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2016 – Water risks that could impact companies’ supply chain
| Row number | Account Number | Company Name | Incorporated Country | CDP Program | Reporting Year | Access | Industry Activity Group | GiCS Sector | Country | River basin | Risk driver | Potential impact | Description of impact | Timeframe | Likelihood | Magnitude of potential financial impact | Response strategy | Costs of response strategy | Details of strategy and costs |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 201 | 4311 | Danone | France | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Rest of world | Other: World wide | Reputational-Negative media coverage | Brand 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 years | Unlikely | Medium | Alignment 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 basin | difficult to access | Since 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 . |
| 202 | 4311 | Danone | France | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Rest of world | Other: Rest of the world | Reputational-Community opposition | Disruption to sales | Risks 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 years | Probable | Medium | Engagement with customers; Establish site-specific targets; Promote best practice and awareness | By 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. | |
| 203 | 6161 | Fast Retailing Co., Ltd. | Japan | Water | 2016 | Public | Retailing | Consumer Discretionary | China | Yangtze River (Chang Jiang) | Regulatory-Increased difficulty in obtaining withdrawals/operations permit | Plant/production disruption leading to reduced output | There 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) | Unknown | Unknown | Unknown | Engagement with suppliers; Promote best practice and awareness; Tighter supplier performance standards | Research is needed for strategy planning. Research costs are unknown. | We plan to make research for upstream suppliers. |
| 204 | 4311 | Danone | France | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Rest of world | Other: Rest of the world | Other: Customers requirements | Disruption to sales | Risks 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 years | Probable | Medium | Engagement with customers; Establish site-specific targets; Promote best practice and awareness | By 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. | |
| 205 | 4311 | Danone | France | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Rest of world | Other: Rest of the world | Reputational-Changes in consumer behavior | Disruption to sales | Risks 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 years | Probable | Medium | Engagement with customers; Establish site-specific targets; Promote best practice and awareness | By 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. | |
| 206 | 4365 | Deere & Company | USA | Water | 2016 | Public | Electrical Equipment and Machinery | Industrials | |||||||||||
| 207 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Seasonal supply variability/Inter annual variability | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 208 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Climate change | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 209 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Regulatory-Poor coordination between regulatory bodies | Supply chain disruption | Proposed 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 years | Probable | Medium-high | Engagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliers | R250 000/annum | The 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 |
| 210 | 16852 | Shiseido Co., Ltd. | Japan | Water | 2016 | Public | Consumer Durables, Household and Personal Products | Consumer Staples | India | Other: | Physical-Increased water stress | ????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????? | Unknown | Highly probable | Medium-high | Engagement with suppliers; Increased investment in new technology; Other: ?????????????????????? | |||
| 211 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Ecosystem vulnerability | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 212 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Projected water scarcity | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 213 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Drought | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 214 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Increased water scarcity | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 215 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Projected water stress | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 216 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Regulatory-Limited or no river basin/catchment management | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 217 | 4702 | Diageo Plc | United Kingdom | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | Kenya | Other: Mara | Physical-Increased water stress | Supply chain disruption | The 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 years | Probable | Medium | Engagement with suppliers; Infrastructure investment; Greater due diligence; River basin restoration; Promote best practice and awareness; Supplier diversification; Strengthen links with local community | Total costs invested to-date are estimated at less than £1M | Estimates 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. |
| 218 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Physical-Increased water stress | Supply chain disruption | Reduced yield and supply of raw materials (grapes) for wine production due to reduced rainfall and increased temperatures | 4-6 years | Probable | Medium-high | Engagement with suppliers; Supplier diversification | R0 | Strategy 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. |
| 219 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Physical-Increased water scarcity | Supply chain disruption | Reduced yield and supply of raw materials (grapes) for wine production due to reduced rainfall and increased temperatures | 4-6 years | Probable | Medium-high | Engagement with suppliers; Supplier diversification | R0 | Strategy 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. |
| 220 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Physical-Climate change | Supply chain disruption | Reduced yield and supply of raw materials (grapes) for wine production due to reduced rainfall and increased temperatures | 4-6 years | Probable | Medium-high | Engagement with suppliers; Supplier diversification | R0 | Strategy 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. |
| 221 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Regulatory-Increased difficulty in obtaining withdrawals/operations permit | Supply chain disruption | Proposed 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 years | Probable | Medium-high | Engagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliers | R250 000/annum | The 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 |
| 222 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Regulatory-Unclear and/or unstable regulations on water allocation and wastewater discharge | Supply chain disruption | Proposed 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 years | Probable | Medium-high | Engagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliers | R250 000/annum | The 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 |
| 223 | 4816 | Distell Group Ltd | South Africa | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | South Africa | Berg-Olifants (WMA) | Regulatory-Regulatory uncertainty | Supply chain disruption | Proposed 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 years | Probable | Medium-high | Engagement with public policy makers; Engagement with other stakeholders in the river basin; Engagement with suppliers | R250 000/annum | The 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 |
| 224 | 4895 | Dr Pepper Snapple Group Inc | USA | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | United States of America | Not known | Physical-Projected water stress | Plant/production disruption leading to reduced output | The 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 years | Probable | Medium | The 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. | |
| 225 | 4895 | Dr Pepper Snapple Group Inc | USA | Water | 2016 | Public | Food & Beverage Processing | Consumer Staples | United States of America | Not known | Physical-Climate change | Plant/production disruption leading to reduced output | The 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 years | Probable | Medium | The 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. | |
| 226 | 5021 | DTE Energy Company | USA | Water | 2016 | Public | Electric Utilities & Independent Power Producers & Energy Traders (including fossil, alternative and nuclear energy) | Utilities | United States of America | St. Lawrence | Regulatory-Regulation of discharge quality/volumes leading to higher compliance costs | Supply chain disruption | The 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 years | Probable | High | Engagement with public policy makers; Engagement with suppliers; Increased capital expenditure; Increased investment in new technology; Supplier diversification; Other: Engagement with advocacy groups. | Unknown | Specific 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. |
| 227 | 5066 | Duratex S/A | Brazil | Water | 2016 | Public | Forest and Paper Products - Forestry, Timber, Pulp and Paper, Rubber | Materials | Brazil | Other: 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 Basin | Physical-Increased water stress | Supply chain disruption | Change in precipitation pattern: Decrease of raw material supplying. | Unknown | Unknown | High | Engagement with suppliers | R$ 129,977 (Brazilian reais) approximately | Duratex 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. |
| 228 | 5767 | EOG Resources, Inc. | USA | Water | 2016 | Public | Oil & Gas | Energy | |||||||||||
| 229 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | India | Penner River | Physical-Increased water stress | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 230 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | India | Penner River | Physical-Declining water quality | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 231 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | India | Penner River | Physical-Increased water scarcity | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 232 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | India | Penner River | Reputational-Cultural and religious values | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 233 | 6161 | Fast Retailing Co., Ltd. | Japan | Water | 2016 | Public | Retailing | Consumer Discretionary | China | Yangtze River (Chang Jiang) | Regulatory-Higher water prices | Plant/production disruption leading to reduced output | There 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) | Unknown | Unknown | Unknown | Engagement with suppliers; Promote best practice and awareness; Tighter supplier performance standards | Research is needed for strategy planning. Research costs are unknown. | We plan to make research for upstream suppliers. |
| 234 | 57963 | Birla Carbon | USA | Water | 2016 | Public | Chemicals | Materials | Egypt | Nile | Physical-Inadequate infrastructure | Supply chain disruption | Unknown | Probable | Unknown | Develop flood emergency plans; Engagement with suppliers; Infrastructure investment; Greater due diligence; Promote best practice and awareness; Supplier diversification | |||
| 235 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | India | Penner River | Reputational-Inadequate access to water, sanitation and hygiene | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 236 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | Mexico | Rio Grande | Physical-Declining water quality | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 237 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | Mexico | Rio Grande | Physical-Increased water stress | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 238 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | Mexico | Rio Grande | Physical-Increased water scarcity | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 239 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | Mexico | Rio Grande | Physical-Ecosystem vulnerability | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 240 | 5879 | Essilor International | France | Water | 2016 | Public | Healthcare Providers & Services, and Healthcare Technology | Health Care | Mexico | Rio Grande | Physical-Projected water scarcity | Supply chain disruption | The 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 years | Probable | Low | Engagement with suppliers; Supplier diversification | Essilor 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. |
| 241 | 6595 | Ford Motor Company | USA | Water | 2016 | Public | Automobiles & Components | Consumer Discretionary | India | Other: Palar Ponnaiyar | Physical-Increased water scarcity | Higher operating costs | Ford 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 years | Probable | Unknown | Engagement with suppliers | The 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). |
| 242 | 6595 | Ford Motor Company | USA | Water | 2016 | Public | Automobiles & Components | Consumer Discretionary | India | Other: Palar Ponnaiyar | Physical-Projected water scarcity | Higher operating costs | Ford 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 years | Probable | Unknown | Engagement with suppliers | The 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). |
| 243 | 6595 | Ford Motor Company | USA | Water | 2016 | Public | Automobiles & Components | Consumer Discretionary | India | Other: Palar Ponnaiyar | Regulatory-Higher water prices | Higher operating costs | Ford 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 years | Probable | Unknown | Engagement with suppliers | The 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). |
| 244 | 6634 | Fortescue Metals Group | Australia | Water | 2016 | Public | Mining - Iron, Aluminum, Other Metals | Materials | Australia | Fortescue River | Physical-Flooding | Supply chain disruption | Regional 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 year | Unlikely | Medium-high | Develop flood emergency plans; Infrastructure investment; Infrastructure maintenance; Other: : Site preparation and emergency response plans | Costs 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 <$1M | The 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 |
| 245 | 57963 | Birla Carbon | USA | Water | 2016 | Public | Chemicals | Materials | Thailand | Chao Phraya | Physical-Flooding | Supply chain disruption | Unknown | Highly probable | Unknown | Develop 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 | |||
| 246 | 6634 | Fortescue Metals Group | Australia | Water | 2016 | Public | Mining - Iron, Aluminum, Other Metals | Materials | Australia | Fortescue River | Physical-Drought | Supply chain disruption | Regional drought has the potential to impact local communities and suppliers, including local accommodation for mining personnel. | 4-6 years | Unlikely | Low-medium | Other: Emergency Planning | Costs 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 <$1M | Drought 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. |
| 247 | 6874 | Fujitsu Ltd. | Japan | Water | 2016 | Public | Software & Services | Information Technology | Thailand | Chao Phraya | Physical-Flooding | Supply chain disruption | There is a possibility of becoming impossible for the factory which manufactures electronic parts caused by the flood damage. | Current-up to 1 year | Highly probable | High | Supplier diversification | unknown | Switch to procurement by multiple suppliers. |
| 248 | 7060 | Gap Inc. | USA | Water | 2016 | Public | Retailing | Consumer Discretionary | China | Physical-Drought | Supply chain disruption | Gap 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 years | Probable | Medium | Engagement with community; Engagement with suppliers; Promote best practice and awareness; Supplier diversification; Tighter supplier performance standards | Management 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. | |
| 249 | 7060 | Gap Inc. | USA | Water | 2016 | Public | Retailing | Consumer Discretionary | China | Physical-Flooding | Supply chain disruption | Gap 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 years | Probable | Medium | Engagement with community; Engagement with suppliers; Promote best practice and awareness; Supplier diversification; Tighter supplier performance standards | Management 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. | |
| 250 | 7060 | Gap Inc. | USA | Water | 2016 | Public | Retailing | Consumer Discretionary | China | Physical-Increased water scarcity | Supply chain disruption | Gap 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 years | Probable | Medium | Engagement with community; Engagement with suppliers; Promote best practice and awareness; Supplier diversification; Tighter supplier performance standards | Management 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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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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