Backup and Storage

Firms fail to plan for water-related risks

Many firms may be at risk of water damage, new research reveals.

More than half of top firms are failing to plan for water-related risks, a new report suggests.

According the Carbon Disclosure Project Water Disclosure Global Report, some 57 per cent of the 190 publicly listed companies surveyed say that their board members overlook water policies, strategies or plans, possibly leading to the risk of flooding.

The report revealed that more than half (59 per cent) of respondents reported that their companies were exposed to risks such as flooding, water scarcity and reputational damage.

Furthermore, the majority of these potential water-related risks were reported as being likely to occur in the foreseeable future, highlighting the need for secure document storage and offsite back-up for important documents that could be destroyed by floodwater.

Almost two-thirds (64 per cent) of risks in direct operations and 66 per cent of risks in the supply chain were identified as possibly happening between now and 2016.

More than one in three (38 per cent) of respondents said they have already experienced water-related damage to their business such as disruption to their operations due to severe weather and water shortages.

The risk of water damage was significantly high among energy companies, with nearly three-quarters (72 per cent) of these firms reporting a high likelihood of damage.

However, energy companies were found to report the lowest levels of board oversight when it comes to water policies, strategies or plans (36 per cent).

Paul Simpson, chief executive of the Carbon Disclosure Project, pointed out that some of the biggest multinational firms have already experienced the negative effects that water-related damage can have on their profitability and bottom line.

"The findings illustrate the very near-term nature of water-related impacts; we need to see more companies understand that water is a critical issue, requiring greater board-level attention than it currently receives," he said.

"Those corporations that navigate the challenges effectively will be able to profit from the significant opportunities that result from a robust water strategy."