This document is solely for the use of client personnel. No part of it may be distributed, quoted, or reproduced without the prior written approval of Irbaris LLP. This material was prepared by Irbaris for use during an oral presentation, it is not a complete record of the discussion. Copyright: Irbaris LLP 2014
Introduction to the Aqua Gauge
November 2014
CEFIC
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§ Ad-hoc § Reactive § Business case
difficult
§ Often absent § Logistically,
commercially, legally challenging
Many companies have done some work on water, but systematic progress can be difficult
Corporate
Sites Supply chain
§ Incomplete § Inaccurate
§ Often disjointed § Lack of senior engagement
§ Fragmented § CSR or incident-led § Ill-defined objectives
or success measures
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The Ceres Aqua Gauge was developed by Irbaris through engagement with leading investors, companies and NGOs
For companies, the Aqua Gauge helps: – Frame and assess all of the options for
managing water impacts & risk – Compare performance relative to
leading practice in each area – Prioritize future actions and improve
For tool is also being used by investors to assess company performance (e.g. Calpers) The Excel tool and accompanying report can be downloaded from: http://www.ceres.org/issues/water/corporate-water-stewardship/aqua-gauge
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MEASUREMENT
DISCLOSURE
ENGAGEMENT
MANAGEMENT
Activities grouped into four categories…. Definitions provided for each activity….
No Action Company has not taken action
Initial Steps Action has been taken but implementation is still underway
Advanced Progress Action has been taken. Good progress toward leading practice
Leading Practice Action is consistent with what leading companies are doing or aspire to do
Collection and analysis of water related data
Processes and procedures to manage risk
Engaging internal and external stakeholders
Availability, format and nature of information
The Aqua Gauge evaluates company performance in over 20 individual risk management activities
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The Aqua Gauge is being used by a growing number of the world’s leading companies
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The tool produces a rapid, intuitive summary of the strengths and weaknesses of a company’s water risk management
MEASUREMENT
ENGAGEMENT
DISCLOSURE
Leading Practice
Advanced Progress
Initial Steps
Data gathering
Risk assessment
1.1 Own use1.2 Own impacts
1.3 External factors1.4 Stakeholder perceptions
1.5 Suppliers
1.6 Own operations
2.8Supplier standards/ practices
2.9 Business planning
2.10Product design
3.1 Local communities
3.2 Employees
3.3 Suppliers
3.4 Government & regulators
3.5 NGOs & community groups
3.6 Other industries
3.7 Customers
4.3 Audited/assured
Business planning
4.1 Water related information
4.2 In Financial filings
2.11Opportunity identification
1.7 Supply chain
2.1 Board Oversight
2.2 Senior management
2.3 Public policy/lobbying positions
Governance
2.4 Public statement/policy
MANAGEMENT2.6 Wastewater standards
2.7 Watershed risk plans
Policies & standards
2.5 Goals/Standards for withdrawals
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The tool can also be used to compare performance with industry peers or other leading companies across industries
MEASUREMENT
ENGAGEMENT
DISCLOSURE
Leading Practice
Advanced Progress
Initial Steps
Data gathering
Risk assessment
1.1#Own$use$1.2#Own$impacts$
1.3#External$factors$1.4#Stakeholder$percep8ons$
1.5#Suppliers$
1.6#Own$opera8ons$
1.7#Supply$chain$
2.8#Supplier$standards/$prac8ces$
2.9#Business$planning$
2.10##Product$design$
3.1#Local$communi8es$
3.2#Employees$
3.3#Suppliers$
3.4#Government$&$regulators$
3.5#NGOs$&$community$groups$
3.6##Other$industries$
3.7#Customers$
4.3#Audited/assured#
Business planning
4.1#Water$related$informa8on#
4.2$In$Financial$filings#
2.11#Opportunity$iden8fica8on$
Company A
Company B
2.1#Board$Oversight$
2.2#Senior$management$
2.3#Public$policy/lobbying$posi8ons$$
Governance
2.4#Public$statement/policy$
MANAGEMENT 2.6#Wastewater$standards$
2.7#Watershed$risk$plans$
Policies & standards
2.5#Goals/Standards$for$withdrawals$
1. Compare Performance…. 2. Identify Gaps…. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9
2.10 2.11 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4.1 4.2 4.3
Company A Outperforms Company B Outperforms
Data collection in facilities & watersheds very strong
Track data across the supply chain systematically
Wastewater standard & watershed understanding very strong
Strength in developing new water-sensitive products
Significant time & effort engaging supply chain, governments & customers
Clear understanding of current and future risks
Risk in own operations well mapped
Clear position on public policy
Local communities engagement programs
Engagement of other industries
= both companies at least ‘Advanced Progress’
Our work assessing a range of companies has built a detailed understanding of cutting edge water risk management practices and how they can be applied in different situations
DISGUISED BASED ON ACTUAL ANALYSES
3. Set Priorities….
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Reviews we have conducted to date have identified a wide range of challenges for companies to address
1.1 1.2
1.4
1.6
1.7
2.1
2.2
2.3
2.5 2.6
2.7 2.8 2.9 2.10
3.1
3.2
3.3
3.4
3.5
3.6
3.7
4.3
2.4
2.11
4.1 4.2 1.3
1.5
EXAMPLE C: FOOD COMPANY
1.1 1.2
1.4
1.6
1.7
2.1
2.2
2.3
2.5 2.6
2.7 2.8 2.9 2.10
3.1
3.2
3.3
3.4
3.5
3.6
3.7
4.3
2.4
2.11
4.1 4.2 1.3
1.5
1.1 1.2
1.4
1.6
1.7
2.1
2.2
2.3
2.5 2.6
2.7 2.8 2.9 2.10
3.1
3.2
3.3
3.4
3.5
3.6
3.7
4.3
2.4
2.11
4.1 4.2 1.3
1.5
1.1 1.2
1.4
1.6
1.7
2.1
2.2
2.3
2.5 2.6
2.7 2.8 2.9 2.10
3.1
3.2
3.3
3.4
3.5
3.6
3.7
4.3
2.4
2.11
4.1 4.2 1.3
1.5
EXAMPLE D: POWER UTILITY
EXAMPLE A: AUTOMOTIVE COMPANY
EXAMPLE B: OIL AND GAS COMPANY
1.5
1.5 1.5
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Alliance for Water Stewardship Certification of watersheds
There are many tools, intiaitives and working groups that can help companies to assess and to manage water risks
WWF/DEG Water Filter Detailed assessment of site levels risks
WRI Aqueduct Detailed data on basin specific threats. Being expanded
Water Footprint Network Methodology for developing corporate water footprint
Ceres Aqua Gauge Holistic tool to frame, assess and prioritise all water management activities across the business
CDP Water Disclosure Information disclosure on corporate water performance
GRI G4 guidelines for reporting water-related information
GEMI Local Water Tool Assess local water risks and develop practical responses to manage water and reduce risk
WBCSD Global Water Tool Database of global water risks by geography
Others such as Lifecycle Assessments, WIIX, Water Risk Monetizer
NOT EXHAUSTIVE
MEASUREMENT DISCLOSURE ENGAGEMENT MANAGEMENT
CEO Water Mandate Guidelines for stakeholder engagement
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Water Assessment Tool Example 1: Aqueduct
Creator WRI
Applicability Global (and regional basin studies)
Output format Map of sites in stressed areas
Features
Maps based on 12 water risk indicators § Physical risks (quantity) § Physical risks (quality) § Regulatory and reputational risks Provides aggregated overall risk score for each watershed Maps on projected climate change
Inputs Required
Input locations for study Prioritise risk indicators or chose pre-set sector-based weighting of indicators
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Water Assessment Tool Example 2: Local Water Tool
Creator GEMI (in cooperation with WBCSD)
Applicability Global
Output format Tabular listing of risks for each site
Features
Provides summary of external impact and business risks for both influent and effluent Provides repository to share information Supports development of management plans
Inputs Required
Site data (e.g. effluent, water use) Local water data, Assessment of external stress conditions
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Water Assessment Tool Example 3: Water risk filter
Creator WWF and DEG
Applicability Global
Output format Portfolio report (risk matrix, maps), Facility report (risk indicators, maps, mitigation actions), CDP-ready information
Features
Describes facility and specific basin-related water risk The tool can also include: § Map overlays (e.g. water scarcity,
biodiversity, and climate change, § Country water profiles § Mitigation information
Inputs Required Quantitative and qualitative site data, and data on corporate risks
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There are also initiatives providing guidance and standards to support management and engagement
Alliance for Water Stewardship § Outlines criteria and indicators
– Manage water at the site level – Steward water management beyond
site boundaries at catchment level
§ Includes a six-step continual improvement framework enabling sites to commit to, understand, plan, implement, evaluate and communicate water stewardship actions.
§ ISEAL member and uses standard setting, assurance and impacts codes
CEO Water Mandate To support signatory companies, provides guidance in numerous areas: § Approach to corporate water
disclosure addressing the complexity and local nature of water resources
§ Framework for Responsible Business Engagement with Water Policy
§ Human rights and corporate water stewardship strategies and policies
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There are many different tools and initiatives; the Aqua Gauge can help guide companies as to which matters
MEASUREMENT
ENGAGEMENT
DISCLOSURE
Leading Practice
Advanced Progress
Initial Steps
Data gathering
Risk assessment
1.1#Own$use$1.2#Own$impacts$
1.3#External$factors$1.4#Stakeholder$percep8ons$
1.5#Suppliers$
1.6#Own$opera8ons$
1.7#Supply$chain$
2.8#Supplier$standards/$prac8ces$
2.9#Business$planning$
2.10##Product$design$
3.1#Local$communi8es$
3.2#Employees$
3.3#Suppliers$
3.4#Government$&$regulators$
3.5#NGOs$&$community$groups$
3.6##Other$industries$
3.7#Customers$
4.3#Audited/assured#
Business planning
4.1#Water$related$informa8on#
4.2$In$Financial$filings#
2.11#Opportunity$iden8fica8on$
Company A
Company B
2.1#Board$Oversight$
2.2#Senior$management$
2.3#Public$policy/lobbying$posi8ons$$
Governance
2.4#Public$statement/policy$
MANAGEMENT 2.6#Wastewater$standards$
2.7#Watershed$risk$plans$
Policies & standards
2.5#Goals/Standards$for$withdrawals$
1. Compare Performance…. 2. Identify Gaps…. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9
2.10 2.11 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4.1 4.2 4.3
Company A Outperforms Company B Outperforms
Data collection in facilities & watersheds very strong
Track data across the supply chain systematically
Wastewater standard & watershed understanding very strong
Strength in developing new water-sensitive products
Significant time & effort engaging supply chain, governments & customers
Clear understanding of current and future risks
Risk in own operations well mapped
Clear position on public policy
Local communities engagement programs
Engagement of other industries
= both companies at least ‘Advanced Progress’
3. Set Priorities….
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David Lyon [email protected] www.irbaris.com LONDON Irbaris LLP Euston Tower 286 Euston Road London, NW1 3DP England Mobile: + 44 (0) 7717 898855 Office: +44 20 3463 8787
Contact details
William Lynn [email protected] WASHINGTON DC Irbaris (US) LLP 1875 Eye Street Washington DC 20006 United States of America Office: +1 (202) 429 8424