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2016 – Water risks that could impact companies’ supply chain

Row numberAccount NumberCompany NameIncorporated CountryCDP ProgramReporting YearAccessIndustry Activity GroupGiCS SectorCountryRiver basinRisk driverPotential impactDescription of impactTimeframeLikelihoodMagnitude of potential financial impactResponse strategyCosts of response strategyDetails of strategy and costs
2014311DanoneFranceWater2016PublicFood & Beverage ProcessingConsumer StaplesRest of worldOther: World wideReputational-Negative media coverageBrand damage- The Group is exposed to reputation environmental risks. In the short term regarding our KOL risk mapping tool, water is one of the main topics prioritized at group level. In Mexico and Indonesia, specific items could be raised by NGOs.-In countries where consumers and NGO's have a high sensitivity, there is a risk of being accused of greenwashing. In the short term, our Danone KOL risk mapping tool has identified 3 countries with high communication risk level: France, Belgium and UK.1-3 yearsUnlikelyMediumAlignment of public policy positions with water stewardship goals; Engagement with community; Engagement with customers; Engagement with public policy makers; Engagement with other stakeholders in the river basindifficult to accessSince 2010, Danone has involved a panel of experts and external stakeholders (Public authorities, national or local government; Investors Shareholders; Business stakeholders; suppliers,; ompetitors; Key opinion leaders NGOs, activist groups, Medias; Consumers and public opinion trends ...), to organize its strategic thinking and help define its long-term road map. This panel will continue its work as the plan is rolled out. Danone also designed a Nature training module in 2013 to raise awareness on the strategy withinDanone. This module will be expanded and made available fo all staff.Lastly, to strengthen the connection between nature and business, Danone released a Guide to Environmental Claims in 2011 in collaboration with the Futerra agency, to encourage responsible communicationby the different subsidiaries andbrands. This tool is now available to Danone’s teams via a new interactive website .
2024311DanoneFranceWater2016PublicFood & Beverage ProcessingConsumer StaplesRest of worldOther: Rest of the worldReputational-Community oppositionDisruption to salesRisks associated with the retailer's commitments: retailers are increasingly engaging in environmental plans, which could turn into supplier's preferences. Metro and Arcos Dorados are requesting us to disclose our water consumption management and risk & opportunity assessment at local level via CDP supply chain questionnaire. One of biggest Business Units supplying to Metro in dairy is Russia and Dairy Brazil for Arcos Dorados.>6 yearsProbableMediumEngagement with customers; Establish site-specific targets; Promote best practice and awarenessBy responding to Metro & Arcos Dorados request through CDP supply chain we are showing how we manage the risks and opportunities water challenges present. We are showing transparency and potential collaboration projects to tackle risks, take advantage of opportunities and ensure business continuity.
2036161Fast Retailing Co., Ltd.JapanWater2016PublicRetailingConsumer DiscretionaryChinaYangtze River (Chang Jiang)Regulatory-Increased difficulty in obtaining withdrawals/operations permitPlant/production disruption leading to reduced outputThere is concern that water shortage might affect production as well as possible cost increase and affecting product delivery timing.(Second to major impacts: Higher operating costs, brand damage, supply chain disruption)UnknownUnknownUnknownEngagement with suppliers; Promote best practice and awareness; Tighter supplier performance standardsResearch is needed for strategy planning. Research costs are unknown.We plan to make research for upstream suppliers.
2044311DanoneFranceWater2016PublicFood & Beverage ProcessingConsumer StaplesRest of worldOther: Rest of the worldOther: Customers requirementsDisruption to salesRisks associated with the retailer's commitments: retailers are increasingly engaging in environmental plans, which could turn into supplier's preferences. Metro and Arcos Dorados are requesting us to disclose our water consumption management and risk & opportunity assessment at local level via CDP supply chain questionnaire. One of biggest Business Units supplying to Metro in dairy is Russia and Dairy Brazil for Arcos Dorados.>6 yearsProbableMediumEngagement with customers; Establish site-specific targets; Promote best practice and awarenessBy responding to Metro & Arcos Dorados request through CDP supply chain we are showing how we manage the risks and opportunities water challenges present. We are showing transparency and potential collaboration projects to tackle risks, take advantage of opportunities and ensure business continuity.
2054311DanoneFranceWater2016PublicFood & Beverage ProcessingConsumer StaplesRest of worldOther: Rest of the worldReputational-Changes in consumer behaviorDisruption to salesRisks associated with the retailer's commitments: retailers are increasingly engaging in environmental plans, which could turn into supplier's preferences. Metro and Arcos Dorados are requesting us to disclose our water consumption management and risk & opportunity assessment at local level via CDP supply chain questionnaire. One of biggest Business Units supplying to Metro in dairy is Russia and Dairy Brazil for Arcos Dorados.>6 yearsProbableMediumEngagement with customers; Establish site-specific targets; Promote best practice and awarenessBy responding to Metro & Arcos Dorados request through CDP supply chain we are showing how we manage the risks and opportunities water challenges present. We are showing transparency and potential collaboration projects to tackle risks, take advantage of opportunities and ensure business continuity.
2064365Deere & CompanyUSAWater2016PublicElectrical Equipment and MachineryIndustrials
2074702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Seasonal supply variability/Inter annual variabilitySupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2084702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Climate changeSupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2094816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Regulatory-Poor coordination between regulatory bodiesSupply chain disruptionProposed changes to the National Water Act, 1998 (Act 36 of 1998) related to water allocation rights and the proposal to cancel the unexercised rights will impact on water availability in the long run.1-3 yearsProbableMedium-highEngagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliersR250 000/annumThe proposed changes will not only impact Distell but also other irrigation farmers and agri-industries. Distell is increasing its engagement with the regulatory authority and water users associations and suppliers to work together. This requires additional logistical cost i.e. flights and accommodation resulting in the additional estimated R250 000/annum costs
21016852Shiseido Co., Ltd.JapanWater2016PublicConsumer Durables, Household and Personal ProductsConsumer StaplesIndiaOther:Physical-Increased water stress?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????UnknownHighly probableMedium-highEngagement with suppliers; Increased investment in new technology; Other: ??????????????????????
2114702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Ecosystem vulnerabilitySupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2124702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Projected water scarcitySupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2134702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-DroughtSupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2144702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Increased water scarcitySupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2154702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Projected water stressSupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2164702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraRegulatory-Limited or no river basin/catchment managementSupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2174702Diageo PlcUnited KingdomWater2016PublicFood & Beverage ProcessingConsumer StaplesKenyaOther: MaraPhysical-Increased water stressSupply chain disruptionThe Narok area of Kenya is an important sourcing area for barley for Diageo and one that is likely to experience a climate change-induced increase in temperature over time. According to modeling that we conducted, climate change could result in a reduction in land area suitable for growing barley of 16% or more over the next 10 years - this reduction could result in a disruption to Diageo's local supply chain of this material.>6 yearsProbableMediumEngagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local communityTotal costs invested to-date are estimated at less than £1MEstimates for costs were derived from review of consulting fees for climate change impact modeling, construction/maintenance costs for a dam rehabilitation project, and time and resources dedicated to agricultural assistance in the area. Diageo is mitigating risk with a strategy that focuses on several activities: - we have modeled the potential impacts of rising temperatures on the amount of land area suitable for growing barley. The results of this work are informing our long-term procurement strategy in the area.- We are increasing our investment in agricultural assistance efforts with farmers in the area, including developing higher-yielding barley varieties and providing support and training to local farmers;- We have invested in development of water storage capacity for farmers in Narok through construction/ rehabilitation of a dam in the area and have implemented WASH projects within other farming communities.
2184816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Physical-Increased water stressSupply chain disruptionReduced yield and supply of raw materials (grapes) for wine production due to reduced rainfall and increased temperatures4-6 yearsProbableMedium-highEngagement with suppliers; Supplier diversificationR0Strategy to date has been to spread the risk by buying from across a wide geographical area so that risk for supply interruptions is spread between catchments.
2194816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Physical-Increased water scarcitySupply chain disruptionReduced yield and supply of raw materials (grapes) for wine production due to reduced rainfall and increased temperatures4-6 yearsProbableMedium-highEngagement with suppliers; Supplier diversificationR0Strategy to date has been to spread the risk by buying from across a wide geographical area so that risk for supply interruptions is spread between catchments.
2204816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Physical-Climate changeSupply chain disruptionReduced yield and supply of raw materials (grapes) for wine production due to reduced rainfall and increased temperatures4-6 yearsProbableMedium-highEngagement with suppliers; Supplier diversificationR0Strategy to date has been to spread the risk by buying from across a wide geographical area so that risk for supply interruptions is spread between catchments.
2214816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Regulatory-Increased difficulty in obtaining withdrawals/operations permitSupply chain disruptionProposed changes to the National Water Act, 1998 (Act 36 of 1998) related to water allocation rights and the proposal to cancel the unexercised rights will impact on water availability in the long run.1-3 yearsProbableMedium-highEngagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliersR250 000/annumThe proposed changes will not only impact Distell but also other irrigation farmers and agri-industries. Distell is increasing its engagement with the regulatory authority and water users associations and suppliers to work together. This requires additional logistical cost i.e. flights and accommodation resulting in the additional estimated R250 000/annum costs
2224816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Regulatory-Unclear and/or unstable regulations on water allocation and wastewater dischargeSupply chain disruptionProposed changes to the National Water Act, 1998 (Act 36 of 1998) related to water allocation rights and the proposal to cancel the unexercised rights will impact on water availability in the long run.1-3 yearsProbableMedium-highEngagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliersR250 000/annumThe proposed changes will not only impact Distell but also other irrigation farmers and agri-industries. Distell is increasing its engagement with the regulatory authority and water users associations and suppliers to work together. This requires additional logistical cost i.e. flights and accommodation resulting in the additional estimated R250 000/annum costs
2234816Distell Group LtdSouth AfricaWater2016PublicFood & Beverage ProcessingConsumer StaplesSouth AfricaBerg-Olifants (WMA)Regulatory-Regulatory uncertaintySupply chain disruptionProposed changes to the National Water Act, 1998 (Act 36 of 1998) related to water allocation rights and the proposal to cancel the unexercised rights will impact on water availability in the long run.1-3 yearsProbableMedium-highEngagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliersR250 000/annumThe proposed changes will not only impact Distell but also other irrigation farmers and agri-industries. Distell is increasing its engagement with the regulatory authority and water users associations and suppliers to work together. This requires additional logistical cost i.e. flights and accommodation resulting in the additional estimated R250 000/annum costs
2244895Dr Pepper Snapple Group IncUSAWater2016PublicFood & Beverage ProcessingConsumer StaplesUnited States of AmericaNot knownPhysical-Projected water stressPlant/production disruption leading to reduced outputThe competition for water among domestic, agricultural and manufacturing users is increasing in the countries where our suppliers operate, and as water becomes scarcer or the quality of the water deteriorates, we may incur increased production costs or face manufacturing constraints which could negatively affect our business and financial performance. Even where water is widely available, water purification and waste treatment infrastructure limitations could increase costs or constrain our operations.>6 yearsProbableMediumThe costs associated with these efforts are the FTE costs associated with the dedicated Sustainability and EHS personnel and those associated with our software solutions.DPS manages direct and indirect risks that may significantly impact the achievement of the company’s objectives primarily through our Enterprise Risk Management (ERM) and Environmental Management System (EMS) processes, which include tracking our risks associated with energy use, costs, and the resulting carbon emissions. We have 20 FTE dedicated to Sustainability and EHS functional roles, we invest in EHS regulatory auditing software, and we invest in a partnership to calculate and house our carbon inventorying. Specific to water we utilize WBCSD’s Global Water Tool (GWT) to assist us in assessing our risk relative to our water use and needs.
2254895Dr Pepper Snapple Group IncUSAWater2016PublicFood & Beverage ProcessingConsumer StaplesUnited States of AmericaNot knownPhysical-Climate changePlant/production disruption leading to reduced outputThe competition for water among domestic, agricultural and manufacturing users is increasing in the countries where our suppliers operate, and as water becomes scarcer or the quality of the water deteriorates, we may incur increased production costs or face manufacturing constraints which could negatively affect our business and financial performance. Even where water is widely available, water purification and waste treatment infrastructure limitations could increase costs or constrain our operations.>6 yearsProbableMediumThe costs associated with these efforts are the FTE costs associated with the dedicated Sustainability and EHS personnel and those associated with our software solutions.DPS manages direct and indirect risks that may significantly impact the achievement of the company’s objectives primarily through our Enterprise Risk Management (ERM) and Environmental Management System (EMS) processes, which include tracking our risks associated with energy use, costs, and the resulting carbon emissions. We have 20 FTE dedicated to Sustainability and EHS functional roles, we invest in EHS regulatory auditing software, and we invest in a partnership to calculate and house our carbon inventorying. Specific to water we utilize WBCSD’s Global Water Tool (GWT) to assist us in assessing our risk relative to our water use and needs.
2265021DTE Energy CompanyUSAWater2016PublicElectric Utilities & Independent Power Producers & Energy Traders (including fossil, alternative and nuclear energy)UtilitiesUnited States of AmericaSt. LawrenceRegulatory-Regulation of discharge quality/volumes leading to higher compliance costsSupply chain disruptionThe number of credible suppliers to address the revised ELGs related to flue gas desulphurization (FGD) wastewater treatment may be limited due to the high demand nationwide to meet the low discharge criteria that is being required by the federal government. This impact may put our company in jeopardy of meeting the revised limits.1-3 yearsProbableHighEngagement with public policy makers; Engagement with suppliers; Increased capital expenditure; Increased investment in new technology; Supplier diversification; Other: Engagement with advocacy groups.UnknownSpecific to FGD wastewater treatment: The company is working with industry advocacy groups to devise a strategy for meeting the new ELG limits on selenium, arsenic, mercury and nitrate/nitrite. At present, the best available technology (BAT) being proposed does not appear to meet the anticipated limits. Other technologies are being investigated, and in some cases, pilot tested.
2275066Duratex S/ABrazilWater2016PublicForest and Paper Products - Forestry, Timber, Pulp and Paper, RubberMaterialsBrazilOther: Paraíba and Gramame River Basin; GL2 Basin; Sinos River; Paraíba do Sul River Basin; Jundiaí River Basin; Penha-Pinheiros River Basin; Uberaba River Basin; Taquari-Antas River Basin; Bauru River Basin; Rio Pardo River Basin; Baixo Itapetininga River BasinPhysical-Increased water stressSupply chain disruptionChange in precipitation pattern: Decrease of raw material supplying.UnknownUnknownHighEngagement with suppliersR$ 129,977 (Brazilian reais) approximatelyDuratex has a formal set process for the identification of risks in its relationship with national and international suppliers. This identification is carried out through the Duratex Supplier Management Program (GFD), conceived in May 2012, and in alignment with the guidelines of the Sustainability Commission. Its objective is to ensure that Duratex's Vision and Values are reflected through its suppliers, making for a closer relationship and encouraging good practices. This program uses metrics for the monitoring of suppliers through the use of questionnaires, scheduled visits and document control, taking into consideration legal, social and environmental questions. Water is one of the theme verified by GFD, with specific questions. Until now, none risk was found within Duratex’s suppliers.
2285767EOG Resources, Inc.USAWater2016PublicOil & GasEnergy
2295879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareIndiaPenner RiverPhysical-Increased water stressSupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2305879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareIndiaPenner RiverPhysical-Declining water qualitySupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2315879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareIndiaPenner RiverPhysical-Increased water scarcitySupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2325879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareIndiaPenner RiverReputational-Cultural and religious valuesSupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2336161Fast Retailing Co., Ltd.JapanWater2016PublicRetailingConsumer DiscretionaryChinaYangtze River (Chang Jiang)Regulatory-Higher water pricesPlant/production disruption leading to reduced outputThere is concern that water shortage might affect production as well as possible cost increase and affecting product delivery timing.(Second to major impacts: Higher operating costs, brand damage, supply chain disruption)UnknownUnknownUnknownEngagement with suppliers; Promote best practice and awareness; Tighter supplier performance standardsResearch is needed for strategy planning. Research costs are unknown.We plan to make research for upstream suppliers.
23457963Birla CarbonUSAWater2016PublicChemicalsMaterialsEgyptNilePhysical-Inadequate infrastructureSupply chain disruptionUnknownProbableUnknownDevelop flood emergency plans; Engagement with suppliers; Infrastructure investment; Greater due diligence; Promote best practice and awareness; Supplier diversification
2355879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareIndiaPenner RiverReputational-Inadequate access to water, sanitation and hygieneSupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2365879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareMexicoRio GrandePhysical-Declining water qualitySupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2375879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareMexicoRio GrandePhysical-Increased water stressSupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2385879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareMexicoRio GrandePhysical-Increased water scarcitySupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2395879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareMexicoRio GrandePhysical-Ecosystem vulnerabilitySupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2405879Essilor InternationalFranceWater2016PublicHealthcare Providers & Services, and Healthcare TechnologyHealth CareMexicoRio GrandePhysical-Projected water scarcitySupply chain disruptionThe physical risks in decreasing water quality and quantity may lead to higher operational cost and disruption of water supply of our suppliers. And the risks of inadequate health and hygiene may impact the efficiency of our suppliers and the logistic system. All these risks may thus disrupt the supply of our raw materials, which also require water resource in the manufacturing process.>6 yearsProbableLowEngagement with suppliers; Supplier diversificationEssilor has launched its Supplier Sustainability Program in 2015. No additional cost has occurred for the reporting year.In 2015, Essilor launched a Supplier Sustainability Program on group level. The program includes a new supplier charter with consideration of environmental responsibility of our suppliers including water criteria. Through the program, we will also conduct audit including water risks of our strategic and key suppliers.The supplier audit program has been launched in 2016.
2416595Ford Motor CompanyUSAWater2016PublicAutomobiles & ComponentsConsumer DiscretionaryIndiaOther: Palar PonnaiyarPhysical-Increased water scarcityHigher operating costsFord has many suppliers in northern Tamil Nadu state, especially in the Palar-Ponnaiyar river basin which could have possible future business challenges. The area is under current water stress, which has the potential to negatively impact Ford by causing near-term or future possible supply disruptions to Ford's manufacturing operations or increases in operating costs.1-3 yearsProbableUnknownEngagement with suppliersThe Ford Partnership for a Cleaner Environment (PACE) program is a Ford-supplier partnership to reduce our collective environmental footprint and there is no cost to Ford. Through the program, Ford shares leading practices for water use reduction with suppliers who may wish to implement some of the actions in their own facilities and at their own expense.Our strategy for reducing potential risks and impact to our supply chain by working with suppliers to minimize their water use through the Ford Partnership for a Cleaner Environment (PACE) program. Our goal via the PACE program is to teach suppliers about the water savings initiatives we have implemented at Ford with the hope that they will implement some within their facilities. To further amplify environmental responsibility and sustainability down the supply chain, we also encourage our Tier 1 suppliers to share these best practices with their suppliers.The Ford PACE program is a Ford-supplier partnership to reduce our collective environmental footprint and there is no cost to Ford. Through the program, Ford shares leading practices for water use reduction with suppliers who may wish to implement some of the actions in their own facilities at their own expense (if there are associated implementation costs).
2426595Ford Motor CompanyUSAWater2016PublicAutomobiles & ComponentsConsumer DiscretionaryIndiaOther: Palar PonnaiyarPhysical-Projected water scarcityHigher operating costsFord has many suppliers in northern Tamil Nadu state, especially in the Palar-Ponnaiyar river basin which could have possible future business challenges. The area is under current water stress, which has the potential to negatively impact Ford by causing near-term or future possible supply disruptions to Ford's manufacturing operations or increases in operating costs.1-3 yearsProbableUnknownEngagement with suppliersThe Ford Partnership for a Cleaner Environment (PACE) program is a Ford-supplier partnership to reduce our collective environmental footprint and there is no cost to Ford. Through the program, Ford shares leading practices for water use reduction with suppliers who may wish to implement some of the actions in their own facilities and at their own expense.Our strategy for reducing potential risks and impact to our supply chain by working with suppliers to minimize their water use through the Ford Partnership for a Cleaner Environment (PACE) program. Our goal via the PACE program is to teach suppliers about the water savings initiatives we have implemented at Ford with the hope that they will implement some within their facilities. To further amplify environmental responsibility and sustainability down the supply chain, we also encourage our Tier 1 suppliers to share these best practices with their suppliers.The Ford PACE program is a Ford-supplier partnership to reduce our collective environmental footprint and there is no cost to Ford. Through the program, Ford shares leading practices for water use reduction with suppliers who may wish to implement some of the actions in their own facilities at their own expense (if there are associated implementation costs).
2436595Ford Motor CompanyUSAWater2016PublicAutomobiles & ComponentsConsumer DiscretionaryIndiaOther: Palar PonnaiyarRegulatory-Higher water pricesHigher operating costsFord has many suppliers in northern Tamil Nadu state, especially in the Palar-Ponnaiyar river basin which could have possible future business challenges. The area is under current water stress, which has the potential to negatively impact Ford by causing near-term or future possible supply disruptions to Ford's manufacturing operations or increases in operating costs.1-3 yearsProbableUnknownEngagement with suppliersThe Ford Partnership for a Cleaner Environment (PACE) program is a Ford-supplier partnership to reduce our collective environmental footprint and there is no cost to Ford. Through the program, Ford shares leading practices for water use reduction with suppliers who may wish to implement some of the actions in their own facilities and at their own expense.Our strategy for reducing potential risks and impact to our supply chain by working with suppliers to minimize their water use through the Ford Partnership for a Cleaner Environment (PACE) program. Our goal via the PACE program is to teach suppliers about the water savings initiatives we have implemented at Ford with the hope that they will implement some within their facilities. To further amplify environmental responsibility and sustainability down the supply chain, we also encourage our Tier 1 suppliers to share these best practices with their suppliers.The Ford PACE program is a Ford-supplier partnership to reduce our collective environmental footprint and there is no cost to Ford. Through the program, Ford shares leading practices for water use reduction with suppliers who may wish to implement some of the actions in their own facilities at their own expense (if there are associated implementation costs).
2446634Fortescue Metals GroupAustraliaWater2016PublicMining - Iron, Aluminum, Other MetalsMaterialsAustraliaFortescue RiverPhysical-FloodingSupply chain disruptionRegional flooding has the potential to cut off supply routes to and from remote mining locations. Inundation and washout of main/regional road networks has potential to affect supply chain for several days to a few weeks depending upon severity of the storm event. Other supply chain routes such as air and Fortescue’s rail network are not as vulnerable, and therefore impacts would be limited to a few days at a time.Current-up to 1 yearUnlikelyMedium-highDevelop flood emergency plans; Infrastructure investment; Infrastructure maintenance; Other: : Site preparation and emergency response plansCosts associated with planning activities are minimal (<$500K), and implementation of strategies are also expected to minimal given that they will be applied in a contingent manner and as such are expected to be approximately <$1MThe majority of Fortescue’s long distance transport is via rail and air. In the event of significant flooding, supplies and personnel could be transported by air to ensure site safety. Emergency response planning in the event of flooding is part of standard contingency planning. The estimated cost is based separation of planning activities already undertaken within operational management described within 3.2 c above
24557963Birla CarbonUSAWater2016PublicChemicalsMaterialsThailandChao PhrayaPhysical-FloodingSupply chain disruptionUnknownHighly probableUnknownDevelop flood emergency plans; Engagement with public policy makers; Engagement with suppliers; Infrastructure investment; Greater due diligence; Promote best practice and awareness; Supplier diversification; Strengthen links with local community
2466634Fortescue Metals GroupAustraliaWater2016PublicMining - Iron, Aluminum, Other MetalsMaterialsAustraliaFortescue RiverPhysical-DroughtSupply chain disruptionRegional drought has the potential to impact local communities and suppliers, including local accommodation for mining personnel.4-6 yearsUnlikelyLow-mediumOther: Emergency PlanningCosts associated with planning activities are minimal (<$500K), and implementation of strategies are also expected to minimal given that they will be applied in a contingent manner and as such are expected to be approximately <$1MDrought conditions that may affect Fortescue’s supply chain and the surrounding regions would become apparent over long periods and therefore allow sufficient time to act. Emergency response planning is part of standard contingency planning.
2476874Fujitsu Ltd.JapanWater2016PublicSoftware & ServicesInformation TechnologyThailandChao PhrayaPhysical-FloodingSupply chain disruptionThere is a possibility of becoming impossible for the factory which manufactures electronic parts caused by the flood damage.Current-up to 1 yearHighly probableHighSupplier diversificationunknownSwitch to procurement by multiple suppliers.
2487060Gap Inc.USAWater2016PublicRetailingConsumer DiscretionaryChinaPhysical-DroughtSupply chain disruptionGap Inc. brands sourced approx. 24% of merchandise from China in fiscal 2015. Our risk assessments indicate the ability to source products from China on favorable terms could be affected by a number of water-related risks, including water scarcity, stress and extreme weather events such as drought or flooding. Water is a key input at many stages of our supply chain in China, from growing cotton to fabric mills and denim laundries. Cotton is used in a majority of our products and requires substantial quantities of water and chemicals, and China is one of the largest cotton producers. Over time, climate-induced changes are likely to impact cotton yields and costs. China has also implemented water quality emissions standards for apparel mills, and a local NGO, IPE, is identifying companies that do not comply with the standards. Improper wastewater treatment following the use of dyes and chemicals at mills and laundries could affect the well-being of the people who make our clothes and surrounding communities. Workers’ productivity could be impacted, and we could need to adjust sourcing accordingly. We could also face reputation risks due to the impact of water-related risks that affect the well-being of the people who make our clothes or local communities. These reputation risks could adversely affect consumers' perceptions of our brands and lead to lower demand for our products.4-6 yearsProbableMediumEngagement with community; Engagement with suppliers; Promote best practice and awareness; Supplier diversification; Tighter supplier performance standardsManagement costs include employee resources and time and contributions to external partners. Personnel costs include the costs of Supply Chain, Sourcing and Global Sustainability personnel who are involved in engaging fabric mills and apparel suppliers. We estimate our current investment in managing this risk to be roughly in the range of $0.5-1 million.Our Supply Chain and Sourcing teams' work to develop and maintain a diverse supplier base across a number of countries reduces risk on an ongoing basis. We are working to integrate more sustainable materials, which are less vulnerable to climate and other environmental impacts, into our product design and sourcing practices. This includes our plans to participate in the Better Cotton Initiative (BCI). The first phase of our Mill Sustainability Program included working with 20 strategic mills in China, India, Pakistan and Taiwan to conduct environmental assessments, including water consumption and wastewater treatment and disposal using the Sustainable Apparel Coalition's (SAC) Higg Index. We expanded the program in 2015 to partner with 20 additional strategic mills, and we are working to help set performance expectations for our our strategic fabric mills. Three mills in China that we helped participate in the NRDC’s Clean by Design program achieved significant reductions in water and electricity use, as well as wastewater discharge. We request all of our Tier 1 suppliers in Bangladesh to conduct and report annually on their environmental footprint assessments using the Higg Index. We are an active partner in and currently chair the Zero Discharge of Hazardous Chemicals (ZDHC) 2020 Roadmap to eliminate hazardous chemicals from our supply chain by 2020. We have also actively monitored and helped to remediate wastewater quality at denim laundries through our Water Quality Program (WQP) and recently strengthened our WQP requirements.
2497060Gap Inc.USAWater2016PublicRetailingConsumer DiscretionaryChinaPhysical-FloodingSupply chain disruptionGap Inc. brands sourced approx. 24% of merchandise from China in fiscal 2015. Our risk assessments indicate the ability to source products from China on favorable terms could be affected by a number of water-related risks, including water scarcity, stress and extreme weather events such as drought or flooding. Water is a key input at many stages of our supply chain in China, from growing cotton to fabric mills and denim laundries. Cotton is used in a majority of our products and requires substantial quantities of water and chemicals, and China is one of the largest cotton producers. Over time, climate-induced changes are likely to impact cotton yields and costs. China has also implemented water quality emissions standards for apparel mills, and a local NGO, IPE, is identifying companies that do not comply with the standards. Improper wastewater treatment following the use of dyes and chemicals at mills and laundries could affect the well-being of the people who make our clothes and surrounding communities. Workers’ productivity could be impacted, and we could need to adjust sourcing accordingly. We could also face reputation risks due to the impact of water-related risks that affect the well-being of the people who make our clothes or local communities. These reputation risks could adversely affect consumers' perceptions of our brands and lead to lower demand for our products.4-6 yearsProbableMediumEngagement with community; Engagement with suppliers; Promote best practice and awareness; Supplier diversification; Tighter supplier performance standardsManagement costs include employee resources and time and contributions to external partners. Personnel costs include the costs of Supply Chain, Sourcing and Global Sustainability personnel who are involved in engaging fabric mills and apparel suppliers. We estimate our current investment in managing this risk to be roughly in the range of $0.5-1 million.Our Supply Chain and Sourcing teams' work to develop and maintain a diverse supplier base across a number of countries reduces risk on an ongoing basis. We are working to integrate more sustainable materials, which are less vulnerable to climate and other environmental impacts, into our product design and sourcing practices. This includes our plans to participate in the Better Cotton Initiative (BCI). The first phase of our Mill Sustainability Program included working with 20 strategic mills in China, India, Pakistan and Taiwan to conduct environmental assessments, including water consumption and wastewater treatment and disposal using the Sustainable Apparel Coalition's (SAC) Higg Index. We expanded the program in 2015 to partner with 20 additional strategic mills, and we are working to help set performance expectations for our our strategic fabric mills. Three mills in China that we helped participate in the NRDC’s Clean by Design program achieved significant reductions in water and electricity use, as well as wastewater discharge. We request all of our Tier 1 suppliers in Bangladesh to conduct and report annually on their environmental footprint assessments using the Higg Index. We are an active partner in and currently chair the Zero Discharge of Hazardous Chemicals (ZDHC) 2020 Roadmap to eliminate hazardous chemicals from our supply chain by 2020. We have also actively monitored and helped to remediate wastewater quality at denim laundries through our Water Quality Program (WQP) and recently strengthened our WQP requirements.
2507060Gap Inc.USAWater2016PublicRetailingConsumer DiscretionaryChinaPhysical-Increased water scarcitySupply chain disruptionGap Inc. brands sourced approx. 24% of merchandise from China in fiscal 2015. Our risk assessments indicate the ability to source products from China on favorable terms could be affected by a number of water-related risks, including water scarcity, stress and extreme weather events such as drought or flooding. Water is a key input at many stages of our supply chain in China, from growing cotton to fabric mills and denim laundries. Cotton is used in a majority of our products and requires substantial quantities of water and chemicals, and China is one of the largest cotton producers. Over time, climate-induced changes are likely to impact cotton yields and costs. China has also implemented water quality emissions standards for apparel mills, and a local NGO, IPE, is identifying companies that do not comply with the standards. Improper wastewater treatment following the use of dyes and chemicals at mills and laundries could affect the well-being of the people who make our clothes and surrounding communities. Workers’ productivity could be impacted, and we could need to adjust sourcing accordingly. We could also face reputation risks due to the impact of water-related risks that affect the well-being of the people who make our clothes or local communities. These reputation risks could adversely affect consumers' perceptions of our brands and lead to lower demand for our products.4-6 yearsProbableMediumEngagement with community; Engagement with suppliers; Promote best practice and awareness; Supplier diversification; Tighter supplier performance standardsManagement costs include employee resources and time and contributions to external partners. Personnel costs include the costs of Supply Chain, Sourcing and Global Sustainability personnel who are involved in engaging fabric mills and apparel suppliers. We estimate our current investment in managing this risk to be roughly in the range of $0.5-1 million.Our Supply Chain and Sourcing teams' work to develop and maintain a diverse supplier base across a number of countries reduces risk on an ongoing basis. We are working to integrate more sustainable materials, which are less vulnerable to climate and other environmental impacts, into our product design and sourcing practices. This includes our plans to participate in the Better Cotton Initiative (BCI). The first phase of our Mill Sustainability Program included working with 20 strategic mills in China, India, Pakistan and Taiwan to conduct environmental assessments, including water consumption and wastewater treatment and disposal using the Sustainable Apparel Coalition's (SAC) Higg Index. We expanded the program in 2015 to partner with 20 additional strategic mills, and we are working to help set performance expectations for our our strategic fabric mills. Three mills in China that we helped participate in the NRDC’s Clean by Design program achieved significant reductions in water and electricity use, as well as wastewater discharge. We request all of our Tier 1 suppliers in Bangladesh to conduct and report annually on their environmental footprint assessments using the Higg Index. We are an active partner in and currently chair the Zero Discharge of Hazardous Chemicals (ZDHC) 2020 Roadmap to eliminate hazardous chemicals from our supply chain by 2020. We have also actively monitored and helped to remediate wastewater quality at denim laundries through our Water Quality Program (WQP) and recently strengthened our WQP requirements.

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created Sep 18 2017

updated Sep 20 2018

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CDP's water program motivates companies to disclose and reduce their environmental impacts by using the power of investors and customers. The data CDP collects help influential decision makers to reduce risk, capitalize on opportunities and drive action towards a more sustainable world. This dataset comes from question W3.2d asking companies to list the inherent water risks that could generate a substantive change in their business, operations, revenue or expenditure, the potential impact to their supply chain and the strategies to mitigate them.

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