CDP Water FAQ

Water Disclosure Project (WDP)

FAQ

What is the aim of WDP?

WDP seeks to raise awareness about water as a strategic business issue and to encourage companies to measure, manage, disclose and ultimately optimise their water use and minimise their exposure to water‐related risk.

Why is water a business issue?

Water scarcity is becoming an increasingly important strategic issue for businesses. Many organisations have already experienced first‐hand the reputational, financial and regulatory risks that water scarcity presents. Through increased disclosure, CDP believes that companies will be better positioned to both understand and manage these risks and that investors will benefit from an increased understanding of the issue.

Why launch WDP?

Water is a critical issue and the absence of reliable information about water use by companies limits both investors’ and companies’ understanding of the risks and of the opportunities for improvement. The expansion of CDP initiatives across the world’s largest stock markets clearly demonstrates the support for climate‐related risk disclosure, and CDP’s questionnaire is now a generally accepted part of many companies’ annual reporting cycle.

Creating a global initiative to increase business disclosure of water‐related risk will: ∙Raise businesses’ awareness and understanding of their own issues, risks and opportunities ∙Support efforts to develop standard measures and performance benchmarks

∙Provide investors, regulators and other stakeholders with better information

∙Raise general awareness of water‐related issues

∙Encourage action and dialogue

What type of information will WDP ask for and what standards will WDP adhere to?

WDP will follow a similar format to the Carbon Disclosure Project (CDP). It will invite investors to become signatories to an annual information request (or questionnaire) issued to large publicly quoted companies asking them to disclose (via a dedicated website) the impacts of water on their business.

The WDP questionnaire will be in a similar format to the CDP questionnaire and will cover: ∙risks and opportunities in own operations and supply chains (physical, regulatory and reputational)

∙water metrics in own operations and supply chains (footprint, exposure to water stress etc) ∙water management, governance and improvement plans

WDP will not seek to develop standards in the complex area of water risk analysis or footprinting, but will work with the leading global organizations to facilitate the adoption of emerging best practice in this area. CDP has already worked with many expert organizations (e.g. GRI, WRI, WBCSD, Pacific Institute, CEO Water Mandate, WWF, WEF and the Water Footprint Network) in establishing the pilot water disclosure module trialled by several CDP Supply Chain and Public Procurement members in 2008 and 2009, and this close co‐operation will continue over the expected evolution of WDP.