CDP’s Water Disclosure Project: Who was Conspicuously Absent?

Busy with a GRI reporting benchmarking study, the recent Water Disclosure 2010 Global Report made me think: is this relevant to mining and reporting and who was conspicuously absent? 

While completing a GRI reporting benchmarking study for a mid-tier mining company, I took a quick look at The Water Disclosure 2010 Global Report by the Carbon Disclosure Project. This study was completed on behalf of 137 investors with assets of US$16 trillion. As usual for these sorts of efforts, CDP sent its first annual water questionnaire to a subset (302) of the world’s 500 largest companies in the FTSE Global Equity Index Series. The ‘short list’ focused on sectors deemed to be water intensive or considered particularly exposed to water-related risks.

Walk in the extractives: 16 responses were from the metals and mining sector (59% response rate of sector members surveyed) and 15 oil & gas companies (29% response rate, amongts the lowest response rates). I must admit that neither of this grabbed much of my attention. But soon I realized that, in addition to 150 responders who were part of CDP’s target group, 25 other companies responded on a voluntary basis. Now this caught my attention as it suggests - perhaps - a sense of accountability and leadership.

Voluntary responses in the mining sector were provided by Exxaro Resources, HudBay Minerals, Impala Platinum, Norsk Hydro, and Northam Platinum. Let me tip my hat here to these companies before listing the companies which were surveyed but failed to submit a response or declined to participate (DP):

GMK Norilsk Nickel, Grupo Mexico, JFE Holdings, Nippon Steel Metals (DP), Novolipetsk, Southern Copper Corporation (now part of Grupo Mexico?), Steel Authority of India, Teck, Vale Metals & Mining (DP).

Why did some 40% of surveyed companies in the mining sector decide NOT to respond? Some (most?) of them are sustainability reporters and – I suspect – will have looked at water related issues as it is critical to environmental  performance areas. Is this simply a sign of questionnaire fatigue? And why did groups like HudBay from Canada decide to provide voluntary disclosure?

2 Comments to CDP’s Water Disclosure Project: Who was Conspicuously Absent?

  1. Michael Rea (a sustainability reporting, SRI index and assurance expert based in South Africa) offered the following comments explaining the perfect response rate (100%) of surveyed mining companies based in South Africa:

    “1. South Africa is a ‘water scarce environment’, and the current state of our domestic water mismanagement is at a level where access to potable water is diminishing at an alarming rate. Thus, stakeholder pressure to discuss water use and/or contamination is almost as significant as air emissions…which currently has a much higher PR value amongst the general public.

    2. South Africa does have fairly strict water legislation…although not the capacity to police compliance…and leading companies will do all they can to ensure that they at least meet their legal requirements…even if they know that nobody will bang on their door to check their homework.

    3. In the mining context, a water license is virtually of equal importance to the mineral rights and/or land use permits…because it is nigh on impossible to mine and/or process minerals in the absence of water.

    4. The smarter mining and/or resources extractive companies (e.g., pulp & paper and oil & gas sectors) will be reporting on their water use and/or effluent more to meet their own internal information requirements (i.e., to proactively manage the ensuing risk of lack of access to water) than to satisfy external stakeholder needs. Yes, the JSE SRI Index and Dow Jones Sustainability Index (which most JSE SRI Index participants will also attempt to participate in) require water data, but the collection and collation of water data tends to have a lot more to do with ‘Risk Management 101’. Water scarcity for most mining companies factors within their ‘Most Material Issues’ and/or ‘Highest Priority Risks’, and they therefore are able to provide meaningful responses to queries because of their entrenched systems to monitor and manage their water footprint.”

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