Delivering information on water risk

AQUEDUCT
World Resources Institute IGEL, March 22, 2011

Water: the new carbon?

Global commodity

Multiple attributes:
Spatial Temporal Social, environmental

Water: the new oil?

Price = scarcity value

Price << scarcity value

Underinvestment Inefficient use

Irrelevant disclosure
many companies are not including material water risks and performance data in their financial filings, nor are they providing local-level water data, particularly in the context of facilities in water-stressed regions.

Worsening scarcity 1975 2025 2000

m3/person/year
Extreme Scarcity Scarcity <500 500-1,000 Stress 1,000-1,700 Adequate Abundant 1,700-4,000 4,000-10,000 Surplus >10,000 Ocean/ Inland Water No Data

With permission from Coca Cola

Innovation & scarcity

What is AQUEDUCT ?
An information platform for public-private action for more efficient and sustainable water management

A standard to measure, map and compare local water risk and opportunity

The worlds best database with localized data on water risk and opportunity

Private interest public good

Better water risk information

Broadly defined: physical regulatory social-economic governance

Lower water dependency

Inside the fence improvements: siting efficiency gains smaller impacts sourcing reporting / disclosure

Higher water security

Outside the fence engagement & solutions: water policy reform spatial planning hydro-smart business models, investments technology development infrastructure finance

Context, intensity, response

WBCSD Global Water Tool
Geographic water risk (context)

Veolia / Water Impact Index

Water Footprint Network Global Reporting Initiative Alliance For Water Stewardship

Water footprint (intensity)

Water governance (response)

GEMI Local Water Tool Water Disclosure Project

CEO Water Mandate

AQUEDUCT
Facility/project level water management Portfolio risk management

AQUEDUCT
Internally focused (water dependency or footprint)

Externally engaged (water security)

AQUEDUCT
Snaphots Trends & projections

AQUEDUCT structure

Yellow River prototype

Interactive demo

Video demo

Access & growth risk

One cost risk: dirty water

One disruption risk: no flow

AQUEDUCT risk drivers (1)

AQUEDUCT risk drivers (2)

AQUEDUCT risk drivers (3)

AQUEDUCT steps
Aggregated risk scores
Weights assigned to indicators

Indicator risk scores

(10 pt scale; -2 = 1; +2 = 9

Normalized data (area/basin) Raw data assigned to areas Definition of units of analysis (areas)

AQUEDUCT steps
Aggregated risk scores
Weights assigned to indicators

Indicator risk scores

(10 pt scale; -2 = 1; +2 = 9

Normalized data (area/basin) Raw data assigned to areas Definition of units of analysis (areas)

AQUEDUCT steps
Aggregated risk scores
Weights assigned to indicators

Indicator risk scores

(10 pt scale; -2 = 1; +2 = 9

Normalized data (area/basin) Raw data assigned to areas Definition of units of analysis (areas)

AQUEDUCT steps
Aggregated risk scores
Weights assigned to indicators

Indicator risk scores

(10 pt scale; -2 = 1; +2 = 9

Normalized data (area/basin) Raw data assigned to areas Definition of units of analysis (areas)

AQUEDUCT steps
Aggregated risk scores
Weights assigned to indicators

Indicator risk scores

(10 pt scale; -2 = 1; +2 = 9

Normalized data (area/basin) Raw data assigned to areas Definition of units of analysis (areas)

AQUEDUCT steps
Aggregated risk scores
Weights assigned to indicators

Indicator risk scores

(10 pt scale; -2 = 1; +2 = 9

Normalized data (area/basin) Raw data assigned to areas Definition of units of analysis (areas)

AQUEDUCT outputs
Sector/company risk profiles & aggregation

Hotspot maps linked to local water news

Company water risk management and disclosure

Online, interactive, everimproving database

Platform for publicprivate action

Water risks
Point of impact: Type of risk:

Supply chain

Production process

Product use

Physical

Commodity price spikes

Regulatory (+ litigation)
Water quality standards constraining power generation

Reputation

Competition with social uses

Risk & opportunity

Seizing opportunity

Water services
- Solution providers (e.g. GE)

Water reforms, infrastructure

- Consultants, construction companies, banks

Short term

Long term

Water efficiency
- Water consuming sectors (e.g. F&B)

Water security
- Water withdrawing sectors (e.g. power)

Reducing risk

AQUEDUCT Alliance
AQUEDUCT funders (by invitation)
Lead sponsors (>$250,000) Sector sponsors ($100,000 - $200,000)
Logo Logo Logo Logo Logo Logo

Supporters ($25,000 - $75,000)

United Technologies Dutch government

Data by Secretariat and project manager

AQUEDUCT partners (by invitation)

Design working group
selection river basins refinement universal indicators review aggregation algorithm development components: Collector, Reporter, News

Sector working group

establishment indicator weights for specific sectors , incl. power; oil & gas; mining; food & beverage; agribusiness; manufacturing

Validation working group

road-testing geographic water risk readings road-testing other components: Collector, Reporter

Funder recognition and advisor roles within the Aqueduct Alliance will be reviewed annually.

Why AQUEDUCT?
1
1 1 1

1 1

Water prices too Better information Water resources low to signal required to act poorly governed scarcity &To create public-private action strategically on encourage more efficient and sustainable water risks for investment, water management conservation

Who will do what differently?

Companies Optimize strategy & distribution of plants, suppliers & product markets Target investments; engagement efforts & solutions

Investors Help differentiate between companies based on potential exposure to water risk & opportunity

Governments More hydrosensible urban & land use planning Better target infrastructure investment & water policies

Company ranking