosure? If you select “Yes” in answer to 0.3b, you are then asked question 0.3c: 0.3c List of Exclusions: Please describe any exclusion in the following table. Regardless of your answer to 0.3b, you are then asked question 0.4: 0.4 Country list configuration: Please select the countries or regions for which you will be supplying data. This

selection will be carried forward to assist you in completing your response.

General Guidance for the Introduction Page: The introduction page must be filled out and saved before the survey modules will appear. Once the introduction page is saved, you will be able to navigate between pages of the survey using the navigation bar. You may also return to the introduction page at any time to update information.

Specific Guidance for Question 0.1: Introduction: Please give a general description and introduction to your organization. In the text box provided, please enter a brief introduction to your company. You are not required to give an introduction to your company, but may do so if you wish. Specific Guidance for Question 0.2: Reporting Year: Please state the start and end date of the year for which you are reporting data.

Enter periods that will be disclosed

From: [Date entry] To: [Date entry]

In the table provided, please enter the start and end dates of your reporting period in the following format: day/month/year in full, e.g. 31/01/2008. You must enter a reporting period before proceeding to the full information request. The current reporting year is the most recent 12‐month period for which data is reported. This reporting period should be applied to your answers for the entire information request. When answering some subsequent questions, you may not have data for the entirety of this reporting year. In such a case, you may:

Extrapolate your data to cover the entire reporting year. This potential source of inaccuracy can be logged in the comments section of the relevant question, or

Leave survey questions that request annual/annualized data blank. Specific Guidance for Question 0.3a: Reporting Boundary: Please indicate the category that describes the company, entities, or group for which you are reporting.

Companies over which financial control is exercised‐ per consolidated audited financial statements

Companies over which operational control is exercised

Companies in which an equity share is held

Other‐ please provide details From the drop down list, please choose the relevant response or select “Other” to provide a text entry. This question asks you to define the organizational boundary (i.e. the group, companies, businesses or organizations) for which you are supplying data. These may be organized by financial control, operational control, equity share or another measure. The way in which companies are identified for inclusion within the reporting boundary is known as the “consolidation approach”. Unless stated otherwise, the information you provide throughout the information request


should be presented as “consolidated” results covering all of the companies, entities, or businesses within your reporting boundary. For more detailed guidance on determining reporting boundaries, particularly where joint ventures or complex operational structures are concerned, please refer to Appendix B: Reporting Boundary Definitions. These definitions are drawn directly from Chapter 3 of the GHG Protocol. Although this protocol refers to GHG emissions reporting, the general definitions may be applied to water reporting. References in the information request to “your company” are to the company, companies, businesses, organizations or groups within your organizational boundary. Please consistently apply this organizational boundary when responding to questions unless you are specifically asked for data about another category of activities. Specific Guidance for Question 0.3b: Exclusions: Are there any geographies, activities, facilities or types of water inputs/outputs within this boundary which are not included in your disclosure? Please select “Yes” or “No”. If you answer “Yes”, you will be taken to question 0.3c. If you answer “No”, you will be taken directly to question 0.4. The GHG Protocol comments on reporting of exclusions and notes that “any acknowledgement should be made in the report each year in order to enhance transparency; otherwise new users of the report in the two or three years after the change may make incorrect assumptions about the performance of the company.” You may exclude sources of water‐related activities in a particular geography, along a line of business activities, from small facilities for which it is difficult to gather data or by selected water inputs/outputs. Companies are encouraged to refer to Appendix B: Reporting Boundary Definitions when determining exclusions. Any exclusions must be clearly identified in question 0.3c. Specific Guidance for Question 0.3c: List of Exclusions: Please describe any exclusion(s) in the following table.

Exclusion Please explain why the geography, activity, facility or type of water input/output is excluded

[Text entry] [Text entry]

You will be asked to answer this question only if you have answered “Yes” to question 0.3b. In the table provided, please identify and explain each geography, activity, facility or type of water input/output that is excluded from your disclosure. Elements of your business may be excluded for a number of reasons. A geography may be excluded if low water usage or data limitations render reporting infeasible for operations in that country or region. Similarly, an activity (e.g. a product line, type of business process, or type of supplier) may be excluded due to limited data or reporting feasibility. A facility may be excluded due to recent mergers, acquisitions and divestitures, outsourcing and in‐sourcing of activities. Smaller facilities for which it is not currently possible to track water use may also be considered for exclusion. Finally, some organizations may not yet have the capacity to track all types of water inputs and outputs. For example, a company may use rainwater at some facilities but not track the quantity or quality of this source in which case the source may be considered for exclusion. For all exclusions, please clearly explain why the geography, activity, facility, or type of water input/output is not included in your disclosure. Please note that CDP seeks comprehensive, representative data on water use and water‐related impacts on behalf of participating investors. In addition, please note that the rationale for excluding sources must be consistent with the guidelines in Appendix B: Reporting Boundary Definitions. Specific Guidance for Question 0.4: Country/Region List Configuration: Please select the countries or regions for which you will be supplying data. This selection will be carried forward to assist you in completing your response.

Select a country/region

[Drop down list]

From the drop down list in the table provided, please select all countries, regions or business areas in which your organization’s activities are covered by the reported data. The information that you enter here will be carried through to


questions 3.2, 4.2, 5.2, 7.2, 8.2, 9.2, 13.2b, 14.2b, 16.1a, and 16.1b. You may also add countries, regions or other categories to individual questions as you answer them. However, consideration of these distinctions up front may be helpful in proceeding with the questionnaire. You may update or revise your list at any stage, in which case your updates will also be carried through to the relevant questions. If you delete a country or region after having introduced data for that country or region in later questions, the associated data will also be deleted. The list in this question is pre‐populated with country data as in other CDP information requests. However, because water‐related impacts can be specific to local regions, watersheds, business units or operations, you may want to provide data along different lines and may do so by selecting “Other”. Some examples of these categories are as follows:

Area/Unit Description

Country Water risks, opportunities, or impacts from your company’s activities in a specific country.

Region Water risks, opportunities, or impacts from your company’s activities in a specific region. For example, you may have impacts that are limited to a region of a country that cannot be reported on a country basis.

Watershed Water risks, opportunities, or impacts from your company’s activities in a specific “watershed”. For example, you may have impacts across borders resulting from a single activity that cannot be reported on a country basis.

Business unit Water risks, opportunities, or impacts from your company’s activities by business unit. A business unit may refer to parts of your company that are differentiated by the products they produce, services they provide or functions they perform within the company. If certain business units have significant water‐related impacts but others have none, you may want to report specifically on the water‐intensive business units.

Facility Water risks, opportunities, or impacts from your company’s activities by facility. In accordance with a definition provided by the GHG Protocol stationary combustion tool, a “facility” is described as “all buildings, equipment, structures and other stationary items” owned or operated by your company. These may be located “on a single site or on contiguous or adjacent sites”. If certain facilities have significant water‐related impacts but others have none, you may want to report specifically on the water‐intensive facilities.


SECTION 1: WATER MANAGEMENT AND GOVERNANCE General Guidance for Reporting Water Management and Governance The first question in this information request focuses on high‐level water management and actions taken by your company to address water‐related issues. This includes governance of your company’s water management plans, details of actions your company has taken in respect of its own operations and external factors, and water‐related initiatives in which your company participates. In particular, questions 1.5 and 1.6 request detailed information on water‐related actions that your company currently takes in respect of its own operations and in respect of factors beyond its own operations. Several categories of activities are provided as starting points, and examples of these activities are provided in the specific question guidance. However, a wide variety of activities may be considered and a comprehensive listing of your company’s activities is encouraged. Question Guidance

Question 1: Water management and governance

1.1 Does your company have a water policy, strategy or management plan? If you select “Yes” in answer to 1.1, you are then asked questions 1.2 through 1.8: 1.2 Please describe your policy, strategy or plan here. 1.3 Where is the highest level of responsibility within your company for the policy, strategy or plan? Depending on your selection, you will be asked for further detail in question 1.3a or 1.3b. 1.4 Does the policy, strategy or plan specify water reduction, quality or efficiency targets or other water‐related

goals? 1.5 What water‐related actions has your company taken in respect of its own operations? 1.6 What water‐related actions has your company taken in respect of factors beyond its own operations? 1.7 What water‐related actions are you considering taking? 1.8 What water‐related initiatives does your company participate in and what tools or resources does it use? If you select “No” in answer to 1.1, you are then asked question 1.9: 1.9 You may explain here why your company does not have a water policy, strategy or management plan and if you

intend to put one in place.

Specific Guidance for Question 1.1: Does your company have a water policy, strategy or management plan? Please select “Yes” or “No”. If you answer “Yes”, you will be taken to questions 1.2 through 1.8. If you answer “No”, you will be taken to question 1.9. Definition Water policy, strategy or management plan: A general or specific plan to manage water‐related issues affecting your company. It may be part of a CSR or environmental report and may incorporate tools and resources used in water‐related initiatives. Although your water policy, strategy or management plan can take many forms, it generally must be guided by a mission or vision, have clear objectives and have an action plan. Specific Guidance for Question 1.2: Please describe your policy, strategy or plan here. You will be asked to answer this question only if you have answered “Yes” to question 1.1. In the text box provided, please describe your company’s water policy, strategy, or plan. The description should be high level and may include some or all of the following:

A general description of your policy, strategy or management plan. Whether it is company‐wide, partially external or only relevant to specific sites or activities. For

example, the plan may apply to resources that are owned or controlled by your company, to resources controlled by another company in your supply chain, or to other related entities.

An explanation of how your company selects and prioritizes water‐related actions. For example, you might prioritize actions in water‐scarce regions over those in regions where water is abundant.


Do not specify any targets included in the policy, strategy or plan as you will be given an opportunity to do so in question 1.4. Supporting documents or links may be uploaded in the “Further Information” box at the bottom of the page. Specific Guidance for Question 1.3: Where is the highest level of responsibility within your company for the policy, strategy or plan?

Board‐level committee or executive body

Other levels

There is no individual with overall responsibility for the plan From the drop down list, please select one of the options provided. Selecting “Board‐level committee or executive body” will lead to question 1.3a where a further selection is required. Likewise, selecting “Other levels” will lead to question 1.3b where a further selection is required. Specific Guidance for Question 1.3a: Please specify who is responsible.

Board/Executive Board

Individual Board Member

Sub‐set of the Board

Committee appointed by the Board

Other You will be asked to answer this question only if you have selected “Board‐level committee or executive body” in question 1.3. From the drop down list, please select one of the options provided. If a group or individual is not listed among the options, please select “Other” and provide a response in the text box provided. Specific Guidance for Question 1.3b: Please specify who is responsible.

Officer/manager reporting directly to board committee/board member

Officer/manager not reporting directly to board committee/board member

Other You will be asked to answer this question only if you have selected “Other levels” in question 1.3. From the drop down list, please select one of the options provided. If a group or individual is not listed among the options, please select “Other” and enter the information in the text box provided. Specific Guidance for Question 1.4: Does the policy, strategy or plan specify water reduction, quality or efficiency targets or other water‐related goals?

Type of target/goal Target/goal Comments

[Drop down list] [Text entry] [Text entry]

From the drop down list in the table provided, please select your company’s water‐related targets or goals. You may add rows to describe multiple targets or goals. In the “Target/goal” box, please describe the individual targets or goals. Where appropriate please include the base year, end year and unit of measurement for each. In the “Comments” box, please specify the scope of the goal and commitment of resources towards it. For example, a goal may be set for the company as a whole, a particular facility, an individual product line, or a unit of production. You should also indicate whether the policy, strategy or plan commits to the financial or personnel resources necessary to achieve them. Any additional comments relevant to the question may also be included.


Definitions Absolute reduction target: A target to reduce the absolute amount of water withdrawn, consumed or discharged. For example, a company may set a target for a 10% reduction in the total volume of water consumed by year 2020 in comparison to a year 2000 baseline. Efficiency target: A target to reduce the amount of water withdrawn, consumed or discharged in production of a given amount of output, typically a revenue or production unit. For example, a company may set a target to reduce the m3 of water consumed per dollar value of a particular product line to 50% of 1999 levels by year 2015. Quality of discharges target: A target to improve the quality of wastewater discharged by your company. For example, a company may set a target to reduce nitrogen discharges to 30% of regulated maximum levels. A sample response is provided below:

Type of target/goal

Target/goal Comments

Absolute reduction

10 percent reduction in the absolute volume of water consumed. Base year: 2000; End year: 2020. This goal is companywide, targeting water consumption from all the company’s own operations. It excludes water consumed by the company’s suppliers.

We determined that the largest feasible reduction can beachieved by increasing water efficiency in our manufacturing process. For this purpose our water management plan commits to the adoption of more water‐efficient equipment in all of our new sites and the replacement of some old equipment. This target does not relate to water consumed by our suppliers as we have yet to engage with our suppliers on this issue.

Specific Guidance for Question 1.5: What water‐related actions has your company taken in respect of its own operations?

Action Comment

[Drop down list] [Text entry]

From the drop down list in the table provided, please select the actions that are relevant to your company. This is an indicative list intended to help you provide relevant information, and you are not expected to be addressing all of the issues listed. CDP recognizes that other water‐related actions taken by your company might be specific to your operations and thus not included in this list. Please report these actions by choosing the “Other” option. Please describe each action in the “Comments” column, including its scope (e.g. company‐wide, facility specific, or product line specific), any associated targets and progress towards those targets, and relevant detail on the methodology/tools used to pursue these actions. Please note that this question asks about water‐related action taken by your company only in respect of its own operations. Actions taken in respect of factors beyond your company’s operations should be described in question 1.6. Definitions Water related actions: Actions taken to address water‐related issues, to achieve water‐related targets or to realize the objectives set in a water policy, strategy or management plan. When answering questions 1.5 and 1.6, an indicative list of such actions will be provided in a drop‐down menu. Your company’s own operations: Anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business.


Examples of activities that could be covered by each action area are provided below:

Action Examples of Relevant Actions

Measured withdrawals and/or consumption of water

Your company uses a water measurement tool or methodology to track water withdrawals overall or by source (e.g. by surface water, groundwater, fresh water) for the entire organization or some facilities.

Reduced absolute withdrawals and/or consumption of water

Changes to technologies, processes, or supply have been deployed to reduce total year‐over‐year water consumption company‐wide or at some facilities.

Reduced intensity of withdrawals and/or consumption of water

Changes to technologies, processes, or supply have been deployed to reduce the intensity of water consumed per unit of output (typically revenue or production unit) company‐wide or for some products/revenue streams.

Reduced costs associated with water usage

A wide variety of actions may be applicable, including deployment of cost‐reducing water conservation practices, water‐efficient technologies that reduce costs, and other water‐related actions that result in measurable cost savings.

Measured water discharge volumes and/or quality

Your company uses a water measurement tool or methodology to track water discharges overall or by type of discharge for the entire company or some facilities.

Measured water recycling and reuse volumes

Your company uses a tool or methodology to track water recycling and/or reuse volumes (e.g. process water recycling) company‐wide or at some facilities.

Improved quality of discharges Actions have been taken to eliminate or substantially reduce emissions of pollutants into water bodies.

Identified sustainability of water sources (including seasonal variations in availability)

Prior to withdrawal from water sources, your company considers the regenerative capacity of the source, seasonal variations in water availability, withdrawals by other users or other factors in the sustainability of water sources.

Increased supply of water (e.g. through desalination or transfers)

Measures have been taken to increase the supply of water through desalination, transfers or other advanced water generation methods at some or all of your company’s sites.

Considered water‐related issues in siting practices

The siting process for new facilities accounts for water‐related issues. For example, constraints on water supply may influence site selection for a new facility, or measures above and beyond regulatory considerations may be incorporated into site development to mitigate water‐related impacts.

Considered water‐related issues in sourcing decisions

Your company has considered water source and discharge impacts when selecting and developing new water sources. Note that this question refers to water sourcing; interaction with other suppliers on water is covered in question 1.6.

Invested in making products more water‐efficient/developing more water‐efficient products

Product lines have been redesigned or replaced to reduce water impacts during their use. For example, a company may redesign existing products or develop new ones that reduce life cycle water intensity during the product’s use and/or disposal phases.

Ensured employees have access to safe drinking water and sanitation

Your company has taken measures to provide employees with safe drinking water sources and sanitation facilities, provided educational resources to employees, or taken other actions to ensure employee access to safe drinking water. Note that public access to safe drinking water and sanitation is covered in question 1.6.

Specific Guidance for Question 1.6: What water‐ related actions has your company taken in respect of factors beyond its own operations?

Action Comment


From the drop down list in the table provided, please select the actions that are relevant to your company. This is an indicative list intended to help you provide relevant information, and you are not expected to be addressing all of the issues listed. CDP recognizes that the water‐related actions taken by your company might be specific to your company and thus not included in this list. Please report these actions by choosing the “Other” option. Please describe each action selected in the “Comments” column, including its scope (e.g. company‐wide, facility specific, or product line specific), any associated targets and progress towards those targets, and relevant detail on the methodology/tools used to pursue these actions.


Definitions Water related actions: Actions taken to address water‐related issues, to achieve water‐related targets or to realize the objectives set in a water policy, strategy or management plan. When answering questions 1.5 and 1.6, an indicative list of such actions will be provided in a drop‐down menu. Factors beyond your company’s own operations: Factors outside the direct control of your company, involving external stakeholders such as policy‐makers, communities, suppliers or other organizations and bodies. Examples of activities that may be covered by each action area are provided below.

Action Examples of Relevant Actions

Increased access to safe drinking water

Your company has adopted water sourcing and usage practices designed to increase public drinking water access, has invested directly in drinking water infrastructure or products for public use, and/or has supported organizations that work with the public to develop safe drinking water resources.

Increased access to sanitation Your company has adopted water sourcing and usage practices designed to increase public access to sanitation resources, has invested directly in sanitation infrastructure for public use, and/or has supported organizations that work with the public to develop sanitation resources.

Enhanced habitat or watershed management

Your company has adopted water sourcing and usage practices designed to reduce or eliminate impacts on local habitats or watersheds, has invested directly in improvement projects, and/or has supported organizations that work on habitat or watershed management.

Engaged with suppliers on water issues

May include a variety of actions, such as supplier education, partnership with suppliers on water‐related initiatives, and/or selection of suppliers based in part on their use and discharge of water, their locations in water‐constrained regions or high‐risk watersheds.

Engaged with investors Your company has engaged corporate‐level investors (considered separate from any direct investors in water projects) on decisions relating to water usage. This may include investor education, disclosure of water impacts directly to investors or response by your company to investor demands for water performance.

Engaged with local communities Your company has worked with local communities to address water issues specific to each community. This may include sanitation and drinking water projects, watershed cleanup projects above and beyond those mandated by regulation, and a variety of other water availability and quality efforts.

Engaged with NGOs Your company has funded, partnered with, or otherwise supported NGOs in initiatives to improve water availability and/or quality.

Engaged with public policy makers Your company has engaged in policy development processes, supported research or policy projects, or engaged in partnerships with regulatory agencies on water issues.

Engaged in water management processes (e.g. consultations, user group discussions, conferences, etc.)

May include a wide variety of activities, such as consultations, user group discussions, conferences, and other collaborative activities focused on water management issues.

Engaged in initiatives to develop standardized water accounting methodology

Your company has participated in external standard development or other collaborative processes to develop water accounting methodologies for use across organizations, (e.g. engagement in development of the WBCSD Global Water Tool).

Specific Guidance for Question 1.7: What water‐related actions are you considering taking? In the text box provided, please specify any additional water‐related actions that you are considering beyond those discussed in questions 1.5 and 1.6. These potential actions may contribute to your water policy, strategy or management plan or go beyond the current plan. To answer this question, you might want to refer to the potential actions listed in questions 1.5 and 1.6.


Specific Guidance for Question 1.8: What water‐related initiatives does your company participate in and what tools or resources does it use?

Initiative Comment


From the drop down list in the table provided, please select the water‐related initiatives in which your company currently participates. Additional initiatives may be included by selecting “Other” and entering the initiative in the text box provided. You may add as many rows as needed to list the relevant initiatives. In the comments box, please enter any comments on the nature of the initiative and/or your level of participation. The purpose of this question is to determine whether companies are operating independently with respect to water management or are discussing water issues with others / seeking out best practices in this rapidly changing space. Definition Water‐related initiatives: Initiatives led by businesses, civil society or governments for the purpose of addressing water‐related issues. These initiatives provide tools and resources which aim to: (1) help organizations identify water‐related risk and opportunities; (2) provide guidance on how to measure water‐use; and/or (3) present a reporting methodology. For an overview of many existing business‐relevant initiatives, you may refer to a recent document prepared by the World Business Council for Sustainable Development (WBCSD) and the International Union for Conservation of Nature (IUCN), “Water for Business: Initiatives Guiding Sustainable Water Management in the Private Sector”. You can learn more and download the document from the WBCSD website. Specific Guidance for Question 1.9: You may explain here why your company does not have a water policy, strategy or management plan and if you intend to put one in place. You will be asked to answer this question only if you have answered “No” to question 1.1, indicating that you do not have a water management plan. In the text box provided, please explain why your company does not have a water policy, strategy or management plan and if you intend to put one in place.


SECTION 2: RISKS AND OPPORTUNITIES Three modules comprise Section 2:

Risks in your own operations Risks in your supply chain Detrimental water impacts, opportunities, and linkages between energy/carbon and water

While these are part of the same section, they are discussed separately due to their presentation as independent modules in the ORS. RISKS IN OWN OPERATIONS General Guidance for Reporting Risks and Opportunities Corporate reporting can be challenging as it requires companies to provide statements about their prospective condition. Some organizations, such as accountancy firms and their governing bodies, have published guidance on how to prepare statements that contain forward‐looking information. Before answering the questions covering risks and opportunities you may wish to consult with the financial, legal, and/or compliance department for advice on your company’s general approach to the provision of forward looking statements and information on risks and opportunities. As noted in the introduction to this guidance, water‐specific reporting methods are still in development by multiple organizations, and CDP requests that companies indicate in their responses when different methods are used. However, the GHG Protocol sets out general guiding principles regarding relevance, understandable information and reliability, based on financial reporting principles, that are equally applicable to water. You may use these principles together with the question‐specific guidance provided in this section to provide answers on risks and opportunities. Please consider the following principles specifically from the GHG Protocol:






Information is considered relevant if it contains the detail that users, both internal and external to the company, need for their decision‐making. When considering what to disclose, please identify and report information that is most likely to be of use and benefit to the audience requesting information (in this case, the investment community). CDP takes a broad view of relevance in this first year of reporting water risks and opportunities and recommends that companies consider the general definition of sustainability “materiality” provided in the GRI G3 Guidelines as a starting point. This definition puts the onus on companies to determine a materiality threshold based on internal, industry, and external stakeholder interests. More information is available at the GRI website. If you need more detailed guidance on how to assess the risks and opportunities your company is facing in relation to water, you might find “The Corporate Ecosystem Services Review: Guidelines for Identifying Business Risks and Opportunities from Ecosystem Change”, published by WBCSD, WRI and the Meridian Institute, useful.



If you do not consider your company to be exposed to significant risks or presented with significant opportunities related to water, you will be asked to explain why this is the case. Your answer should specify risks and opportunities that you think other companies in your sector are facing and explain why these risks and opportunities have been discounted by your company. If you do not know if you are exposed to risks or presented with opportunities related to water, you will be asked to explain why this is not known. Distinction between Risks in Your Own Operations and Risks in your Supply Chain You will be asked separately about risks in your own operations and risks in your supply chain. Your company’s own operations include anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. This covers any internal supply chains between your company’s business units. For example, a business unit within your company that supplies components to another business unit within your company would be considered part of your company’s own operations. Your company’s supply chain is comprised of all external inputs to your own operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels of supply, e.g. component suppliers and the suppliers of materials used to produce those components. Questions 2, 3, 4, and 5 cover risks in your own operations. Questions 6, 7, 8 and 9 cover risks in your supply chain. It is important to understand this distinction and provide relevant information for each set of answers. Although this gives the appearance of making the information request longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by clearly sign‐posting the type of information that is sought. Introductory “Yes/No” Questions Where the answer to any of questions 3.1, 4.1 or 5.1 is “Yes”, please provide individual answers to the subsequent questions as prompted in the ORS. For example, answering “Yes” to the introductory question about your exposure to risks will display the following additional questions:

What are the current and/or anticipated risks, and the associated locations and timescales?

Please describe the ways in which the identified risks affect or could affect your own operations.

Are there any financial implications to the identified risks? If yes, please describe them.

Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs.

Where the answer to questions 3.1, 4.1 or 5.1 is “No”, please explain why you do not consider your company to be exposed to the particular risk. Where the answer to questions 3.1, 4.1 or 5.1 is “Don’t know”, you may explain why not and whether you have any plans to assess these risks in future. How to Interpret/ Use Tables on Risk Questions 3.2, 4.2 and 5.2 ask you to specify in a table the different kinds of water‐related risks facing your company. This format is intended to aid automated data analysis for reporting purposes. The following table is an example of how a company may respond to question 3.2 on Physical Risks:

Risk Country/Region Timescale in Years Further details

Increased water stress or scarcity leading to higher energy or commodity prices

California, USA 1‐5 years

This risk will soon impact our facility in California where water scarcity is leading to higher municipal energy costs. We expect these costs to be passed on to us.

Add row...


The “Risk” column will provide you with a drop‐down list of relevant types of risks. In addition to these, you may include additional risks by choosing the “Other” option. Once the “Other” option is chosen, you may specify the risk in the text box provided. CDP recognizes that many of the risks and opportunities you face will be unique to your operations, and the “Other” option provides a means to discuss these specific factors. The “Country/Region” column requires you to select a country from the drop down list or to select “Other” and fill in the text box provided to specify a region of your own choosing. For example, a water issue that is important to your company may be connected to a specific watershed within or across countries. In such a case, you may specify this local impact rather than one of the listed countries or regions. The list of countries and regions that you entered on the introductory page populates the drop down list. To change the countries or regions that are automatically presented as options, return to the “Introduction” page and modify this list. The “Timescale” column asks you to provide the timescale in which your company expects to experience the selected risk. For example, your company may expect to face one risk in less than five years while another may not be anticipated for more than 30 years. In the first case, select “1‐5 years” and in the second, select “21‐50 years”. In “Further details”, you may provide more specific information on the risk. Attachments with further detail may be added at the bottom of each page. Multiple risks may be selected by adding a row at the bottom of the table. In addition to selecting multiple risks from the drop down list, you may also select the same risk multiple times in certain cases:

If the risk applies to different geographies/markets or timescales. For example, you may select “Increased water stress or scarcity leading to disruption to operations” as a physical risk. You may then select a given country or market and specify that the timescale for the risk to materialize is 1‐5 years. If additional countries or markets are affected by this risk or additional timescales are associated with this risk, you may add additional rows. In the new row you may select the same risk value but select a different country/region and timescale, e.g. 6‐10 years.

When your company may be exposed to the risk in multiple ways. For example, you may select “Mandatory water efficiency, conservation, recycling or process standards leading to higher compliance costs” as a regulatory risk and specify under “Further details” that the risk relates to mandatory water recycling standards. You may then add another row, select “Mandatory water efficiency, conservation, recycling or process standards leading to higher compliance costs” again but specify under “Further details” that this specific risk relates to process standards.

Question Guidance

Question 2: Water‐stress risks in own operations

2.1 Are you able to identify which of your operations are located in water‐stressed regions? If you select “Yes” in answer to 2.1, you are then asked questions 2.2 and 2.3: 2.2 Please state (or estimate) the percentage of your operations located in these regions. 2.3 Please specify the method used to characterize water‐stressed regions in questions 2.1 and 2.2. If you select “No” in answer to2.1, you are then asked question 2.4: 2.4 You may explain here why you are not able to identify which of your operations are located in water‐stressed

regions and whether you have any plans to explore this issue in the future.

Specific Guidance for Question 2.1: Are you able to identify which of your operations are located in water‐stressed regions? Please select “Yes” or “No”. If you answer “Yes”, you will be taken to questions 2.2 and 2.3. If you answer “No”, you will be taken to question 2.4. This question is being asked because sites within water‐stressed regions face higher water‐related risks than sites elsewhere. Recognizing which of your operations are located in such regions is a necessary in order to understand the water‐related risks your company faces.


Definitions Water‐stressed regions: In accordance with WBCSD’s definition, water‐stress is experienced in regions where water availability does not meet the demand from all industrial, agricultural and domestic users. Water‐stress is caused by physical and/or economic water‐scarcity. Physical scarcity occurs when demand for water in a region exceeds the supply due to limited physical availability. Economic scarcity occurs when the low supply is caused by inadequate water management practices due to lack of financial resources or capacity. Although it is difficult to determine a precise measure for water‐stress, the World Resource Institute (WRI) proposes that it is experienced by countries suffering from periodic water shortages, where water supplies are below 1,700 cubic meters/ person. Methods used to characterize water‐stressed regions: WBCSD's Global Water Tool can assist companies in estimating the percentage of their own operations located in water‐stressed regions. This web‐based software allows companies to identify sites in water‐stressed areas, identify how many employees live in countries that lack access to improved water and sanitation, and to identify suppliers in water‐stressed areas (not relevant to these questions but relevant to questions 6.1‐6.4). Please note that this tool provides an assessment of risks related to water availability and does not consider risks associated with water quality and discharges. Access to the tool and additional information is available in the WBCSD website. Company’s own operations: Anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. Specific Guidance for Question 2.2: Please state (or estimate) the percentage of your operations located in these regions.

Type of measurement Percentage

[Drop down list] [Drop down list]

You will be asked to answer this question only if you have answered “Yes” to question 2.1. From the drop down list in the table provided, please select the range that reflects the percentage of your operations in water‐stressed regions and the type of measurement used to calculate this percentage. You may calculate this percentage using one or more of the types of measurement listed or by selecting “Other” to enter another measure. The suggested types of measurement include:

Type of measurement Description

Percentage of revenues ₌

Company revenues generated from operations in water‐stressed regions

Total company revenues

Percentage of water withdrawals (by volume)

₌ Volume of water withdrawn by your company in water‐stressed regions

Total volume of water withdrawn by your company

Percentage of number of facilities

₌ Number of facilities in water‐stressed regions operated by your company

Total number of facilities operated by your company worldwide

Specific Guidance for Question 2.3: Please specify the method used to characterize water‐stressed regions in questions 2.1 and 2.2.

Method Please add any comments here:


From the drop down list in the table provided, please select the method(s) that your company uses to characterize water‐stressed regions and describe each method in the comments column. “Internal company knowledge” and “Mapping tool (such as WBCSD Global Water Tool)” are provided as options. You may also select “Other” to enter another method. Please provide relevant details (including the name) of the methods and tools in the comments box. By being explicit about the adopted methods you will provide more transparent, comprehensible and comparable information.


Definition Mapping tool: A wide variety of mapping tools are available to identify water stressed regions, including the WBCSD Global Water Tool, UN Aquastat, and many national and regional water authorities. These tools may be used by companies in assessing water stress in current or proposed locations. Specific Guidance for Question 2.4: You may explain here why you are not able to identify which of your operations are located in water‐stressed regions and whether you have any plans to explore this issue in the future. You will be asked to answer this question only if you have answered “No” to question 2.1, indicating that you are not able to identify which of your operations are located in water‐stressed regions. In the text box provided, please explain why your company is not able to do so and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.

Question 3: Physical risks in own operations

3.1 Is your company exposed to significant physical risks related to water in its own operations? If you select “Yes” in answer to 3.1, you are then asked questions 3.2 through 3.6: 3.2 What are the current and/or anticipated risks, and the associated locations and timescales? 3.3 Please describe the ways in which the identified risks affect or could affect your own operations. 3.4 Are there financial implications to the identified risks? If you select “Yes” in answer to 3.4, you are then asked question 3.5: 3.5 Please describe them. Regardless of your selection in 3.4, you are then asked question 3.6: 3.6 Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have

been identified, including their impact on operating costs (positive or negative) and CAPEX programs. If you select “No” in answer to 3.1, you are then asked question 3.7: 3.7 You may explain here why you do not consider your company to be exposed to physical risks. If you select “Don’t know” in answer to 3.1, you are then asked question 3.8: 3.8 You may explain here why you do not know if your company is exposed to physical risks and whether you have

any plans to assess these risks in the future.

General Guidance for Question 3: This question has been disaggregated from the single question: “How is your company exposed to physical risks related to water in its own operations?” into eight separate questions (3.1 through 3.8). Although this gives the appearance of making the information request longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by including drop‐down menus and by clearly sign‐posting the type of information that is sought. This approach has also been adopted for questions 4, 5, 6, 7, 8 and 9.

Specific guidance for Question 3.1: Is your company exposed to significant physical risks related to water in its own operations? Please select “Yes”, “No” or “Don’t know”, noting that this question only asks about risks in your own operations. If you answer “Yes”, you will be taken to questions 3.2 through 3.6. If you answer “No”, you will be taken to question 3.7. If you answer “Don’t know”, you will be taken to question 3.8. When answering this question you may want to refer to the indicative list of physical risks provided in question 3.2. Physical risks may be current or anticipated. Answer “Yes” even if you have removed the risk by taking action. Definitions Physical risks: Physical risks may arise from water scarcity (too little water), flooding (too much water) or pollution (lower water quality). Disruption in water supply or decline in water quality can adversely affect operations where water is used for production, irrigation, material processing, cooling, washing and cleaning, and personal consumption. Physical risks can adversely affect production or cause damage to physical assets. For more information on water‐related impacts and risks facing business you may refer to the following sources:


Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. World Business Council for Sustainable Development, Meridian Institute, World Resources Institute (2008),

“Corporate Ecosystem Services Review: Guidelines for Identifying Business Risks and Opportunities Arising from Ecosystem Change”.

JPMorgan (2008), “Watching Water: A Guide to Evaluating Corporate Risks in a Thirsty World”. Pacific Institute (2009), “Water Scarcity and Climate Change: Growing Risks for Business and Investors”. World Wildlife Fund (WWF) (2009), “Understanding Water Risks: A Primer on the Consequences of Water

Scarcity for Government and Business”. Physical risks in your company’s own operations: Your company’s own operations include anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. The impact of physical changes on your company may be direct or indirect, affecting your own operations or other organizations on which your company relies. In this section, please refer only to risks in your own operations. You will be asked to specify physical risks in your supply chain in question 7. Specific Guidance for Question 3.2: What are the current and/or anticipated risks, and the associated locations and timescales?

Risk Location Timescale (years) Further details

[Drop down list] [Drop down list] [Drop down list] [Text entry]

You will be asked to answer this question only if you have answered “Yes” to question 3.1. From the drop down list in the table provided, please select the water‐related physical risks that are likely to affect your business in different geographies and timescales. Please remember that this question asks about risks affecting your own operations. Risks facing your suppliers may be provided in question 7.2. Suggested entries are provided in a drop down list, and you may select “Other” to add a text entry. In the columns provided, select the affected location and expected timescale of the risk. Under further details, please define the nature of each risk. Do not describe the ways in which the risks you identified impact your own operations as this will be covered in Question 3.3. You may add rows to include additional risks. Please review the section of the guidance entitled “How to Interpret/ Use Tables on Risk” on page 17 for more information on how to complete this table. The risks provided in the drop down list are drawn from consultation with companies and investors. These are limited to general categories though the description of the risk may differ between companies and geographies. Please define the nature of each risk in the further details column. In addition to the risk categories provided, CDP recognizes that your company may face additional physical risks that are specific to your operations or industry. You may include these risks by choosing the “Other” option. You will have the opportunity to provide further detail on the risks facing your company’s own operations and the financial implications of these risks in Questions 3.3 and 3.4. Descriptions and examples of the types of risks listed in the drop down box are provided below:

Risk Description and Examples

Increased water stress or scarcity leading to disruption to operations

Increasing water stress or scarcity may adversely affect your company’s operationsin some or all of its facilities. For example, water scarcity may cause disruptions to scheduled production cycles that rely on water inputs. It may also necessitate investment in infrastructure to adjust to shifts in water availability.


Increasing water stress or scarcity may lead to higher energy or commodity pricesfor some or all of your company’s facilities. For example, rate changes may result directly in increased costs of water withdrawals. Company‐owned production of power or materials that relies heavily on water may similarly increase in cost.

Increased water stress or scarcity impacting human health (e.g. of employees)

Increasing water stress or scarcity may impact the health of your employees in some or all of the regions where your company operates. For example, limited drinking water or sanitation availability at your company’s sites may impact employee health.


Declining water quality (due to pollution) leading to higher water‐treatment costs

Declining water quality due to pollution may lead to higher treatment costs for your company’s direct operations or a region in which it operates. For example, if changes to production practices cause a decline in quality of water outputs, new post‐treatment activities may become necessary and add costs directly or indirectly.

Declining water quality (due to salt water intrusion of aquifers) leading to higher water‐treatment costs

Declining water quality due to salt water intrusion of aquifers may lead to higher water‐treatment costs. For example, if the salinity of water withdrawals exceeds standards for use in operations or end products, investment in pre‐treatment may be necessary.

Flooding (due to changing local hydrological conditions) leading to disruption to operations

Flooding caused by changing local hydrological conditions may impact operations. For example, flooding from a local watershed may result in cleanup/repair costs or delay scheduled production.

Flooding (due to rising sea levels) leading to disruption to operations

Flooding caused by rising sea levels may impact operations. For example, flooding along coastal areas may result in cleanup/repair costs or delay scheduled production at facilities in these areas.

Inadequate infrastructure leading to disruption to operations

Infrastructure limitations may adversely impact operations. For example, limited infrastructure in a particular jurisdiction may restrict production capacity on a water‐intensive product line. Limited internal infrastructure may similarly restrict processing and discharge capacity, requiring new infrastructure investment.

Specific Guidance for Question 3.3: Please describe the ways in which the identified risks affect or could affect your own operations. In the text box provided, please expand on the ways in which the risks you identified impact your own operations. This is distinct from the “Further details” column in question 3.2 where you may provide detail on the risks themselves. Question 3.3 is intended to address the resulting implications of these risks for your operations. Do not include financial implications in your answer as this is covered in question 3.4. Do not specify measures taken to manage or adapt to risks as these are covered in question 3.6. There are many ways in which physical risks may affect your own operations. For instance, if you identified “Increased water stress or scarcity leading to disruption to operations” as a physical risk, please explain in brief how the risk is affecting your operations or may do so in the future. Water scarcity may have different business implications and operational impacts by region, business unit or production type. For example, your company might be forced to halt operations in a water‐stressed region due to scarcity but may conduct the same activities in another less constrained region. Specific Guidance for Question 3.4: Are there financial implications to the identified risks? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 3.5. If you answer “No” or “Don’t know”, you will be taken directly to question 3.6. Questions 3.4 and 3.5 focus on the potential costs of physical risks if no action is taken rather than the anticipated costs of managing, mitigating or adapting to these risks. The costs of addressing these risks are covered in question 3.6. Please do not specify any indirect financial risks passed through the supply chain as you are asked to do this in question 7.4. Definition Financial implications of the identified risks: Financial implications associated with physical risks generally imply increased costs related to company operations, such as quantifiable disruptions to scheduled production, increased energy or water prices due to increased water stress or scarcity, and costs to repair damaged infrastructure. Specific Guidance for Question 3.5: Please describe them. You will only be asked this question if you select “Yes” in response to question 3.4. In the text box provided, please expand on any financial implications of the identified risks. Consider the potential costs that could be incurred by your company in light of these risks. Please describe the potential costs of the identified risks rather than the costs of


managing, mitigating or adapting to them as you will be asked to provide this in question 3.6. Please do not specify any indirect financial risks passed through the supply chain as you will be asked to provide this in questions 7.4 and 7.5. Specific Guidance for Question 3.6: Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs. In the text box provided, please describe the measures your company has in place or has planned in order to address the effects of the identified risks. Actions may include increased insurance coverage, investment in new technologies and infrastructure, research and development funding, contingency arrangements, contract re‐negotiation, sharing risks with partner entities, and a variety of other measures. Please include the actual or estimated costs of adapting to the identified risks. For example, if you have identified relocation as a way to minimize risk from physical exposure, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case. Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations. Specific Guidance for Question 3.7: Please explain why you do not consider your company to be exposed to physical risks. You will be asked to answer this question only if you have answered “No” to question 3.1, indicating that you do not consider your company to be exposed to physical risks in its own operations. In the text box provided, please explain why there are no physical risks affecting your company’s own operations. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 3.8: You may explain here why you do not know if your company is exposed to physical risks and whether you have any plans to assess these risks in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 3.1, indicating that you do not know if your company is exposed to significant physical risks in its own operations. In the text box provided, please explain why your company is not able to identify its exposure and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


Question 4: Regulatory risks in own operations

4.1 Is your company exposed to significant regulatory risks related to water in its own operations? If you select “Yes” in answer to 4.1, you are then asked questions 4.2 through 4.6: 4.2 What are the current and/or anticipated risks, and the associated locations and timescales? 4.3 Please describe the ways in which the identified risks affect or could affect your own operations. 4.4 Are there financial implications to the identified risks? If you select “Yes” in answer to 4.4, you are then asked question 4.5: 4.5 Please describe them. Regardless of your selection in 4.4, you are then asked question 4.6: 4.6 Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have

been identified, including their impact on operating costs (positive or negative) and CAPEX programs. If you select “No” in answer to 4.1, you are then asked question 4.7: 4.7 You may explain here why you do not know if your company is exposed to regulatory risks and whether you

have any plans to assess these risks in the future. If you select “Don’t know” in answer to 4.1, you are then asked question 4.8: 4.8 You may explain here why you do not know if your company is exposed to regulatory risks and whether you have any

plans to assess these risks in the future.

General Guidance for Question 4: This question has been disaggregated from the single question: “How is your company exposed to regulatory risks related to water in its own operations?” into eight separate questions (4.1 through 4.8). Although this gives the appearance of making the information request longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by including drop‐down menus and by clearly sign‐posting the type of information that is sought. This approach has also been adopted for questions 3, 5, 6, 7, 8 and 9.

Specific Guidance for Question 4.1: Is your company exposed to significant regulatory risks related to water in its own operations? Please select “Yes”, “No”, or “Don’t know”, noting that this question only asks about risks in your own operations. If you answer “Yes”, you will be taken to questions 4.2 through 4.6. If you answer “No”, you will be taken to question 4.7. If you answer “Don’t know”, you will be taken to question 4.8. When answering this question you may want to refer to the indicative list of regulatory risks provided in question 4.2 below. Regulatory risks may be current or anticipated. Answer “Yes” even if you have removed the risk by taking action. Definitions Regulatory risks: Regulatory risks arise from an expected or unexpected change in or uncertainty regarding law or regulation that may have direct or indirect impacts on your company. A change in law or regulation can increase the costs of operating a business, adversely affect a company’s reputation, reduce the attractiveness of an investment, or change the competitive landscape in which a company operates. Water‐related regulatory measures may include, among others, new water permit structures, rate changes to control withdrawals and discharge, redistribution of water to various users, and restrictions on pollutant types and levels. For more information on water‐related risks facing business, please refer to the following sources: Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. World Business Council for Sustainable Development, Meridian Institute, World Resources Institute (2008),


JPMorgan (2008), “Watching Water: A Guide to Evaluating Corporate Risks in a Thirsty World”. Pacific Institute (2009), “Water Scarcity and Climate Change: Growing Risks for Business and Investors”. World Wildlife Fund (WWF) (2009), “Understanding Water Risks: A Primer on the Consequences of Water Scarcity

for Government and Business”.


Regulatory risk in your company’s own operations: Your company’s own operations include anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. The impact of regulation on your company may affect your operations or organizations on which your company relies. In this section, please refer only to risks in your own operations. You may discuss regulatory risks in your (external) supply chain in question 8. Specific Guidance for Question 4.2: What are the current and/or anticipated risks, and the associated locations and timescales?



You will be asked to answer this question only if you have answered “Yes” to question 4.1. From the drop down list in the table provided, please select the water‐related regulatory risks that are likely to affect your business in different geographies and timescales. Please remember that this question asks about risks affecting your own operations. Risks facing your suppliers may be provided in question 8.2. Suggested entries are provided in a drop down list, and you may select “Other” to add a text entry. In the columns provided, select the affected location and expected timescale of the risk. Under further details, provide any pertinent details on the risk. You may add rows to include additional risks. Please review the section of the guidance entitled “How to Interpret/ Use Tables on Risk” on page 17 for more information on how to complete this table. The risks provided in the drop down list are drawn from consultation with companies and investors. These are limited to general categories though the description of the risk may differ between companies and geographies. Please define the nature of each risk in the further details column. In addition to the risk categories provided, CDP recognizes that your company may face additional regulatory risks that are specific to your operations or industry. You may include these risks by choosing the “Other” option. You will have the opportunity to provide further detail on the risks facing your company’s own operations and the financial implications of these risks in Questions 4.3 and 4.4. Descriptions and examples of the types of risks listed in the drop down box are provided below:

Risk Description / Example

Higher water prices Your company may face increased water prices at some or all of its locations. For example, constraints on water supply may cause regulators to raise the fees that companies pay for water rights or service.

Statutory water withdrawal limits/changes to water allocation principles leading to disruption to operations

With increasing water scarcity and increasing demand, governments may choose to limit the quantity of water that users may withdraw. They may also change the allocation of water rights which may hurt some users and benefit others. They may lead to a disruption to operations due to a decrease in input availability. It might also constrain future growth due to the lack of available water inputs in some areas of operation.

Statutory water withdrawal limits/changes to water allocation principles constraining future growth

Mandatory water efficiency, conservation, recycling or process standards leading to higher compliance costs

To conserve water, regulators may introduce mandatory schemes for efficiency, conservation, recycling, or changes to process water use. These requirements may increase operating costs or necessitate new investment at some or all of your company’s locations.

Regulation of discharge quality/volumes leading to higher compliance costs

To manage environmental risks to water bodies, regulators may raisestandards for water discharge quality or restrict discharge volumes. This can result in increased treatment costs or necessitate changes to production, such as water recycling, to limit water discharges.

Plant site permit (increased difficulty) A variety of water‐related issues may result in permitting difficulties, including supply constraints and changes in discharge requirements. For example, water supply constraints may cause regulators to extend


reviews or deny permitting for water withdrawal that impacts planned growth. Concerns about an operation’s impacts on water quality may also result in delays or denial of permits.

Threat of penalties (e.g. for excessive abstraction of groundwater)

Your company may face regulatory penalties for water impacts resulting from some or all of its operations. A variety of penalty risks are possible, including those for excessive water withdrawals or discharges and those for water pollution above regulated limits.

Product standards leading to loss of sales of existing products/costs developing new products

Standards for water use and quality at the product level are emerging and may continue to develop. These may be relevant to multiple stages of the product life cycle. Potential business impacts include loss of sales of products that do not meet standards and the cost of developing new products that do. Note that loss of sales due to consumer preference or reputational impacts should be discussed in the “Other Risks” category. This question only covers risks related to changes in product standards.

Regulatory uncertainty Uncertainty about future water‐related regulations may impact your business, particularly if the development of new operations or products is contingent upon water access and quality. For example, a facility that today meets all water standards may not meet more stringent standards in the future. If the future standards are uncertain, this may impact planning for new operations.

Specific Guidance for Question 4.3: Please describe the ways in which the identified risks affect or could affect your own operations. In the text box provided, please expand on the ways in which the risks you identified impact your own operations. This is distinct from the “Further details” column in question 4.2 where you may provide detail on the risks themselves. Question 4.3 is intended to address the resulting implications of these risks for your operations. Do not include financial implications in your answer as this is covered in question 4.4. Do not specify measures taken to manage or adapt to risks as these are covered in question 4.6. There are many ways in which regulatory risks may affect your own operations based on the type of regulation and the business implications of compliance. For instance, if you identified “Statutory water withdrawal limits/changes to water allocation principles constraining future growth” as a regulatory risk, please explain in brief how the risk is affecting your operations or may do so in the future. Withdrawal limits may impact some operations but not others. For example, your company might be forced to halt operations in a water‐stressed region due to withdrawal limits but may conduct the same activities in another less constrained region. Specific Guidance for Question 4.4: Are there financial implications to the identified risks? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 4.5. If you answer “No” or “Don’t know”, you will be taken directly to question 4.6. Questions 4.4 and 4.5 focus on the potential costs of regulatory risks if no action is taken rather than the anticipated costs of managing, mitigating or adapting to these risks. The costs of addressing these risks are covered in question 4.6. Please do not specify any indirect financial risks passed through the supply chain as you are asked to do this in question 8.4. Definition Financial implications of the identified risks: Regulatory risks can imply increased compliance costs related to a higher price of water, a higher cost of production due to new standards, product standards decreasing demand for current products and requiring development of new products, regulation of water discharge, payment of fines and investment in new technology.


Specific Guidance for Question 4.5: Please describe them. You will only be asked this question if you select “Yes” in response to question 4.4. In the text box provided, please expand on any financial implications of the identified risks. Consider the potential costs that could be incurred by your company in light of these risks. Please describe the potential costs of the identified risks rather than the costs of managing, mitigating or adapting to them as you will be asked to provide this in question 4.6. Please do not specify any indirect financial risks passed through the supply chain as you will be asked to provide this in questions 8.4 and 8.5. Specific Guidance for Question 4.6: Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs. In the text box provided, please describe the measures your company has in place or has planned in order to address the effects of the identified risks. Actions may include increased alteration of products/processes to meet standards, divesting activities that do not meet required standards, investment in new technologies and infrastructure, research and development funding, contingency arrangements, sharing risks with partner entities, and a variety of other measures. Please include the actual or estimated costs of adapting to the identified risks. For example, if you have identified product redesign as a way to minimize risk from regulatory standards development, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case. Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations. Specific Guidance for Question 4.7: Please explain why you do not consider your company to be exposed to regulatory risks. You will be asked to answer this question only if you have answered “No” to question 4.1, indicating that you do not consider your company to be exposed to regulatory risks in its own operations. In the text box provided, please explain why there are no regulatory risks affecting your company’s own operations. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 4.8: You may explain here why you do not know if your company is exposed to regulatory risks and whether you have any plans to assess these risks in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 4.1, indicating that you do not know if your company is exposed to significant regulatory risks in its own operations. In the text box provided, please explain why your company is not able to identify its exposure and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


Question 5: Other risks in own operations

5.1 Is your company exposed to other significant risks (such as product or reputational risks) related to water in its own operations? If you select “Yes” in answer to 5.1, you are then asked questions 5.2 through 5.6: 5.2 What are the current and/or anticipated risks, and the associated locations and timescales? 5.3 Please describe the ways in which the identified risks affect or could affect your own operations. 5.4 Are there financial implications to the identified risks? If you select “Yes” in answer to 5.4, you are then asked question 5.5: 5.5 Please describe them. Regardless of your selection in 5.4, you are then asked question 5.6: 5.6 Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have

been identified, including their impact on operating costs (positive or negative) and CAPEX programs. If you select “No” in answer to 5.1, you are then asked question 5.7: 5.7 You may explain here why you do not know if your company is exposed to other risks and whether you have any

plans to assess these risks in the future. If you select “Don’t know” in answer to 5.1, you are then asked question 5.8: 5.8 You may explain here why you do not know if your company is exposed to other risks and whether you have any

plans to assess these risks in the future.

General Guidance for Question 5: This question has been disaggregated from the single question: “How is your company exposed to other risks related to water in its own operations?” into nine separate questions (5.1 through 5.8). Although this gives the appearance of making the information request longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by including drop‐down menus and by clearly sign‐posting the type of information that is sought. This approach has also been adopted for questions 3, 4, 6, 7, 8 and 9.

Specific Guidance for Question 5.1: Is your company exposed to other significant risks (such as product or reputational risks) related to water in its own operations? Please select “Yes”, “No” or “Don’t know”, noting that this question only asks about risks in your own operations. If you answer “Yes”, you will be taken to questions 5.2 through 5.6. If you answer “No”, you will be taken to question 5.7. If you answer “Don’t know”, you will be taken to question 5.8. Reporting on “Other risks” can be challenging due to the scope of risks and the way water issues might interrelate with other kinds of risks. It may be beneficial to review your company’s relevant risk management plans and the risks that have already been reported in questions 3 and 4. When answering this question, you may want to refer to the indicative list of other water‐related risks provided in question 5.2. Risks may be current or anticipated. Answer “Yes” even if you have removed the risk by taking action. Definitions Other water‐related risks: “Other risks” covers any water‐related risks not covered by the previous questions on physical and regulatory risks. Examples include litigations risks, product risks due to changes in consumer attitude and reputational risks that may impact decisions made by investors, consumers and current/potential employees concerning your company. For more information on water‐related risks facing business, please refer to the following sources: Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. World Business Council for Sustainable Development, Meridian Institute, World Resources Institute (2008),



for Government and Business”.


Other water‐related risks in your company’s own operations: Your company’s own operations include anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. The impact of other water‐related risks on your company may be direct or indirect, affecting your own operations or other organizations on which your company relies. In this section, please refer only to risks in your own operations. You will be asked to specify other water‐related risks in your (external) supply chain in question 9. Specific Guidance for Question 5.2: What are the current and/or anticipated risks, and the associated locations and timescales?



You will be asked to answer this question only if you have answered “Yes” to question 5.1. From the drop down list in the table provided, please select all other water‐related risks that are likely to affect your business in different geographies and timescales. Please remember that this question asks about risks affecting your own operations. Risks facing your suppliers may be provided in question 9.2. Suggested entries are provided in a drop down list, and you may select “Other” to add a text entry. In the columns provided, select the affected location and expected timescale of the risk. Under further details, provide any pertinent details on the risk. You may add rows to include additional risks. Please review the section of the guidance entitled “How to Interpret/ Use Tables on Risk” on page 17 for more information on how to complete this table. The risks provided in the drop down list are drawn from consultation with companies and investors. These are limited to general categories though the description of the risk may differ between companies and geographies. Please define the nature of each risk in the further details column. In addition to the risk categories provided, CDP recognizes that your company may face additional risks that are specific to your operations or industry. You may include these risks by choosing the “Other” option. You will have the opportunity to provide further detail on the risks facing your company’s own operations and the financial implications of these risks in Questions 5.3 and 5.4. Descriptions and examples of the types of risks listed in the drop down box are provided below.

Risk Description/Example

Product risk (e.g. reduced demand for water‐intensive products)

A variety of water issues can contribute to product risk. For example, customer interest in a product that consumes water during use may decline if the customer is faced with local water shortages or price increases of their own. Resulting business impacts can include lost sales and the costs of redesigning existing products or designing new products. Note that this type of risk differs from that associated with new standards that necessitate changes to products.

Litigation (e.g. by stakeholders with competing water claims)

Litigation risk relates to court actions taken by different stakeholders on issues regarding water consumption, withdrawal and discharge. Litigation from other parties over water issues may present risks such as losing your license to operate, being required to compensate other users, or other actions that nave negative business impacts. For example, another stakeholder with competing water claims may pursue litigation to gain access. Likewise, litigation can occur over excessive discharges of pollutants to bodies of water.

Reputational risk Public information on water‐related problems may have detrimental impacts on a company’s reputation. For example, discharge of excess pollutants to a local water body, conflicts over water claims, or other detrimental impacts on water resources may negatively impact the company’s reputation in a local community or with the general public.


Specific Guidance for Question 5.3: Please describe the ways in which the identified risks affect or could affect your own operations. In the text box provided, please expand on the ways in which the risks you identified impact your own operations. This is distinct from the “Further details” column in question 5.2 where you may provide detail on the risks themselves. Question 5.3 is intended to address the resulting implications of these risks for your operations. Do not include financial implications in your answer as this is covered in question 5.4. Do not specify measures taken to manage or adapt to risks as these are covered in question 5.6. There are many ways in which other risks may affect your own operations. For instance, if you identified “Litigation” as a risk, please explain in brief the impact on your operations. For instance, a court ruling might require a company to pay a fine or prevent it from operating in particular regions. Specific Guidance for Question 5.4: Are there financial implications to the identified risks? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 5.5. If you answer “No” or “Don’t know”, you will be taken directly to question 5.6. Questions 5.4 and 5.5 focus on the potential costs of other risks if no action is taken rather than the anticipated costs of managing, mitigating or adapting to these risks. The costs of addressing these risks are covered in question 5.6. Please do not specify any indirect financial risks passed through the supply chain as you are asked to do this in question 9.4.

Specific Guidance for Question 5.5: Please describe them. You will only be asked this question if you select “Yes” in response to question 5.4. In the text box provided, please expand on any financial implications of the identified risks. Consider the potential costs that could be incurred by your company in light of these risks. Please describe the potential costs of the identified risks rather than the costs of managing, mitigating or adapting to them as you will be asked to provide this in question 5.6. Please do not specify any indirect financial risks passed through the supply chain as you will be asked to provide this in questions 9.4 and 9.5. Specific Guidance for Question 5.6: Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs. In the text box provided, please describe the measures your company has in place or has planned in order to address the effects of the identified risks. Actions may include increased insurance coverage, investment in new technologies and infrastructure, research and development funding, contingency arrangements, contract re‐negotiation, sharing risks with partner entities, and a variety of other measures. Please include the actual or estimated costs of adapting to the identified risks. For example, if you have identified products or processes to discontinue in order to mitigate reputational risk, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case. Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations.

Definition Financial implications of the identified risks: Financial implications associated with the identified risks could include loss of market share or revenue due to changing customer behavior or reputational strain.


Specific Guidance for Question 5.7: Please explain why you do not consider your company to be exposed to other risks. You will be asked to answer this question only if you have answered “No” to question 5.1, indicating that you do not consider your company to be exposed to other risks in its own operations. . In the text box provided, please explain why there are no other risks affecting your company’s own operations. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 5.8: You may explain here why you do not know if your company is exposed to other risks and whether you have any plans to assess these risks in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 5.1, indicating that you do not know if your company is exposed to significant regulatory risks in its own operations. In the text box provided, please explain why your company is not able to identify its exposure and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


RISKS IN SUPPLY CHAIN General Guidance for Reporting Risks in Your Supply Chain Corporate reporting can be challenging as it requires companies to provide statements about their prospective condition. Some organizations, such as accountancy firms and their governing bodies, have published guidance on how to prepare statements that contain forward‐looking information. Before answering the questions covering risks and opportunities you may wish to consult with the financial, legal, and/or compliance department for advice on your company’s general approach to the provision of forward looking statements and information on risks and opportunities. As noted in the introduction to this guidance, water‐specific reporting methods are still in development by multiple organizations, and CDP requests that companies indicate in their responses when different methods are used. However, the GHG Protocol sets out general guiding principles regarding relevance, understandable information and reliability, based on financial reporting principles, that are equally applicable to water. You may use these principles together with the question‐specific guidance provided in this section to provide answers on risks and opportunities. Please consider the following principles specifically from the GHG Protocol:






Information is considered relevant if it contains the detail that users, both internal and external to the company, need for their decision‐making. When considering what to disclose, please identify and report information that is most likely to be of use and benefit to the audience requesting information. CDP takes a broad view of relevance in this first year of reporting water risks and opportunities and recommends that companies consider the general definition of sustainability “materiality” provided in the GRI G3 Guidelines as a starting point. This definition puts the onus on companies to determine a materiality threshold based on internal, industry, and external stakeholder interests. More information is available at the GRI website.. If you need more detailed guidance on how to assess the risks and opportunities your company is facing in relation to water, you might find “The Corporate Ecosystem Services Review: Guidelines for Identifying Business Risks and Opportunities from Ecosystem Change”, published by WBCSD, WRI and the Meridian Institute, useful. If you do not consider your company to be exposed to significant risks or presented with significant opportunities related to water, you will be asked to explain why this is the case. Your answer should specify risks and opportunities that you think other companies in your sector are facing and explain why these risks and opportunities have been discounted by your company. If you do not know if you are exposed to risks or presented with opportunities related to water, you will be asked to explain why this is not known.



Distinction between Risks in Your Own Operations and Risks in your Supply Chain You will be asked separately about risks in your own operations and risks in your supply chain. Your company’s own operations include anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. This covers any internal supply chains between your company’s business units. For example, a business unit within your company that supplies components to another business unit within your company would be considered part of your company’s own operations. Your company’s supply chain is comprised of all external inputs to your own operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels of supply, e.g. component suppliers and the suppliers of materials used to produce those components. Questions 2, 3, 4, and 5 cover risks in your own operations. Questions 6, 7, 8 and 9 cover risks in your supply chain. It is important that you understand this distinction and provide relevant information for each set of answers. Although this gives the appearance of making the information request significantly longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by clearly sign‐posting the type of information that is sought. Introductory “Yes/No” Questions Where the answer to any of questions 7.1, 8.1 or 9.1 is “Yes”, please provide individual answers to the subsequent questions as prompted in the ORS. For example, answering “Yes” to the introductory question about your exposure to risks will display the following additional questions:

What are the current and/or anticipated risks, and the associated locations and timescales?

Please describe the ways in which the identified risks affect or could affect your own operations.

Are there any financial implications to the identified risks? If yes, please describe them.

Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs.

Where the answer to any of questions 7.1, 8.1 or 9.1 is “No”, please explain why you do not consider your company to be exposed to the particular risk. Where the answer to any of questions 7.1, 8.1 or 9.1 is “Don’t know”, you may explain why not and whether you have any plans to assess these risks in future. How to Interpret/ Use Tables on Risk Questions 7.2, 8.2 and 9.2 ask you to specify in a table the different kinds of water‐related risks facing your company. This format is intended to aid automated data analysis for reporting purposes. The following table is an example of how a company may respond to question 3.2 on Physical Risks:

Risk Country/Region Timescale in Years Further details


Australia 6‐10 years

A key component supplier is expected to face higher material costs in the next 10 years due to the water‐intensive production of an agricultural input to their product that comes from a water‐scarce region of Australia.

Add row...

The “Risk” column will provide you with a drop‐down list of relevant types of risks. In addition to these, you may include additional risks by choosing the “Other” option. Once the “Other” option is chosen, you may specify the risk in the text box provided. CDP recognizes that many of the risks and opportunities you face will be unique to your operations, and the “Other” option provides a means to discuss these specific factors.


The “Country/Region” column requires you to select a country from the drop down list or to select “Other” and fill in the text box provided to specify a region of your own choosing. For example, a water issue that is important to your suppliers may be connected to a specific watershed within or across countries. In such a case, you may specify this local impact rather than one of the listed countries. The list of countries that you entered on the introductory page populates the drop down list. To change the countries that are automatically presented as options, return to the “Introduction” page and add or remove countries from this list. The “Timescale” column asks you to provide the timescale in which your company expects its suppliers to experience the selected risk. For example, your suppliers may expect to face one risk in less than a year while another may not be anticipated for more than 30 years. In the first case, select “1‐5 years” and in the second, select “21‐50 years”. In “Further details”, you may provide more specific information on the risk. Attachments with additional detail may be added at the bottom of each page. Multiple risks may be selected by adding a row at the bottom of the table. In addition to selecting multiple risks from the drop down list, you may also select the same risk multiple times in certain cases:

If the risk applies to multiple categories of supplier or individual suppliers. For example, you may select “Increased water stress or scarcity leading to higher energy or commodity prices” but it could only apply to suppliers of a few materials. In this case, you may select it once for the first type of supply and select it again for the second type of supply.

If the risk applies to different geographies or timescales. For example, you may select “Increased water stress or scarcity leading to disruption to operations” as a physical risk facing your supply chain. You may then select the location of this risk as “Australia” and specify that the timescale for the risk to materialize for the supplier(s) is 6‐10 years. If additional supply chain locations are affected by this risk or if different timescales are associated with this risk for various suppliers, you may add rows. In the new row you may select the same risk value but select a different country/region and timescale, e.g. 11‐20 years.

When your company may be exposed to the risk in multiple ways. For example, you may select “Mandatory water efficiency, conservation, recycling or process standards leading to higher compliance costs” as a regulatory risk and specify under “Further details” that the risk relates to mandatory water recycling standards. You may then add another row, select Mandatory water efficiency, conservation, recycling or process standards leading to higher compliance costs” again but specify under “Further details” that this specific risk relates to process standards.

In the “Further details” field, CDP requests you provide only contextual information about the risk you have selected, if necessary.

Question 6: Water use in supply chain

6.1 Are you able to identify which of your key water‐intensive inputs come from water‐stressed regions? If you select “Yes” in answer to 6.1, you are then asked questions 6.2 and 6.3: 6.2 Please state (or estimate) the percentage of your key water intensive inputs that come from water‐stressed

regions. 6.3 Please specify the method used to characterize water‐stressed regions in questions 6.1 and 6.2. Regardless of your answer to 6.1, you are then asked questions 6.4 and 6.4a: 6.4 Do you require your key suppliers to report on their water use, risks and management? 6.4a Please add any comments here.


Specific Guidance for Question 6.1: Are you able to identify which of your key water‐intensive inputs come from water‐stressed regions? Please select “Yes” or “No”, noting that this question only asks about risks in your supply chain. If you answer “Yes”, you will be taken to questions 6.2 and 6.3. If you answer “No”, you will be taken directly to question 6.4. This question is being asked because sites within water‐stressed regions face higher water‐related risks than sites elsewhere. Recognizing which of your inputs come from such regions is necessary for understanding the water‐related risks embedded in your supply chain. Definitions Water‐stressed regions: In accordance with WBCSD’s definition, water‐stress is experienced in regions where water availability does not meet the demand from all industrial, agricultural and domestic users. Water‐stress is caused by physical and/or economic water‐scarcity. Physical scarcity occurs when demand for water in a region exceeds the supply due to limited physical availability. Economic scarcity occurs when the low supply is caused by inadequate water management practices due to lack of financial resources or capacity. Although it is difficult to determine a precise measure for water‐stress, the World Resource Institute (WRI) proposes that it is experienced by countries suffering from periodic water shortages, where water supplies are below 1,700 cubic meters/ person. Methods used to characterize water‐stressed regions: WBCSD's Global Water Tool can assist companies in estimating the percentage of their own operations located in water‐stressed regions. This web‐based software allows companies to identify sites in water‐stressed areas, identify how many employees live in countries that lack access to improved water and sanitation, and to identify suppliers in water‐stressed areas (not relevant to these questions but relevant to questions 6.1‐6.4). Please note that this tool provides an assessment of risks related to water availability and does not consider risks associated with water quality and discharges. Access to the tool and additional information is available in the WBCSD website. Key water‐intensive input: A key input is one that comprises a substantial portion of total inputs and/or is crucial to operations and cannot be easily substituted. A water intensive input is a raw material, component, or service provided by a supplier that relies significantly on water in its production. Reliance may be due to significant withdrawals, discharges, or impacts on water quality. Supply chain: Your company’s supply chain is comprised of all inputs to your own operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels of supply, e.g. component suppliers and the suppliers of materials used to produce those components. Specific Guidance for Question 6.2: Please state (or estimate) the percentage of your key water intensive inputs that come from water‐stressed regions.

Input Percentage Type of measurement Please add any comments here:

[Text entry] [Drop down list] [Drop down list] [Text entry]

You will be asked to answer this question only if you have answered “Yes” to question 6.1. In the table provided, please enter any water‐intensive inputs that come from water‐stressed regions. First you may briefly describe key inputs in the “Input” column. Next, select the percentage of this input coming from water‐stressed regions. Finally, select the type of measurement used to calculate this percent. You may add comments in the text box provided. You may calculate this percentage using one or more of the types of measurement listed or by selecting “Other” to enter another measure. The suggested types of measurement include:

Methodology used for calculation

Description

Percentage of total purchases of that input by value

₌ Value of the identified input

Total value of all inputs purchased by your company

Percentage of total purchase of that input by volume

₌ Volume of the identified input

Total volume of inputs purchased by your company


Specific Guidance for Question 6.3: Please specify the method used to characterize water‐stressed regions in questions 6.1 and 6.2.

Method Please add any comments here:


From the drop down list in the table provided, please select the method(s) that your company uses to characterize water‐stressed regions and describe each method in the comments column. “Internal company knowledge” and “Mapping tool (such as WBCSD Global Water Tool)” are provided as options. You may also select “Other” and enter another method. Please provide relevant details (including the name) of the methods and tools in the comments box. By being explicit about the adopted methods you will provide more transparent, comprehensible and comparable information. Specific Guidance for Question 6.4: Do you require your key suppliers to report on their water use, risks and management? You will be asked to answer this question regardless of your answer to question 6.1. Please select “Yes” or “No”. Regardless of your answer, you may provide comments in question 6.4a. Specific Guidance for Question 6.4a: Please add any comments here. In the text box provided, you may briefly specify the information you ask your suppliers to report, indicate whether it is requested from all or some of your suppliers, and whether they are able to provide you with this information. By asking your suppliers to report water‐related information, you are encouraging them to consider the risks they face and are taking a necessary step towards understanding the risks embedded in your supply chain.

Question 7: Physical risks in supply chain

7.1 Is your supply chain exposed to significant physical risks related to water? If you select “Yes” in answer to 7.1, you are then asked questions 7.2 through 7.6: 7.2 What are the current and/or anticipated risks, and the associated locations and timescales? 7.3 Please describe the ways in which the identified risks affect or could affect the companies in your supply chain. 7.4 Are there financial implications to the identified risks? 7.5 Please describe them. 7.6 Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have

been identified, including their impact on operating costs (positive or negative) and CAPEX programs. If you select “No” in answer to 7.1, you are then asked question 7.7: 7.7 Please explain why you do not consider your supply chain to be exposed to physical risks. If you select “Don’t know” in answer to 7.1, you are then asked question 7.7: 7.8 You may explain here why you do not know if your supply chain is exposed to physical risks and whether you

have any plans to assess these risks in the future.

General Guidance for Question 7: This question has been disaggregated from the single question: “How is your supply chain exposed to physical risks related to water?” into nine separate questions (7.1 through 7.8). Although this gives the appearance of making the information request significantly longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by including drop‐down menus and by clearly sign‐posting the type of information that is sought. This approach has also been adopted for questions 3, 4, 5, 8 and 9.

Specific Guidance for Question 7.1: Is your supply chain exposed to significant physical risks related to water? Please select “Yes”, “No” or “Don’t know” noting that this question only asks about risks in your supply chain. If you answer “Yes”, you will be taken to questions 7.2 through 7.6. If you answer “No”, you will be taken to question 7.7. If you answer “Don’t know”, you will b taken to question 7.8. When answering this question you may want to refer to the indicative list of physical risks provided in question 7.2. Physical impacts may be current or anticipated. Answer “Yes” even if you have removed the risk by taking action.


Definitions Physical risks: Physical risks may arise from water scarcity (too little water), flooding (too much water) or pollution (lower water quality). Disruption in water supply or decline in water quality can adversely affect operations where water is used for production, irrigation, material processing, cooling, washing and cleaning and personal consumption. Physical risks can adversely affect production or cause damage to physical assets. For more information on water‐related impacts and risks facing business you may refer to the following sources:



JPMorgan (2008), “Watching Water: A Guide to Evaluating Corporate Risks in a Thirsty World”. Pacific Institute (2009), “Water Scarcity and Climate Change: Growing Risks for Business and Investors”. World Wildlife Fund (WWF) (2009), “Understanding Water Risks: A Primer on the Consequences of Water

Scarcity for Government and Business”. Physical risks in your company’s supply chain: Your company’s supply chain consists of all inputs to your own operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels, e.g. component suppliers and the suppliers of materials used to produce those components. In this section, questions 7.1‐7.2 will refer to the physical risks directly facing your suppliers. In questions 7.3‐7.6 you will also be asked to specify how the risks facing your suppliers may directly or indirectly affect your company. Specific Guidance for Question 7.2: What are the current and/or anticipated risks, and the associated locations and timescales?



You will be asked to answer this question only if you have answered “Yes” to question 7.1. From the drop down list in the table provided, please select the water‐related physical risks that are likely to affect your supply chain in different geographies and timescales. Please remember that this question asks about risks affecting your suppliers. Risks facing your own operations should be discussed in question 3.2. Suggested entries are provided in a drop down list, and you may select “Other” to add a text entry. In the columns provided, select the affected location and expected timescale of the risk. Under further details, provide any pertinent details on the risk. You may add rows to include additional risks. Please review the section of the guidance entitled “How to Interpret/ Use Tables on Risk” on page 33 for more information on how to complete this table. The risks provided in the drop down list are drawn from consultation with companies and investors. These are limited to general categories though the description of the risk may differ between companies and geographies. Please define the nature of each risk in the further details column. In addition to the risk categories provided, CDP recognizes that your company may face additional physical risks that are specific to your supply chain. You may include these risks by choosing the “Other” option. You will have the opportunity to provide further detail on the risks facing your supply chain and the financial implications of these risks in Questions 7.3 and 7.4.


Descriptions and examples of the types of risks listed in the drop down box are provided below:

Risk Description and Examples

Increased water stress or scarcity leading to disruption to operations

Increasing water stress or scarcity may adversely affect your suppliers. For example, water scarcity may cause disruptions to scheduled production cycles that rely on water inputs. It may also necessitate investment in infrastructure to adjust to shifts in water availability.


Increasing water stress or scarcity may lead to higher energy or commodity prices for your suppliers. For example, rate changes may result directly in increased costs of water withdrawals. Supplier‐owned production of power or materials that relies heavily on water may similarly increase in cost.

Increased water stress or scarcity impacting human health (e.g. of employees)

Increasing water stress or scarcity may impact the health of your suppliers’ employees. For example, limited drinking water or sanitation availability at a supplier site may impact employee health.

Declining water quality (due to pollution) leading to higher water‐treatment costs

Declining water quality due to pollution may lead to higher treatment costs for your suppliers. For example, if changes to production practices cause a decline in quality of water outputs, new post‐treatment activities may become necessary and add costs directly or indirectly.

Declining water quality (due to salt water intrusion of aquifers) leading to higher water‐treatment costs

Declining water quality due to salt water intrusion of aquifers may lead to higher water‐treatment costs. For example, if the salinity of water withdrawals exceeds standards for use in supplier operations or products, investment in pre‐treatment may be necessary.

Flooding (due to changing local hydrological conditions) leading to disruption to operations

Flooding caused by changing local hydrological conditions may impact your suppliers. For example, flooding from a local watershed may result in cleanup/repair costs or delay scheduled production.

Flooding (due to rising sea levels) leading to disruption to operations

Flooding caused by rising sea levels may impact operations. For example, flooding along coastal areas may result in cleanup/repair costs or delay scheduled production at facilities in these areas.

Inadequate infrastructure leading to disruption to operations

Infrastructure limitations may adversely impact your suppliers. For example, limited infrastructure in a particular jurisdiction may restrict production capacity on a water‐intensive product line. Limited internal infrastructure may similarly restrict processing and discharge capacity, requiring new infrastructure investment.

Specific Guidance for Question 7.3: Please describe the ways in which the identified risks affect or could affect the companies in your supply chain. In the text box provided, please expand on the ways in which the risks you identified impact your supply chain. This is distinct from the “Further details” column in question 7.2 where you may provide detail on the risks themselves. Question 7.3 is intended to address the resulting implications of these risks for your operations. Do not include financial implications in your answer as this is covered in question 7.4. Do not specify measures taken to manage or adapt to risks as these are covered in question 7.6. There are many ways in which physical risks may affect your supply chain. For each identified risk, please explain:

1. How the risk is affecting your supply chain or may do so in the future 2. The resulting impacts on your business

Physical risks may impact some suppliers but not others and may impact only a portion of your business activities. For instance, drought might affect farmers who supply hops to a beverage company for their brewed products line. This drought might reduce the farmers’ productivity preventing them from supplying the required quantity or quality of hops to the beverage company, thus impacting its production indirectly.


Specific Guidance for Question 7.4: Are there financial implications to the identified risks? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 7.5. If you answer “No” or “Don’t know”, you will be taken directly to question 7.6. Questions 7.4 and 7.5 focus on the costs that could be incurred by your company as a result of the physical risks facing your suppliers. The costs of addressing these risks are covered in question 7.6. Definition Financial implications of the identified risks: Physical risks facing your suppliers may have financial implications for your company. They may include increased costs of inputs purchased by your company or a decline in productivity due to disruption of inputs. These may affect your cost of production and your company's financial stability. Specific Guidance for Question 7.5: Please describe them. You will only be asked this question if you select “Yes” in response to question 7.4. In the text box provided, please expand on any financial implications of the identified risks. Consider the potential costs that could be incurred by your company in light of the risks facing your suppliers. Please describe the potential costs of the identified risks rather than the costs of managing, mitigating or adapting to them as you will be asked to provide this in question 7.6. Please do not specify any direct financial risks faced in your own operations as you are asked to provide this in question 3.4. Specific Guidance for Question 7.6: Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs. In the text box provided, please describe the measures your company has in place or has planned in order to address effects of the identified risks in your supply chain. Actions may include increased insurance coverage, investment in new technologies and infrastructure, research and development funding, contingency arrangements, contract re‐negotiation, sharing risks with partner entities, and a variety of other measures. More generally, you may comment on how risks may be avoided or shared with other organizations. For example, you may be working to protect partner entities from physical changes. Please include the actual or estimated costs of adapting to the identified risks. For example, if you have replaced a water‐intensive input with a substitute that faces less physical risks as a way to minimize your own risks, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case. Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations. Specific Guidance for Question 7.7: Please explain why you do not consider your supply chain to be exposed to physical risks. You will be asked to answer this question only if you have answered “No” to question 7.1 indicating that you do not consider your supply chain to be exposed to physical risks. In the text box provided, please explain why there are no physical risks affecting your suppliers. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 7.8: You may explain here why you do not know if your company is exposed to physical risks and whether you have any plans to assess these risks in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 7.1, indicating that you do not know if your supply chain is exposed to significant physical risks. In the text box provided, please explain why your company is not able to identify its supply chain’s exposure and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


Question 8: Regulatory risks in supply chain

8.1 Are the companies in your supply chain exposed to significant regulatory risks related to water? If you select “Yes” in answer to 8.1, you are then asked questions 8.2 through 8.6: 8.2 What are the current and/or anticipated regulatory risks, and the associated locations and timescales? 8.3 Please describe the ways in which the identified risks affect or could affect the companies in your supply chain. 8.4 Are there financial implications to the identified risks? 8.5 Please describe them. 8.6 Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have

been identified, including their impact on operating costs (positive or negative) and CAPEX programs. If you select “No” in answer to 8.1, you are then asked question 8.7: 8.7 Please explain why you do not consider your supply chain to be exposed to regulatory risks. If you select “Don’t know” in answer to 8.1, you are then asked question 8.8: 8.8 You may explain here why you do not know if your supply chain is exposed to regulatory risks and whether you

have any plans to assess these risks in the future.

General Guidance for Question 8: This question has been disaggregated from the single question: “How is your company’s supply chain exposed to regulatory risks related to water?” into nine separate questions (8.1 through 8.8). Although this gives the appearance of making the information request significantly longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by including drop‐down menus and by clearly sign‐posting the type of information that is sought. This approach has also been adopted for questions 3, 4, 5, 7 and 9.

Specific Guidance for Question 8.1: Are the companies in your supply chain exposed to significant regulatory risks related to water? Please select “Yes”, “No” or “Don’t know” noting that this question only asks about risks in your supply chain. If you answer “Yes”, you will be taken to questions 8.2 through 8.6. If you answer “No”, you will be taken to question 8.7. If you answer “Don’t know”, you will b taken to question 8.8. When answering this question you may want to refer to the indicative list of physical risks provided in question 8.2. Regulatory impacts may be current or anticipated. Answer “Yes” even if you have removed the risk by taking action. Definitions Regulatory risks: Regulatory risks arise from an expected or unexpected change in or uncertainty regarding law or regulation that may have direct or indirect impacts on your company’s supply chain. A change in laws or regulations can increase the costs of operating a business, adversely affect a company’s reputation, reduce the attractiveness of an investment or change the competitive landscape in which a company operates. Water‐related regulatory measures may include, among others, new water permit structures, rate changes to control withdrawals and discharge, redistribution of water to various users, and restrictions on pollutant types and levels. For more information on water‐related risks facing business, please refer to the following sources: Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. World Business Council for Sustainable Development, Meridian Institute, World Resources Institute (2008),



for Government and Business”. Regulatory risks in your company’s supply chain: Your company’s supply chain consists of all inputs to your own operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels, e.g. component suppliers and the suppliers of materials used to produce those components. In this section, questions 8.1‐8.2 will refer to the regulatory risks directly facing your suppliers. In questions 8.3‐8.6 you will also be asked to specify how the risks facing your suppliers may directly or indirectly affect your company.


Specific Guidance for Question 8.2: What are the current and/or anticipated risks, and the associated locations and timescales?



You will be asked to answer this question only if you have answered “Yes” to question 8.1. From the drop down list in the table provided, please select the water‐related regulatory risks that are likely to affect your supply chain in different geographies and timescales. Please remember that this question asks about risks affecting your suppliers. Risks facing your own operations should be discussed in question 4.2. Suggested entries are provided in a drop down list, and you may select “Other” to add a text entry. In the columns provided, select the affected location and expected timescale of the risk. Under further details, provide any pertinent details on the risk. You may add rows to include additional risks. Please review the section of the guidance entitled “How to Interpret/ Use Tables on Risk in the ORS” on page 33 for more information on how to complete this table. The risks provided in the drop down list are drawn from consultation with companies and investors. These are limited to general categories though the description of the risk may differ between companies and geographies. Please define the nature of each risk in the further details column. In addition to the risk categories provided, CDP recognizes that your company may face additional regulatory risks that are specific to your operations or industry. You may include these risks by choosing the “Other” option. You will have the opportunity to provide further detail on the risks facing your supply chain and the financial implications of these risks in Questions 8.3 and 8.4. Descriptions and examples of the types of risks listed in the drop down box are provided below:

Risk Description / Example

Higher water prices Your suppliers may face increased water prices. For example, constraints on water supply may cause regulators to raise the fees that companies pay for water rights or service.

Statutory water withdrawal limits/changes to water allocation principles leading to disruption to operations

With increasing water scarcity and increasing demand, governments may choose to limit the quantity of water that users may withdraw. They may also change the allocation of water rights which may hurt some of your suppliers and benefit others. They may lead to a disruption to your supply chain due to a decrease in input availability.

Statutory water withdrawal limits/changes to water allocation principles constraining future growth

Mandatory water efficiency, conservation, recycling or process standards leading to higher compliance costs

To conserve water, regulators may introduce mandatory schemes for efficiency, conservation, recycling, or changes to process water use. These requirements may increase operating costs or necessitate new investment for some of your suppliers.

Regulation of discharge quality/volumes leading to higher compliance costs

To manage environmental risks to water bodies, regulators may raise standards for water discharge quality or restrict discharge volumes. This can result in increased treatment costs for your suppliers or necessitate changes to production, such as water recycling, to limit water discharges.

Plant site permit (increased difficulty) A variety of water‐related issues may result in permitting difficulties, including supply constraints and changes in discharge requirements. For example, water supply constraints may cause regulators to extend reviews or deny permitting for water withdrawal that impacts planned growth. Concerns about an operation’s impacts on water quality may also result in delays or denial of permits for your suppliers.

Threat of penalties (e.g. for excessive abstraction of groundwater)

Your suppliers may face regulatory penalties for water impacts resulting from their operations. A variety of penalty risks are possible, including those for excessive water withdrawals or discharges and those for water pollution above regulated limits.


Product standards leading to loss of sales of existing products/costs developing new products

Standards for water use and quality at the product level are emerging and may continue to develop. These may be relevant to multiple stages of the product life cycle. Potential business impacts include loss of sales of products that do not meet standards and the cost of developing new products that do. Note that supplier loss of sales should be discussed in the “Other Risks” category. This question only covers risks related to changes in product standards.

Regulatory uncertainty Uncertainty about future water‐related regulations may impact your suppliers, particularly if the development of new operations or products is contingent upon water access and quality. For example, a facility that today meets all water standards may not meet more stringent standards in the future. If the future standards are uncertain, this may impact suppliers in their planning for new operations.

Specific Guidance for Question 8.3: Please describe the ways in which the identified risks affect or could affect the companies in your supply chain. In the text box provided, please expand on the ways in which the risks you identified impact your supply chain. This is distinct from the “Further details” column in question 8.2 where you may provide detail on the risks themselves. Question 8.3 is intended to address the resulting implications of these risks for your operations. Do not include financial implications in your answer as this is covered in question 8.4. Do not specify measures taken to manage or adapt to risks as these are covered in question 8.6. There are many ways in which regulatory risks may affect your supply chain. For each identified risk, please explain:


Regulatory risks may impact some suppliers but not others and may impact only a portion of your business activities. For instance, statutory withdrawal limits in regions where your key suppliers operate may adversely affect their business productivity preventing them from supplying the required quantity or quality of inputs. This disruption would indirectly impact your company’s production. Specific Guidance for Question 8.4: Are there financial implications to the identified risks? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 8.5. If you answer “No” or “Don’t know”, you will be taken directly to question 8.6. Questions 8.4 and 8.5 focus on the costs that could be incurred by your company as a result of the regulatory risks facing your suppliers. The costs of addressing these risks are covered in question 8.6. Definition Financial implications of the identified risks: Regulatory risks facing your suppliers may have financial implications for your company. They may include increased costs of inputs purchased by your company or a decline in productivity due to disruption of inputs. These may affect your cost of production and your company's financial stability. Specific Guidance for Question 8.5: Please describe them. You will only be asked this question if you select “Yes” in response to question 8.4. In the text box provided, please expand on any financial implications of the identified risks. Consider the potential costs that could be incurred by your company in light of the risks facing your suppliers. Please describe the potential costs of the identified risks rather than the costs of managing, mitigating or adapting to them as you will be asked to provide this in question 8.6. Please do not specify any direct financial risks faced in your own operations as you are asked to provide this in question 4.4.


Specific Guidance for Question 8.6: Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs. In the text box provided, please describe the measures your company has in place or has planned in order to address effects of the identified risks in your supply chain. Actions may include increased insurance coverage, investment in new technologies and infrastructure, research and development funding, contingency arrangements, contract re‐negotiation, sharing risks with partner entities, and a variety of other measures. More generally, you may comment on how risks may be avoided or shared with other organizations. For example, you may be working to protect partner entities from regulatory changes. Please include the actual or estimated costs of adapting to the identified risks. For example, if you have eliminated suppliers that are exposed to high water‐related regulatory risk, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case. Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations. Specific Guidance for Question 8.7: Please explain why you do not consider your supply chain to be exposed to regulatory risks. You will be asked to answer this question only if you have answered “No” to question 8.1 indicating that you do not consider your supply chain to be exposed to regulatory risks. In the text box provided, please explain why there are no regulatory risks affecting your suppliers. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 8.8: You may explain here why you do not know if your supply chain is exposed to regulatory risks and whether you have any plans to assess these risks in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 8.1, indicating that you do not know if your supply chain is exposed to significant regulatory risks. In the text box provided, please explain why your company is not able to identify its supply chain’s exposure and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.

Question 9: Other risks in supply chain

9.1 Are the companies in your supply chain exposed to other significant risks (such as product or reputational risks) related to water? If you select “Yes” in answer to 9.1, you are then asked questions 9.2 through 9.6: 9.2 What are the current and/or anticipated risks, and the associated locations and timescales? 9.3 Please describe the ways in which the identified risks affect or could affect the companies in your supply chain. 9.4 Are there financial implications to the identified risks? 9.5 Please describe them. 9.6 Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have

been identified, including their impact on operating costs (positive or negative) and CAPEX programs. If you select “No” in answer to 9.1, you are then asked question 9.7: 9.7 Please explain why you do not consider your supply chain to be exposed to other risks. If you select “No” in answer to 9.1, you are then asked question 9.8: 9.8 You may explain here why you do not know if your supply chain is exposed to other risks and whether you have

any plans to assess these risks in the future.


General Guidance for Question 9: This question has been disaggregated from the single question: “How is your company’s supply chain exposed to other risks related to water?” into nine separate questions (9.1 through 9.8). Although this gives the appearance of making the information request significantly longer, the intention is in fact to make it easier for companies to provide meaningful, investor‐relevant information by including drop‐down menus and by clearly sign‐posting the type of information that is sought.

Specific Guidance for Question 9.1: Are the companies in your supply chain exposed to other significant risks (such as product or reputational risks) related to water? Please select “Yes”, “No” or “Don’t know” noting that this question only asks about risks in your supply chain. If you answer “Yes”, you will be taken to questions 9.2 through 9.6. If you answer “No”, you will be taken to question 9.7. If you answer “Don’t know”, you will b taken to question 9.8. Reporting on “Other risks” can be challenging due to the scope of risks and the way water issues might interrelate with other kinds of risks. It may be beneficial to review your company’s relevant risk management plans and the risks that have already been reported in questions 7 and 8. When answering this question you may want to refer to the indicative list of physical risks provided in question 9.2. Other impacts may be current or anticipated. Answer “Yes” even if you have removed the risk by taking action. Definitions Other water‐related risks: “Other risks” covers any water‐related risks not covered by the previous questions on physical and regulatory risks. Examples include litigations risks, product risks due to changes in consumer attitude and reputational risks that may impact decisions made by investors, consumers and current/potential employees concerning your company’s suppliers. For more information on water‐related risks facing business, please refer to the following sources: Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. World Business Council for Sustainable Development, Meridian Institute, World Resources Institute (2008),



for Government and Business”. Other risks in your company’s supply chain: Your company’s supply chain consists of all inputs to your own operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels, e.g. component suppliers and the suppliers of materials used to produce those components. In this section, questions 9.1‐9.2 will refer to the other risks directly facing your suppliers. In questions 9.3‐9.6 you will also be asked to specify how the risks facing your suppliers may directly or indirectly affect your company. Specific Guidance for Question 9.2: What are the current and/or anticipated risks, and the associated locations and timescales?



You will be asked to answer this question only if you have answered “Yes” to question 9.1. From the drop down list in the table provided, please select all other water‐related risks that are likely to affect your supply chain in different geographies and timescales. Please remember that this question asks about risks affecting your suppliers. Risks facing your own operations should be discussed in question 5.2. Suggested entries are provided in a drop down list, and you may select “Other” to add a text entry. In the columns provided, select the affected location and expected timescale of the risk. Under further details, provide any pertinent details on the risk. You may add rows to include additional risks. Please review the section of the guidance entitled “How to Interpret/ Use Tables on Risk” on page 33 for more information on how to complete this table.


The risks provided in the drop down list are drawn from consultation with companies and investors. These are limited to general categories though the description of the risk may differ between companies and geographies. Please define the nature of each risk in the further details column. In addition to the risk categories provided, CDP recognizes that your supply chain may face additional risks that are specific to your operations or industry. You may include these risks by choosing the “Other” option. You will have the opportunity to provide further detail on the risks facing your supply chain and the financial implications of these risks in Questions 9.3 and 9.4. Descriptions and examples of the types of risks listed in the drop down box are provided below.

Risk Description/Example

Product risk (e.g. reduced demand for water‐intensive products)

A variety of water issues can contribute to product risk for your suppliers, with indirect impacts on their ability to provide inputs. For example, customer interest in a product that consumes water during use may decline if the customer is faced with local water shortages or rate increases of their own. Resulting business impacts can include lost sales and the costs of redesigning existing products or designing new products. Note that this type of risk differs from that associated with new standards that necessitate changes to products.

Litigation (e.g. by stakeholders with competing water claims)

Litigation risk relates to court actions taken by different stakeholders on issues regarding water consumption, withdrawal and discharge. Litigation from other parties over water issues may present risks such as a supplier losing its license to operate, being required to compensate other users, or other actions that nave negative business impacts. For example, another stakeholder with competing water claims may pursue litigation to gain access. Likewise, litigation can occur over excessive discharges of pollutants to bodies of water.

Reputational risk Public information on water‐related problems may have detrimental impacts on a company’s reputation. For example, discharge of excess pollutants to a local water body, conflicts over water claims, or other detrimental impacts on water resources may negatively impact the company’s reputation in a local community or with the general public.

Specific Guidance for Question 9.3: Please describe the ways in which the identified risks affect or could affect the companies in your supply chain. In the text box provided, please expand on the ways in which the risks you identified impact your supply chain. This is distinct from the “Further details” column in question 9.2 where you may provide detail on the risks themselves. Question 9.3 is intended to address the resulting implications of these risks for your operations. Do not include financial implications in your answer as this is covered in question 9.4. Do not specify measures taken to manage or adapt to risks as these are covered in question 9.6. There are many ways in which other risks may affect your supply chain. For each identified risk, please explain:


Risks may impact some suppliers but not others and may impact only a portion of your business activities. For instance, a court ruling might prevent one of your key suppliers from operating particular regions. This may increase the cost of transporting your inputs or the price you pay for inputs. If you identified “Reputational risk” as a risk facing your suppliers, please note that some stakeholders might view your company as responsible “by association” for your suppliers’ actions. Therefore, reputational damage suffered by your suppliers may also affect your company's image.


Specific Guidance for Question 9.4: Are there financial implications to the identified risks? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 9.5. If you answer “No” or “Don’t know”, you will be taken directly to question 9.6. Questions 9.4 and 9.5 focus on the costs that could be incurred by your company as a result of the regulatory risks facing your suppliers. The costs of addressing these risks are covered in question 9.6. Definition Financial implications of the identified risks: Risks facing your suppliers may have financial implications for your company. They may include increased costs of inputs purchased by your company or a decline in productivity due to disruption of inputs. These may affect your cost of production and your company's financial stability. Specific Guidance for Question 9.5: Please describe them. You will only be asked this question if you select “Yes” in response to question 9.4. In the text box provided, please expand on any financial implications of the identified risks. Consider the potential costs that could be incurred by your company in light of the risks facing your suppliers. Please describe the potential costs of the identified risks rather than the costs of managing, mitigating or adapting to them as you will be asked to provide this in question 9.6. Please do not specify any direct financial risks faced in your own operations as you are asked to provide this in question 5.4. Specific Guidance for Question 9.6: Please describe any actions the company has taken or plans to take to manage or adapt to the risks that have been identified, including their impact on operating costs (positive or negative) and CAPEX programs. In the text box provided, please describe the measures your company has in place or has planned in order to address effects of the identified risks in your supply chain. Actions may include increased insurance coverage, investment in new technologies and infrastructure, research and development funding, contingency arrangements, contract re‐negotiation, sharing risks with partner entities, and a variety of other measures. More generally, you may comment on how risks may be avoided or shared with other organizations. For example, you may be working to protect partner entities from reputational or litigation risks. Please include the actual or estimated costs of adapting to the identified risks. For example, if you are partnering with a supplier to mitigate water‐related risks, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case. Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations. Specific Guidance for Question 9.7: Please explain why you do not consider your supply chain to be exposed to other risks. You will be asked to answer this question only if you have answered “No” to question 9.1 indicating that you do not consider your supply chain to be exposed to other risks. In the text box provided, please explain why there are no other risks affecting your suppliers. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 9.8: You may explain here why you do not know if your supply chain is exposed to other risks and whether you have any plans to assess these risks in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 9.1, indicating that you do not know if your supply chain is exposed to significant other risks. In the text box provided, please explain why your company is not able to identify its supply chain’s exposure and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


DETRIMENTAL IMPACTS, OPPORTUNITIES AND LINKAGES BETWEEN ENERGY/CARBON AND WATER General Guidance for Reporting Detrimental Impacts, Opportunities and Linkages In addition to requesting information on the risks facing your company and its supply chain, CDP Water Disclosure requests information on three related areas:

Question 10: Detrimental impacts experienced by your company in the past five years

Question 11: Water related opportunities

Question 12: Linkages between water‐related measures and measures to address energy and carbon Information is requested on detrimental water impacts to identify your company’s existing exposure to water‐related risks and its ability to address them. The questions on opportunities mirror those asked about risks, including potential operational benefits and the value/cost of pursuing them. Linkages or tradeoffs between energy/carbon and water can illustrate the broader implications of investing in water‐related measures as well as exposure to energy‐ or carbon‐related risks and opportunities that may indirectly create risks and opportunities in the sphere of water. Specific methodologies and guidelines are not referenced for these questions; however, information on water‐related opportunities and water‐energy linkages and strategic approaches to joint management of these resources can be found in the following documents:

Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. Pacific Institute and the United Nations Global Compact (2009), “Climate Change and the Global Water

Crisis: What Businesses Need to Know and Do”. World Business Council for Sustainable Development (2009), “Water, Energy and Climate Change: A

Contribution from the Business Community”. DETRIMENTAL IMPACTS

Question 10: Detrimental water‐related impacts in past five years

10.1 Please describe any detrimental impacts to business related to water your company has faced in the past five

years, their financial impacts and whether they have resulted in any changes to company practices.

Specific Guidance for Question 10.1: Please describe any detrimental impacts to business related to water your company has faced in the past five years, their financial impacts and whether they have resulted in any changes to company practices. In the text box provided, please describe any detrimental water‐related impacts that your company has already experienced in the past five years. This question is included because the impacts companies have faced in the past may provide an indication of future impacts that they and other companies operating in the same industries or geographies may suffer. Furthermore, companies that change their practices due to water‐related impacts demonstrate an ability to continue adapting to such impacts, which is likely to become increasingly necessary as water‐related risks materialize. Your description may cover some or all of the following:

The categories of detrimental impacts resulting from physical, regulatory or other factors Whether the impacts were experienced in your own operations or in your supply chain Their geographic locations and whether these are considered water‐stressed regions How they affected your company financially Whether this has resulted in changes to company practices or policies and a description of these changes

You may add relevant attachments or links supporting your answer in the “Further Information” field.


OPPORTUNITIES

Question 11: Opportunities

11.1 Do water‐related issues present significant opportunities for your company? If you select “Yes” in answer to 11.1, you are then asked questions 11.2 through 11.5: 11.2 In what way(s) do water‐related issues present significant opportunities for your company? 11.3 Are there financial implications associated with the identified opportunities? If you select “Yes” in answer to 11.3, you are then asked question 11.4: 11.4 Please describe them. Regardless of your answer to 11.3, you are then asked question 11.5: 11.5 Please describe any actions your company has taken or plans to take to exploit the opportunities identified,

including the investment needed to take those actions. If you select “No” in answer to 11.1, you are then asked question 11.6: 11.6 Please explain why you do not consider water‐related issues to present significant opportunities for your

company. If you select “Don’t know” in answer to 11.1, you are then asked question 11.7: 11.7 You may explain here why you do not know whether water‐related issues present significant opportunities for your company or whether you intend to assess potential opportunities in the future.

Specific Guidance for Question 11.1: Do water‐related issues present significant opportunities for your company? Please select “Yes”, “No”, or don’t know, noting that this question asks you about opportunities both in your own company and for its suppliers. If you answer “Yes”, you will be taken to questions 11.2 through 11.5. If you answer “No”, you will be taken to question 11.6. If you answer “Don’t know”, you will be taken to question 11.7. Opportunities may be current or anticipated. Answer “Yes” even if you are already taking action to pursue an opportunity. Definitions Water‐related opportunities: Changes in water availability and climatic conditions related to water may provide commercial opportunities to some companies. These opportunities may include increased operational efficiency, cost‐reducing process and/or supply chain re‐design, the creation of new markets for water‐related products, improved finance and/or risk management procedures, enhanced reputation and the ability to influence government policy. Not all companies will be presented with opportunities. It may be beneficial to review how changes that have already taken place have affected your company’s business in the last 10 years to begin determining whether changes are likely to benefit your company in coming years. Opportunities may be presented by the following changes and factors:

Physical changes such as changing temperature and rainfall may extend growing seasons for farmers in some areas. Your organization may have goods and services that enable others to adapt to physical changes.

Regulatory changes in water‐related policy and standards may present opportunities for your company if it is better suited than its competitors to meet regulation, is able to help others to do so by supplying relevant products or is eligible for government subsidies.

Other factors relating to water may also present opportunities for your company, such as changes in consumer attitude or improved image due to your company’s water‐related actions.

For more information on water‐related opportunities facing business you can refer to the following sources:



Pacific Institute (2009), “Water Scarcity and Climate Change: Growing Risks for Business and Investors”.


Specific Guidance for Question 11.2: In what way(s) do water‐related issues present significant opportunities for your company? You will be asked to answer this question only if you have answered “Yes” to question 11.1. In the text box provided, please describe any water‐related opportunities that are likely to affect your own operations and supply chain in different geographies and timescales. You answer may cover some or all of the following:

Water‐related issues that present opportunities to your company and the ways in which they benefit your company. Please do not include the financial implications of these opportunities as you will be asked to do this in question 11.3

Initiatives or products that your company is developing or managing related to water. If products are in the development stage, please detail the water‐related benefits your company anticipates from their development

The timescale in which opportunities are expected to materialize The geographical locations in which your business is likely to benefit from regulatory, physical or other

opportunities Whether your assessment extends to the opportunities for business partners, clients, suppliers and customers

Specific Guidance for Question 11.3: Are there financial implications associated with the identified opportunities? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you will be taken to question 11.4. If you answer “No” or “Don’t know”, you will be taken directly to question 11.5. Questions 11.3 and 11.4 focus on the potential financial benefits of the identified opportunities rather than the costs of pursuing them. This question is being asked to see whether companies are considering how water‐related opportunities might benefit them financially. The costs of pursuing these opportunities are covered in question 11.6. Definition Financial implications associated with identified opportunities: Financial implications associated with opportunities generally imply increased sales or reduced costs. Increased demand for existing products (e.g. due to products meeting efficiency standards) can lead to increased profits while efficiency improvements can reduce costs. You may also benefit from financial opportunities passed to you through your supply chain. Specific Guidance for Question 11.4: Please describe them. You will only be asked this question if you select “Yes” in response to question 11.3. In the text box provided, please expand on any financial implications of the identified opportunities. Consider the potential cost savings, revenues, or other implications throughout your own operations and supply chain. For example, you may identify an opportunity for increased demand for existing products as a result of shifting physical demands for water, regulatory requirements, or a variety of other market forces. In this case, please provide details of the anticipated increase in market size, revenue, or profitability resulting from this new demand. If your company has identified new opportunities as a result of government subsidies, please provide details of the level of subsidy provided. Specific Guidance for Question 11.5: Please describe any actions your company has taken or plans to take to exploit the opportunities identified, including the investment needed to take those actions. In the text box provided, please describe the measures your company has in place or has planned in order to pursue water‐related opportunities throughout your own operations and supply chain. Actions may include measures to reduce water use or increase efficiency, changes to your supply chain, new product development, publicity around water management practices, and a variety of other measures. Please include the actual or estimated costs of pursuing these opportunities. For example, if you are developing a water saving technology, please provide an estimate of the associated costs. Where there is no cost for action, please explicitly state this is the case.


Definitions Operating costs: Expenditures incurred as the result of performing normal business operations. CAPEX programs: Capital expenditure programs. This may include investments in existing or new facilities and other infrastructure directly related to your own operations. Specific Guidance for Question 11.6: Please explain why you do not consider water‐related issues to present significant opportunities for your company. You will be asked to answer this question only if you have answered “No” to question 11.1 indicating that you do not consider water to present significant opportunities for your company. In the text box provided, please explain why there are no apparent opportunities. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 11.7: You may explain here why you do not know whether water‐related issues present significant opportunities for your company or whether you intend to assess potential opportunities in the future. You will be asked to answer this question only if you have answered “Don’t know” to question 11.1, indicating that you do not know if water presents significant opportunities for your company. In the text box provided, please explain why your company is not able to identify such opportunities and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


LINKAGES BETWEEN WATER AND ENERGY/CARBON

Question 12: Linkages between water and energy/carbon

12.1 Has your company identified any linkages between its use of water and energy, or considered any trade‐offs

between the two when taking action to manage water or carbon related risks or to exploit water or carbon related opportunities?

12.2 Please describe them.

Specific Guidance for Question 12.1: Has your company identified any linkages between its use of water and energy, or considered any trade‐offs between the two when taking action to manage water or carbon related risks or to exploit water or carbon related opportunities? Please select “Yes”, “No” or “Don’t know”, noting that this question asks about linkages and tradeoffs throughout your own operations and supply chain. If you answer “Yes”, you will be taken to question 12.2 to provide additional detail. Please note that this question asks about linkages and trade‐offs identified and/or considered when taking actions to manage risks or pursue opportunities related to water and/or carbon. Definitions Linkages and trade‐offs between water and energy: Changes in the physical, regulatory, and market environment are likely to increase pressure to consider both water and energy use. Increasingly, companies will be required to manage water withdrawals, consumption, and discharges simultaneously with management of energy consumption and greenhouse gas emissions. Understanding the linkages and trade‐offs between water and energy will help companies seize the potential of managing them jointly.

Linkages refer to situations in which use or production of water and energy relate to each other. Extracting, processing and treating water requires energy. Likewise, the energy production requires water as an input. In some situations, more efficient use of water can provide energy reduction benefits, and vice versa. Understanding such linkages in your company’s operations may help you manage the use of both resources more efficiently.

Trade‐offs may arise when an action to reduce water‐ or energy‐related impacts has an adverse effect on the use of the other. As an example, mitigating water scarcity through desalination can require large amounts of energy. Conversely, the production of bio‐fuels to reduce greenhouse gas emissions might require large amounts of water. Understanding such tradeoffs is critical in making effective decisions about reduction efforts in both areas.

Information on water‐energy linkages and strategic approaches to joint management of these resources can be found in the following documents:

Intergovernmental Panel on Climate Change (2008), “Climate Change and Water: IPCC Technical Paper VI”. Pacific Institute and the United Nations Global Compact (2009), “Climate Change and the Global Water

Crisis: What Businesses Need to Know and Do”. World Business Council for Sustainable Development (2009), “Water, Energy and Climate Change: A

Contribution from the Business Community”. Specific Guidance for Question 12.2: Please describe them. You will be asked to answer this question only if you have answered “Yes” to question 12.1. In the text box provided, please describe the linkages and tradeoffs you have identified between water and carbon/energy. Your answer may include some or all of the following:

A description of the linkages and/or trade‐offs between water and energy identified by your company Detail on the actions taken that gave rise to these linkages and/or tradeoffs Detail on the decision making process when facing the challenge of a tradeoff or the opportunity of a

linkage between energy and water


SECTION 3: WATER ACCOUNTING General Guidance for Reporting Water Accounting This section requests information on water accounting as currently practiced by your company. Questions 13, 14, and 15 cover measurement of water withdrawals, recycling/reuse and discharges respectively. Question 16 requests disclosure of water intensity metrics by a variety of water use categories and by financial and/or activity related measures. Question 17 requests information on verification or assurance of your company’s withdrawals and discharges. The specific guidance for each question will provide you will relevant information and sources to help you answer the question and provide relevant information on water withdrawals and discharges. Certain questions in the “Water Accounting” section of the information request correspond to the GRI G3 Guidelines as follows:

CDP Water Disclosure Question Number(s)

GRI G3 Indicator

13.1 through 13.3 EN8: Total water withdrawal by source

13.4, 13.4a, and 13.5 EN9: Water sources significantly affected by withdrawal of water

14.1 through 14.3 EN10: Percentage and total volume of water recycled and reused

15.1 and 15.2 EN21: Total water discharge by quality and destination

15.5, 15.5a, and 15.6 EN25: Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff

For more information, visit the GRI website and search for water indicators in the section of the page titled “Indicator Sort Search”. An additional approach to water accounting, “water footprinting”, focuses on measuring water consumption. Although this approach has not been incorporated into the CDP questionnaire, it is currently being developed by the Water

Footprint Network. Additional information on this can be found on the Water Footprint Network website. Question Guidance Question 13: Water withdrawals

13.1 Are you able to provide data for the total water withdrawn in your own operations? If you select “Yes” in answer to 13.1, you are then asked questions 13.2a through 13.2c: 13.2a Please provide figures for total water withdrawal by source type (in cubic meters per year). 13.2b If possible, please also provide data on your water withdrawals broken down by country, region, watershed,

business unit, facility or any other area/unit appropriate to your business. 13.2c Please add any comments here or use this space to report water withdrawals in a different format to that set

out above. If you select “No” in answer to 13.1, you are then asked question 13.3: 13.3 You may explain here why you are not able to report the total water withdrawn in your own operations

and whether you have any plans to put in place systems that would enable you to do so. Regardless of your answer to 13.1, you are then asked questions 13.4 and 13.4a: 13.4 Are any water sources significantly affected by your withdrawal of water? 13.4a Please add any comments here. If you select “Yes” in answer to 13.4, you are then asked question 13.5: 13.5 Please list any water sources significantly affected by your withdrawal of water.


Specific Guidance for Question 13.1: Are you able to provide data for the total water withdrawn in your own operations? Please select “Yes” or “No”, noting that this question asks you only about water withdrawals in your own operations. If you answer “Yes”, you will be taken to question 13.2 (a, b and c). If you answer “No”, you will be taken directly to question 13.3. Questions 13.1 to 13.3 correspond to GRI Indicator EN8. Information on your company’s water withdrawals may be collected from several sources. According to GRI, it can be drawn “from water meters, water bills, calculations derived from other available water data or (if neither water meters nor bills or reference data exist) the organization’s own estimates”. Please provide data from these sources if available. Definitions Total water withdrawn in your own operations: GRI defines total water withdrawals in Indicator EN8 as: “The sum of all water drawn into the boundaries of the reporting organization from all sources (including surface water, ground water, rainwater, and municipal water supply) for any use over the course of the reporting period”. GRI suggests that the total volume of water withdrawn should be reported in cubic meters per year (m³/year) for all sources. It should include both water that was withdrawn directly by your company and water withdrawn through intermediaries (e.g. water utilities). For further information when answering these questions, you may want to refer to GRI’s water performance indicators framework. Search for water indicators in the section titled “Indicator Sort Search”. Specific Guidance for Question 13.2a: Please provide figures for total water withdrawal by source type (in cubic meters per year).

Area/business unit Surface Water (m3/yr)

Ground water (m3/yr)

Rainwater (m3/yr)

Waste water (m3/yr)

Municipal water (m3/yr)

Total (m3/yr)

Company total

[Text entry] [Text entry] [Text entry] [Text entry] [Text entry] [Text entry]

You will be asked to answer this question only if you have answered “Yes” to question 13.1. In the table provided, please enter water withdrawals for your entire company by type of withdrawal. You may also provide an answer in question 13.2c if a different methodology is used than that provided in the table. If the types of withdrawal are not known, you may enter the total withdrawals. If you know the details of only a portion of your withdrawals (e.g. if you know the total amount and the amount of municipal withdrawals as a partial subset), please provide both amounts even if the remaining types of sources are unknown. Otherwise, please ensure that the amounts in all the columns add up to the total. In the columns provided, please report water volumes in cubic meters per year (m³/year). Please refer to the definition of withdrawals that is based on GRI Indicator EN8 and to the following definitions of water withdrawal types. Definitions

6

Surface water: All waters on the surface of the earth, including fresh and salt water, ice and snow, as distinguished from water from the sub‐surface (i.e., groundwater). Surface waters include oceans, lakes, rivers, and wetlands. Ground water: Water in soil beneath the soil surface, usually under conditions where the pressure in the water is greater than the atmospheric pressure, and the soil voids are substantially filled with the water. Rainwater: Rainwater collected directly and stored by your company. Waste water: Water that has been used by your company in a process. Municipal: Water supplied to your company by a municipality or other public provider.

6 Some of these descriptions are taken from a pilot “Water Protocol” published by GRI in 2003. Although this document provides useful definitions, please note that it is not up to date in the water‐reporting guidance it provides. Therefore, it is suggested that for further information on the GRI water indicators you refer to the link provided above.


Specific Guidance for Question 13.2b: If possible, please also provide data on your water withdrawals broken down by country, region, watershed, business unit, facility or any other area/unit appropriate to your business.

Area/business unit Surface Water (m3/yr)

Ground water (m3/yr)

Rainwater (m3/yr)

Waste water (m3/yr)

Municipal water (m3/yr)

Total (m3/yr)

[Drop down list] [Text entry] [Text entry] [Text entry] [Text entry] [Text entry] [Text entry]

In addition to data on water withdrawals for the entire company, you may provide detail on withdrawals for each part of your business (e.g. business units, geographies, or entities). You may also provide an answer in question 13.2c if a different methodology is used. This table is identical to that in question 13.2a but invites you to provide a breakdown of your company’s total water withdrawals by relevant areas of your business (e.g. business units, geographies, or entities). CDP recognizes that the areas/business units you may want to report on may be specific to your operations. You may add areas/business units by selecting the “Other” option. Specific Guidance for Question 13.2c: Please add any comments here or use this space to report water withdrawals in a different format to that set out above: In the text box provided, you may choose to add any comments or use this space to report water withdrawals in a different format than set out in questions 13.2a and b. If you opt to report water withdrawals in the text box, please specify the units of measurement, areas of your company that are being reported, and the methodology used to calculate withdrawals. Specific Guidance for Question 13.3: You may explain here why you are not able to report the total water withdrawn in your own operations and whether you have any plans to put in place systems that would enable you to do so. You will be asked to answer this question only if you answered “No” to question 13.1, indicating that you are not able to provide data for the total water withdrawn in your own operations. In the text box provided, please explain why you are not able to provide this information. You may also indicate whether you have any plans to put in place systems that would enable you to do so. Please remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 13.4: Are any water sources significantly affected by your withdrawal of water? You will be asked to answer this question regardless of your answer to question 13.1. Please select the relevant option “Yes”, “No” or “Don’t know”. Questions 13.4, 13.4a and 13.5 correspond to GRI Indicator EN9. Habitats may be considered “significantly affected” according to several criteria as described below. Definitions Water sources significantly affected by your withdrawal of water: According to GRI’s explanation of Indicator EN9, your withdrawal has a significant effect on water sources if one or more of the following criteria is met:

Your withdrawals account for an average of 5% or more of the annual average volume of a given water body; You withdraw from water bodies that are recognized by professionals to be particularly sensitive due to their

relative size, function, or status as a rare, threatened, or endangered system (or to their support of a particular endangered species of plant or animal); or

You withdraw from a Ramsar‐listed wetland or any other nationally or internationally proclaimed conservation area regardless of the rate or volume of withdrawal.

For further information when answering these questions, you may want to refer to GRI’s water performance indicators framework. Search for water indicators in the section titled “Indicator Sort Search”.


Specific Guidance for Question 13.4a: Please add any comments here. You will be asked to answer this question regardless of your response to question 13.4. In the text box provided, please provide general comments on your company’s tracking of “significantly affected” habitats. If you answered “Yes” to question 13.4, you may include some or all of the following:

A description of the ways in which habitats have been significantly affected The geographical location of these impacts An explanation of whether you have taken or are taking any action to minimize the risks of these impacts If you have not been taking such actions, please specify whether you intend to do so in the future

Specific Guidance for Question 13.5: Please list any water sources significantly affected by your withdrawal of water.

Source Comment


You will be asked to answer this question only if you have answered “Yes” to question 13.4. In the table provided, please list the known water sources that are significantly affected by your company’s withdrawals. Information on protected areas can be obtained from different sources. According to GRI, these sources include: “local or national water‐related ministries or government departments, or … research initiated by the organization or other institutions, such as environmental impact studies.” In the “Comments” column, please indicate the source of information on protected areas used to determine affected habitats.


Question 14: Water recycling and reuse

14.1 Do you know the total volume of water recycled and reused in your own operations? If you select “Yes” in answer to 14.1, you are then asked questions 14.2a and 14.2b: 14.2a Please report the total volume of water recycled and reused in your own operations (in cubic meters per year

and as a percentage of the total water withdrawal reported in question 13.2). 14.2b If possible, please also provide data on your water recycling and reuse broken down by country, region,

watershed, business unit or facility, or any other area/unit appropriate to your business. If you select “No” in answer to 14.1, you are then asked question 14.3: 14.3 You may explain here why you are not able to report the total volumes of water recycled or reused in your own

operations and whether you have any plans to put in place systems that would enable you to do so.

Specific Guidance for Question 14.1: Do you know the total volume of water recycled and reused in your own operations? Please select “Yes” or “No”, noting that this question asks you only about water recycling and reuse in your own operations. If you answer “Yes”, you will be taken to questions 14.2a and 14.2b. If you answer “No”, you will be taken to question 14.3. Questions 14.1 to 14.3 correspond to GRI Indicator EN10. Information on your company’s volume of recycled or reused water can be collected from several sources. According to GRI, these sources are: “water meters, water bills, or (if neither water meters nor bills exist) calculations based on a water audit or inventory, or from a water retailer”. Please provide data from these sources if available. Definitions Recycled or reused water: According to GRI’s explanation of Indicator EN10, recycled or reused water is defined as “an act of processing used water/wastewater through another cycle before discharge to final treatment and/or discharge to the environment”. It specifies three general types of water recycling/reuse practices:

Wastewater recycled back in the same process or higher use of recycled water in the process cycle; Wastewater recycled/reused in a different process, but within the same facility; and Wastewater reused at another of the reporting organization’s facilities.

Total volume of water recycled and reused in your own operations: In accordance with Indicator EN10, this can include water that was treated prior to reuse and water that was not treated prior to reuse. It can also include collected rainwater and wastewater generated by household processes such as washing dishes, laundry, and bathing (Gray water). GRI suggests that:

The total volume of recycled or reused water should be calculated based on the volume of water demand satisfied by recycling/reusing rather than by withdrawals.

The volume of recycled or reused water should be reported in cubic meters per year (m³/year) and also as a percentage of the total water withdrawal reported under Indicator EN8.

For further information when answering these questions, you may want to refer to GRI’s water performance indicators framework. Search for water indicators in the section titled “Indicator Sort Search”. Specific Guidance for Question 14.2a: Please report the total volume of water recycled and reused in your own operations (in cubic meters per year and as a percentage of the total water withdrawal reported in question 13.2).

Area/business unit Volume recycled (m3/yr)

Volume reused (m3/yr)

Total volume recycled/reused (m3/yr)

Total volume recycled/reused as a percentage of withdrawals (%)

Please add any comments here:

Company total [Text entry] [Text entry] [Text entry] [Text entry] [Text entry]


You will be asked to answer this question only if you have answered “Yes” to question 14.1. In the table provided, please enter data on the volumes of water recycled or reused throughout your entire company. If the breakdown between recycling and reuse is not known, you may enter the total volume. Otherwise, please ensure that the recycled and reused volumes add up to the total. In the first three columns, you are asked to report water volumes in cubic meters per year (m³/year). Please refer to the definitions of recycled and reused water that are based on GRI Indicator EN10. In the fourth column, please calculate the percentage of all water consumption that is recycled and reused by dividing the total volume recycled/reused in column 3 by the total water withdrawn in the “Total” column of question 13.2 for the entire company:

Percentage of withdrawals = Total volume recycled/reused

Total water withdrawn

In the final column, you may provide any detail on the calculation of volumes or the percentage. Specific Guidance for Question 14.2b: If possible, please also provide data on your water recycling and reuse broken down by country, region, watershed, business unit or facility, or any other area/unit appropriate to your business.

Area/business unit Volume recycled (m3/yr)

Volume reused (m3/yr)

Total volume recycled/reused (m3/yr)

Total volume recycled/reused as a percentage of withdrawals (%)

Please add any comments here:

[Drop down list] [Text entry] [Text entry] [Text entry] [Text entry] [Text entry]

In addition to data on water withdrawals for the entire company, you may provide detail on withdrawals for selected areas of your business. If the breakdown between recycling and reuse is not known, you may enter the total volume. Otherwise, please ensure that the recycled and reused volumes add up to the total. This table is identical to that in question 14.2a but invites you to provide a breakdown of water recycling and reuse by relevant areas of your business (e.g. business units, geographies, or entities). CDP recognizes that the areas/business units you may want to report on may be specific to your operations. You may add areas/business units by selecting the “Other” option. Specific Guidance for Question 14.3: You may explain here why you are not able to report the total volumes of water recycled or reused in your own operations and whether you have any plans to put in place systems that would enable you to do so. You will be asked to answer this question only if you have answered “No” to question 14.1, indicating that you are not able to report the total volumes of water recycled or reused in your own operations. In the text box provided, please explain why you are not able to provide this information and whether you have plans to explore this topic. Remember that you will not be scored or ranked based on your answer.


Question 15: Water discharges

15.1 Are you able to identify your planned and unplanned discharges of water from your own operations by

destination, by treatment method and by quality in terms of effluent using standard effluent parameters? If you select “No” in answer to 15.1, you are then asked question 15.2: 15.2 You may explain here why you are not able to identify discharges from your own operations by

destination, treatment method and quality and whether you have any plans to put in place systems that would enable you to do so.

Regardless of your answer to 15.1, you are then asked questions 15.3 through 15.6: 15.3 Has your company paid any significant penalties or fines in respect of breaches of regulations relating to

discharges from your own operations during the reporting period? If you select “Yes” in answer to 15.3, you are then asked question 15.4: 15.4 You may provide details here including any actions taken to minimize the risk of future non‐compliance. 15.5 Are any habitats significantly affected by discharges of water and runoff from your operations? 15.5a Please add any comments here. If you select “Yes” in answer to 15.5, you are then asked question 15.6: 15.6 Please list any habitats significantly affected by discharges of water and runoff from your operations.

Specific Guidance for Question 15.1: Are you able to identify your planned and unplanned discharges of water from your own operations by destination, by treatment method and by quality in terms of effluent using standard effluent parameters? Please select “Yes” or “No”, noting that this question asks you only about discharges from your own operations. Please select “Yes” only if you are able to identify discharges by destination, treatment method, and/or quality in terms of standard effluent parameters. If you answer “Yes”, you will be taken directly to questions 15.3 through 15.6. If you are not able to identify any of these, please select “No”. If you answer “No”, you will be taken to question 15.2. Questions 15.1 and 15.2 correspond to GRI Indicator EN21. Planned and unplanned discharges refer to the volume of water discharged and to the quality of this water in terms of pollutants. For a list of standard parameters of water pollutants you may refer to Appendix 3 (pp. 103‐111) of the “Guidance Document for the Implementation of the European PRTR” by the European Commission. Although you will not be asked to input data on your company’s discharges, you may choose to provide links or upload documents with these details in the “Further Information” field. Definitions Water discharges from your own operations: According to GRI’s explanation of Indicator EN21, water discharges are defined as “water effluents discharged over the course of the reporting period to subsurface waters, surface waters, sewers that lead to rivers, oceans, lakes, wetlands, treatment facilities, and ground water”. Discharge of collected rainwater and domestic sewage is not regarded as water discharge. It specified that water effluents are discharged through either:

A defined discharge point (point source discharge); Over land in a dispersed or undefined manner (non‐point source discharge); or Wastewater removed from the reporting organization via truck.

For further information when answering these questions, you may want to refer to GRI’s water performance indicators framework. Search for water indicators in the section titled “Indicator Sort Search”. Specific Guidance for Question 15.2: You may explain here why you are not able to identify discharges from your own operations by destination, treatment method and quality, and whether you have any plans to put in place systems that would enable you to do so. You will be asked to answer this question only if you have answered “No” to question 15.1, indicating that you are unable to identify discharges from your own operations. In the text box provided, please explain why your company is not able to do so and whether you have plans to explore this issue. Remember that you will not be scored or ranked based on your answer.


Specific Guidance for Question 15.3: Has your company paid any significant penalties or fines in respect of breaches of regulations relating to discharges from your own operations during the reporting period? You will be asked to answer this question regardless of your answer to question 15.1. Please select “Yes”, “No” or “Don’t know”. If you answer “Yes”, you will be taken to question 15.4. If you answer “No” or “Don’t know”, you will be taken directly to question 15.5. Recent breaches in regulation may shed light on areas of future regulatory risk. Learning from such incidents may assist your company in taking measures to reduce the volume and/or improve the quality of discharges or to engage with different stakeholders on this issue. In this first year of the information request, CDP asks that you define “significant penalties or fines” in any manner that you are comfortable with. You may choose to report all penalties or fines, or alternatively only those above a certain threshold (such as $1,000 USD). Please clearly identify any threshold that you use. Specific Guidance for Question 15.4: You may provide details here including any actions taken to minimize the risk of future non‐compliance. You will be asked to answer this question only if you have answered “Yes” to question 15.3, indicating that your company has recently paid significant penalties or fines in respect of breaches of regulation relating to its discharges. In the text box provided, please describe actions your have taken to minimize risks of future non‐compliance. You may include some or all of the following:

A description of the breach of regulation, a specification of the geographical location of the offense, the sum of the penalty or fine received, and the regulating body

An explanation on whether you have taken or are currently taking any action to minimize the risks of future non‐compliance. Actions may include upgrading facilities, changing treatment methods, decreasing volume of discharge, increasing volumes of reused or recycled water, engaging with policymakers, or engaging with local communities

If you have not been taking such actions, please specify whether you intend to do so in the future Specific Guidance for Question 15.5: Are any habitats significantly affected by discharges of water and runoff from your operations? Please select “Yes”, “No” or “Don’t know”, considering the definition provided below. If you answer “Yes”, you may provide comments in question 15.5a and will then be taken to question 15.6. If you answer “No” or “Don’t know”, you will still be asked to provide any comments in question 15.5a. Questions 15.5, 15.5a and 15.6 correspond to GRI Indicator EN25. Habitats may be considered “significantly affected” according to several criteria as described below. Definitions Habitats significantly affected by discharges of water and runoffs: According to GRI’s explanation of Indicator EN25, discharges or water runoffs from your operations have a significant effect on habitats if one or more of the following criteria is met:

Discharges account for an average of 5% or more of the annual average volume of the water body; Discharges that, on the advice of appropriate professionals (e.g., municipal authorities), are known to have

or are highly likely to have significant impacts on the water body and associated habitats; Discharges are to water bodies that are recognized by professionals to be particularly sensitive due to their

relative size, function, or status as a rare, threatened, or endangered system (or support a particular endangered species of plant or animal); or

Discharges to a Ramsar‐listed wetland or any other nationally or internationally proclaimed conservation area are considered significantly affecting regardless of the rate of discharge.

For further information when answering these questions, you may want to refer to GRI’s water performance indicators framework. Search for water indicators in the section titled “Indicator Sort Search”.


Specific Guidance for Question 15.5a: Please provide any comments here. You will be asked to answer this question regardless of your response to question 15.5. In the text box provided, please provide general comments on your company’s tracking of “significantly affected” habitats. If you answered “Yes” to question 15.5, you may include some or all of the following:

A description of the ways in which habitats have been significantly affected The geographical location of these impacts An explanation of whether you have taken or are taking any action to minimize the risks of these impacts If you have not been taking such actions, please specify whether you intend to do so in the future

If you answered “No” to question 15.5, please explain why there are no habitats significantly affected by discharges or runoffs from your operations. If you answered “Don’t know” to question 15.5, please explain why your company is not able to identify significantly affected habitats. Remember that you will not be scored or ranked based on your answer. Specific Guidance for Question 15.6: Please list any habitats significantly affected by discharges of water and runoff from your operations.

Habitat Comment


You will be asked to answer this question only if you have answered “Yes” to question 15.5. In the table provided, please list any known habitats that are significantly affected by discharges from your operations. Information on protected areas can be obtained from different sources. According to GRI, these sources include: “local or national water‐related ministries or government departments, or … research initiated by the organization or other institutions, such as environmental impact studies.” In the “Comments” column, please indicate the source of information on protected areas used to determine affected habitats.

Question 16: Water intensity

16.1 Please provide available financial intensity measurements for your water use. 16.2 Please provide available activity‐related intensity measurements for your water use.

General Guidance for Question 16: This question requests data on water‐intensity across a number of factors: by financial or activity‐based metric and by area/business unit or across the entire company. Please provide any water‐intensity data that is known for your company.

Specific Guidance for Question 16.1: Please provide available financial intensity measurements for your water use (water unit / financial unit).

Area / business unit

Water use type

Volume of water

Water unit

Financial metric

Financial quantity

Currency unit

Please provide any contextual details that you consider relevant to understand the units or figures you have provided.

[Drop down list]

[Drop down list]

[Text entry]

[Drop down list]

[Drop down list]

[Text entry]

[Drop down list]

[Text entry]

In the table provided, please describe any available financial intensity measurements for your entire company’s water use or for individual areas/business units. The data entered should describe a measurement of water intensity as water unit / financial unit, as described in the definition below.


In the first column, please select each area of your business to which the intensity measurement applies. This may be a company‐wide figure or divided by region, business unit, or another aspect of your business. The second, third and fourth columns are used to define the water portion of the intensity measurement (water unit / financial unit). Under “Water use type”, please select or enter a water metric, such as “water withdrawals”. Under “Volume of water”, enter the volume of water that is to be attributed to the financial unit. Under “Water unit”, select or enter the unit being used in the water measurement. This is typically cubic meter (m3) but may vary depending on the type of water use. The fifth, sixth and seventh columns are used to define the financial portion of the intensity measurement (water unit / financial unit). Under “Financial metric”, please select or enter the financial measurement being used, such as “Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)”. Under “Financial quantity”, enter the quantity to which the water volume is to be attributed. Under “Currency unit”, select or enter the unit being used in the financial measurement. In the final column, you may provide any details on the metric used or measurement provided. As an example, an intensity of 1,000 m3 of water withdrawals / $ of revenue across the entire company would be entered as follows:


Water use type

Volume of water

Water unit

Financial metric

Financial quantity

Currency unit


Entire company

Withdrawal 1,000 m3 Revenue 1 $ This is the intensity of water withdrawals for the entire company.

At minimum, CDP recommends that a financial intensity figure be reported with reference to Revenue. From International Accounting Standard 18, “Revenue” means the gross inflow of economic benefits (cash, receivables, other assets) arising from the ordinary operating activities of an organization (such as sales of goods, sales of services, interest, royalties and dividends). Revenue may be described in some jurisdictions as “turnover” or “sales”. If your company measures water intensity in additional forms, you are encouraged to report these metrics as well. Definition Financial water intensity measurement: As opposed to “total” water use, which refers to the actual amount of water withdrawn or discharged or to a concentration of pollutants, a financial water intensity metric applies this water amount to a financial measurement. This is represented as:

Water Intensity = Volume of water withdrawn (used/discharged, etc.)

Output (financial) You will have the option to provide financial (economic) and/or activity‐based (physical) metrics. According to the GHG Protocol: “A physical intensity ratio is suitable when aggregating or comparing across businesses that have similar products. An economic intensity ratio is suitable when aggregating or comparing across businesses that produce different products. A declining intensity ratio reflects a positive performance improvement”. Specific Guidance for Question 16.2: Please provide available activity‐based intensity measurements for your water use (water unit / activity).


Water use type

Volume of water

Water unit Activity type


[Drop down list]

[Drop down list]

[Text entry]

[Drop down list]

[Drop down list]

[Text entry]


In the table provided, please describe any available activity‐based intensity measurements for your entire company’s water use or for individual areas/business units. The data entered should describe a measurement of water intensity as water unit / activity‐based unit, as described in the definition below. In the first column, please select each area of your business to which the intensity measurement applies. This may be a company‐wide figure or divided by region, business unit, or another aspect of your business. The second and third and fourth columns are used to define the water portion of the intensity measurement (water unit / activity‐based unit). Under “Water use type”, please select or enter a water metric, such as “water withdrawals”. Under “Volume of water”, enter the volume of water that is to be attributed to the activity. Under “Water unit”, select or enter the unit being used in the water measurement. This is typically cubic meter (m3) but may vary depending on the metric. The fifth column is used to define the activity portion of the intensity measurement (water unit / activity‐based unit). Please select a type of activity from the drop down list or select “Other” to provide a text entry. As an example, an intensity of 10 m3 of water withdrawals / liter of bottled drink produced by the company would be entered as follows:


Water use type

Volume of water

Water unit Activity type


Entire company

Withdrawal 10 m3 Liter of bottled drink produced

This is the intensity of water withdrawals for Product Line X.

In the final column, you may provide any details on the metric used or measurement provided. Definition Activity‐based water intensity measurement: As opposed to “total” water use, which refers to the actual amount of water withdrawn or discharged or to a concentration of pollutants, an activity‐based water intensity metric applies this water amount to a type of activity. This is represented as:

Water Intensity = Volume of water withdrawn (used/discharged, etc.)Output (activity)

You will have the option to provide financial (economic) and/or activity‐based (physical) metrics. According to the GHG Protocol: “A physical intensity ratio is suitable when aggregating or comparing across businesses that have similar products. An economic intensity ratio is suitable when aggregating or comparing across businesses that produce different products. A declining intensity ratio reflects a positive performance improvement”.

Question 17: External verification/assurance

17.1 Please indicate what percentage of your withdrawals and discharges have been verified or assured. Please include the relevant verification/assurance statements as attachments below.

Specific Guidance for Question 17.1: Please indicate what percentage of your withdrawals and discharges have been verified or assured. Please include the relevant verification/assurance statements as attachments below.

Category Percentage verified/assured

Withdrawals [Drop down list]

Discharges [Drop down list]


From the drop down lists in the table provided, please select the ranges that represent the percentage of your company’s withdrawals and discharges that have been verified or assured. Where your company has undertaken external verification of water withdrawals and/or discharges, please indicate the percentage of total withdrawals or discharges that have been verified. You may include any relevant verification statements as attachments in the “Further Attachment” field. Please indicate whether the attached statements refer to water withdrawals and/or discharges. CDP understands that you may seek verification for reasons other than reporting to CDP and that confidential information may be included within your detailed verification statement. If this is the case, you may include a statement from your external verifier confirming the percentage of water withdrawals and/or discharges assured. Definitions Verification/assurance: The GHG Protocol defines verification for greenhouse gas emissions that can be applied to verification of water‐related information:

“Verification involves the assessment of the risks of material discrepancies in reported data. Discrepancies relate to differences between reported data and data generated from the proper application of the relevant standards and methodologies.”

Verification may have different objectives, which are agreed upon by the verifier and the commissioning company. The GHG protocol specifies possible objectives for the verification which, again, may also apply to water verification. These include:

Enhancing stakeholder trust by increasing the credibility of the publicly reported information and demonstrating progress towards targets;

Increasing senior management confidence in reported information on which to base investment and target setting decisions;

Improving internal accounting and reporting practices and facilitating learning and knowledge transfer within the company; and

Preparation for mandatory verification requirements.


IMPORTANT INFORMATION The Carbon Disclosure Project (CDP) has been making information requests relating to carbon and climate change on behalf of investors since 2003, and this is CDP’s first information request relating to water. To find out more about CDP

and the previous responses from other major companies, please refer to the main page of our website. Why is this request from a group of shareholders to a group of companies rather than from an individual shareholder to an individual company? (a) To facilitate ease of reporting for companies by providing one standardized request that requires one response to be

delivered to numerous investors. (b) To receive data in a common format from the largest companies in the world. Which companies have been contacted? This information request has been sent to 302 companies from the Global 500 in the following sectors which have been identified as being water‐intensive or exposed to particular water‐related risk. Please refer to the CDP Water Disclosure website for a full list of the companies that have been invited to participate. Aerospace & Defense Agricultural Products Apparel Retail Apparel, Accessories & Luxury Goods Auto Parts & Equipment Automobile Manufacturers Biotechnology Brewers Building Products Coal & Consumable Fuels Communications Equipment Computer & Electronics Retail Computer Hardware Computer Storage & Peripherals Construction & EngineeringConstruction & Farm Machinery

& Heavy Trucks Construction Materials Consumer Electronics Data Processing & Outsourced

Services Department Stores Distillers & Vintners Diversified Chemicals Diversified Metals & Mining

Diversified Real Estate ActivitiesDrug RetailElectric UtilitiesElectrical Components & Equipment Electronic ComponentsElectronic Manufacturing Services Environmental & Facilities Services Fertilizers & Agricultural Chemicals Food (Distributors; Retail)FootwearGas UtilitiesGeneral Merchandise StoresGoldHeavy Electrical EquipmentHighways & RailtracksHotels, Resorts & Cruise LinesHousehold ProductsHypermarkets & Super CentersIndependent Power Producers

& Energy Traders Industrial ConglomeratesIndustrial Gases

Industrial Machinery Integrated Oil & Gas Multi‐Utilities Office Electronics Oil & Gas (Drilling; Equipment &

Services; Exploration & Production; Refining & Marketing; Storage & Transportation)

Packaged Foods & MeatsPersonal Products Pharmaceuticals Precious Metals & MineralsReal Estate DevelopmentRestaurants Semiconductor EquipmentSemiconductors Soft Drinks Specialty Chemicals Specialty Stores Steel Tobacco Trading Companies & Distributors


APPENDIX A: GLOBAL INDUSTRY CLASSIFICATION STANDARDS (GICS) The Global Industry Classification Standard aims to enable easier investment research and asset management for financial professionals through the creation of standard industry definitions. The GICS structure consists of 10 sectors, 24 industry groups, 68 industries and 154 sub‐industries. Developed by MSCI and Standard & Poor’s (S&P), the structure aims to be universal, accurate, flexible and evolving. The following are definitions of the Parent 10 sectors CDP utilizes in its reports. These can also be found at the MSCI website. Energy Sector: The GICS Energy Sector comprises companies whose businesses are dominated by either of the following activities: The construction or provision of oil rigs, drilling equipment and other energy related service and equipment, including seismic data collection. Companies engaged in the exploration, production, marketing, refining and/or transportation of oil and gas products.

Materials Sector: The GICS Materials Sector encompasses a wide range of commodity‐related manufacturing industries. Included in this sector are companies that manufacture chemicals, construction materials, glass, paper, forest products and related packaging products and metals, minerals and mining companies, including producers of steel.

Industrials Sector: The GICS Industrials Sector includes companies whose businesses are dominated by one of the following activities: The manufacture and distribution of capital goods, including aerospace & defense, construction, engineering & building products, electrical equipment and industrial machinery. The provision of commercial services and supplies, including printing, employment, environmental and office services. The provision of transportation services, including airlines, couriers, marine, road & rail and transportation infrastructure.

Consumer Discretionary Sector: The GICS Consumer Discretionary Sector encompasses those industries that tend to be the most sensitive to economic cycles. Its manufacturing segment includes automotive, household durable goods, textiles & apparel and leisure equipment. The services segment includes hotels, restaurants and other leisure facilities, media production and services and consumer retailing.

Consumer Staples Sector: The GICS Consumer Staples Sector comprises companies whose businesses are less sensitive to economic cycles. It includes manufacturers and distributors of food, beverages and tobacco and producers of non‐durable household goods and personal products. It also includes food & drug retailing companies as well as hypermarkets and consumer super‐centers.

Health Care Sector: The GICS Health Care Sector encompasses two main industry groups. The first includes companies who manufacture health care equipment and supplies or provide health care related services, including distributors of health care products, providers of basic health‐care services and owners and operators of health care facilities and organizations. The second regroups companies primarily involved in the research, development, production and marketing of pharmaceuticals and biotechnology products.

Financials Sector: The GICS Financial Sector contains companies involved in activities such as banking, mortgage finance, consumer finance, specialized finance, investment banking and brokerage, asset management and custody, corporate lending, insurance, financial investment and real estate, including REITs.

Information Technology Sector: The GICS Information Technology Sector covers the following general areas: First, Technology Software & Services, including companies that primarily develop software in various fields such as the Internet, applications, systems, database management and/or home entertainment and companies that provide information technology consulting and services as well as data processing and outsourced services; second, Technology Hardware & Equipment, including manufacturers and distributors of communications equipment, computers & peripherals, electronic equipment and related instruments, and third, Semiconductors and Semiconductor Equipment Manufacturers.

Telecommunications Services Sector: The GICS Telecommunications Services Sector contains companies that provide communications services primarily through a fixed‐line, cellular, wireless, high bandwidth and/or fiber optic cable network.

Utilities Sector: The GICS Utilities Sector encompasses those companies considered electric, gas or water utilities or companies that operate as independent producers and/or distributors of power. This sector includes both nuclear and non‐nuclear facilities.


The table below provides a detailed breakdown of the Parent Sectors companies that will be included in many of the CDP reports.

Parent Sectors Industry Groups Industry Sub‐Industries

Energy Energy Energy Equipment & Services Oil & Gas Drilling

Oil & Gas Equipment Services

Integrated Oil & Gas

Oil & Gas Exploration & Production

Oil & Gas Refining & Marketing

Oil & Gas Storage & Transportation

Coal & Consumable Fuels

Materials Materials Chemicals Commodity Chemicals

Diversified Chemicals

Fertilizers & Agricultural Chemicals

Industrial Gases

Specialty Chemicals

Construction Materials Construction Materials

Containers & Packaging Metals & Glass Containers

Paper Packaging

Metals & Mining Aluminum

Diversified Metals & Mining

Gold

Precious Metals & Minerals

Steel

Paper & Forest Products Forest Products

Paper Products

Industrials Capital Goods Aerospace & Defense Aerospace & Defense

Building Products Building Products

Construction & Engineering Construction & Engineering

Electrical Equipment Electrical Components & Equipment

Heavy Electrical Equipment

Industrial Conglomerates Industrial Conglomerates

Machinery Construction & Farm Machinery & Heavy Trucks

Industrial Machinery

Trading Companies & Distributors Trading Companies & Distributors

Commercial & Professional Services Commercial Services & Supplies Commercial Printing

Environment & Facilities Services

Office Services & Supplies

Diversified Support Services

Security & Alarm Services

Professional Services Human Resources & Employment

Research & Consulting Services

Transportation Air Freight & Logistics Air Freight & Logistics

Airlines Airlines

Marine Marine

Roads & Rail Railroads

Trucking

Transportation Infrastructure Airport Services

Highways & Railtracks

Marine Ports & Services



Consumer Discretionary

Automobiles & Components Auto Components Auto Parts & Equipment

Tires & Rubber

Automobiles Automobile Manufacturers

Motorcycle Manufacturers

Consumer Durables & Apparel Household Durables Consumer Electronics

Home Furnishings

Homebuilding

Household Appliances

Housewares & Specialities

Leisure Equipment & Products Leisure Products

Photographic Products

Textiles, Apparel & Luxury Goods Apparel, Accessories & Luxury Goods

Footwear

Textiles

Consumer Services Hotels Restaurants & Leisure Casinos & Gaming

Hotels, Resorts & Cruise Lines

Leisure Facilities

Restaurants

Diversified Consumer Services Education Services

Specialized Consumer Services

Media Media Advertising

Broadcasting

Cable & Satellite

Movies & Entertainment

Publishing

Retailing Distributors Distributors

Internet & Catalogue Retails Catalogue Retail

Internet Retail

Multiline Retail Department Stores

General Merchandise Stores

Specialty Retail Apparel Retail

Computer & Electronics Retail

Home Improvement Retail

Specialty Stores

Automotive Retail

Home Furnishing Retail

Consumer Staples Food & Staples Retailing Food & Staples Retailing Drug Retail

Food Distributors

Food Retail

Hypermarkets & Super Centers

Food Beverage & Tobacco Beverages Brewers

Distillers & Vintners

Soft Drinks

Agricultural Products

Tobacco Tobacco



Household & Personal Products Household Products Household Products

Personal Products Personal Products

Health Care Healthcare Equipment & Services

Healthcare Equipment & Supplies Healthcare Equipment

Healthcare Supplies

Health Care Providers & Services Health Care Distributors

Health Care Services

Health Care Facilities

Managed Health Care

Health Care Technology Health Care Technology

Pharmaceuticals, Biotechnology & Life Sciences Biotechnology Biotechnology

Pharmaceuticals Pharmaceuticals

Life Sciences Tools & Services Life Sciences Tools & Services

Financials Banks Commercial Banks Diversified Banks

Regional Banks

Thrifts & Mortgage Finance Thrifts & Mortgage Finance

Diversified Financials Diversified Financial Services Other Diversified Financial Services

Multi‐Sector Holdings

Specialized Finance

Consumer Finance Consumer Finance

Capital Markets Asset Management & Custody Banks

Investment Banking & Brokerage

Diversified Capital Markets

Insurance Insurance Insurance Brokers

Life & Health Insurance

Multi‐line Insurance

Property & Casualty Insurance

Real Estate Real Estate Investment Trusts (REITs) Diversified REITs

Industrial REITs

Mortgage REITs

Office REITs

Residential REITs

Retail REITs

Specialized REITs

Real Estate Management & Development Diversified Real Estate Activities

Real Estate Operating Companies

Real Estate Development

Real Estate Services

Information Technology Software & Services Internet Software & Services Internet Software & Services

IT Services IT Consulting & Other Services

Data Processing & Outsources Services

Software Application Software

Systems Software

Home Entertainment Software



Technology Hardware & Equipment Communications Equipment Communications Equipment

Computers & Peripherals Computer Hardware

Computer Storage & Peripherals

Electronic Equipment, Instruments & Components Electronic Equipment & Instruments

Electronic Components

Electronic Manufacturing Services

Technology Distributors

Office Electronics Office Electronics

Semiconductors & Semiconductor Equipment

Semiconductors & Semiconductor Equipment Semiconductor Equipment

Semiconductors

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APPENDIX B: REPORTING BOUNDARY DEFINITIONS When determining reporting boundaries, CDP recommends that companies consult their legal or accounting advisors. For more detailed guidance on determining reporting boundaries and particularly where joint ventures or complex operational structures are concerned, please refer to Chapter 3 of the GHG Protocol. Although this refers to GHG emissions reporting, the general definitions may be applied to water reporting. In brief, under the control approach, an organization measures the volume of its water withdrawals/discharges from operations over which it has financial or operational control. The following text is adapted from the GHG Protocol to refer to water: An organization has financial control over an operation if it has the ability to direct the financial and operating policies of the operation with a view to gaining economic benefits from its activities. Generally an organization has financial control over an operation for water accounting purposes if the operation is treated as a group company or subsidiary for the purposes of financial consolidation. An organization has operational control over an operation if it or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation. Companies can also report their water‐related data based on their economic share. The following text is adapted from the GHG Protocol to refer to water instead of GHG emissions: Under the equity share approach, a company accounts for its water‐related data from operations according to its share of equity in the operation. The equity share reflects the economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. Typically, the share of economic risks and rewards in an operation is aligned with the company’s percentage ownership of that operation, and equity share will normally be the same as the ownership percentage. Where this is not the case, the economic substance of the relationship the company has with the operation always overrides the legal ownership form to ensure the equity share reflects the percentage of economic interest. The principle of economic substance taking precedence over legal form is consistent with international financial reporting standards. As financial control can be quite difficult to establish, the following table has been provided to clarify how water accounting data should be reported in certain situations. The table below is based on a table found on page 19, Chapter 3 of the GHG Protocol (Revised Edition). It has been adapted to refer to water accounting instead of GHG accounting.

Accounting Category

Financial Accounting Definition Accounting for GHG emissions according the GHG Protocol Corporate Standard

Based on Equity Share

Based on Financial Control

Group companies/ subsidiaries

The parent company has the ability to direct the financial and operating policies of the company with a view to gaining economic benefits from its activities. Normally, this category also includes incorporated and non‐incorporated joint ventures and partnerships over which the parents company has financial control

Equity share of volumes of water withdrawn/ discharged/etc.

100% of volumes of water withdrawn/ discharged/etc.

Associated/ affiliated companies

The parent company has significant influence over the operating and financial policies of the company, but does not have financial control. Normally, this category also includes incorporated and non‐incorporated joint ventures and partnerships over which the parent company has significant influence, but not financial control. Financial accounting applies the equity share method to associate/ affiliated companies, which recognizes the parent company’s share of the associate’s profits and net assets.




Non‐incorporated joint ventures/ partnerships/ operations where partners have joint financial control

Joint ventures/ partnerships/ operations are proportionally consolidated, i.e., each partner accounts for their proportionate interest of the joint venture’s income, expenses, assets and liabilities.



Fixed asset investments

The parent company has neither significant influence nor financial control. This category also includes incorporated and non‐incorporated joint ventures and partnerships over which the parent company has neither significant influence nor financial control. Financial accounting applies the cost/ dividend method to fixed asset investments. This implies that only dividends received are recognized as income and the investment is carried at cost.

0% 0%

Franchises Franchises are separate legal entities. In most cases, the franchiser will not have equity rights or control over the franchise. Therefore franchises should not be included in consolidation of GHG emissions data. However, if the franchiser does have equity right or operational/ financial control, then the same rules for consolidation under the equity or control approaches apply.



cdp water disclosure 2010 reporting guidance

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