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NewsNotes, May-June 2010
Vol. 35 No. 3

Corporate accountability and water

A number of corporate accountability concerns involve corporations and water, just as corporations and climate change. While corporate responses range from efforts to reduce greenhouse gas emissions to obstruction of any efforts to address climate change, companies are just in the early stages of looking at their impact on water supply; the impact of their water use on local communities and the local ecology; and the impact on their own operations of changing water availability due to climate change. Socially responsible investors are calling for greater transparency and accountability in regards to corporations and water. The following article was written by Cathy Rowan, corporate accountability coordinator for the Maryknoll Sisters.

In January, at the request of a number of institutional investors, the U.S. Securities and Exchange Commission highlighted water in its new “interpretive guidance” that clarifies what public companies need to disclose to investors about the climate-related risks and opportunities they face. “Changes in the availability or quality of water…can have material effects on companies.”

“Murky Waters,” a new report by the environmental group CERES, confirmed the lack of corporate disclosure about water. Of 100 companies surveyed, only 17 reported local-level water data and only a handful provided this information in the context of operations in water-stressed regions. No companies gave comprehensive data on their suppliers’ water performance – a glaring omission when one considers that a vast majority of many corporations’ water footprint is in the supply chain.

Just before World Water Day (March 22), the microprocessor company Intel announced the adoption of a corporate policy that supports the human right to water. This came after discussions with the Unitarian Universalist Service Committee (UUSC) and a socially responsible investment firm, NorthStar Asset Management.

In the policy statement, Intel recognizes “that water is a critical natural resource that is of strategic importance to our business and the communities in which we operate. We acknowledge the importance of having guiding principles in terms of our responsible use and preservation of this vital resource.”

The policy explicitly references the United Nations’ definition of the human right to water: “All people’s right to safe, sufficient, acceptable, physically accessible and affordable water for personal and domestic use.”

Intel commits to “openly communicate and engage with our communities regarding our water usage and conservation initiatives in an ongoing manner” and “work to ensure that our operations do not adversely impact physical accessibility of community members to water resources.”

It will “consider the impact on water throughout all stages in our operations, including: reviewing access to sustainable water sources as a criterion when selecting a site for a new Intel facility, incorporating water conservation elements into the design of our facilities, and establishing specific water goals for new process technology changes in an effort to support a safe, consistent, adequate and affordable water supply in line with local practices.”

Last year, the UUSC and NorthStar were instrumental in getting PepsiCo to become the first multinational corporation to adopt a policy in support of the human right to water. PepsiCo had its water-use license revoked in Pudussery, India, in 2003 after claims that its bottling plants were depleting community groundwater. This prompted investors to call on the company to be more accountable to local communities on water use.

In April, the Carbon Disclosure Project (CDP), which collects data on corporations’ greenhouse gas emissions and climate change strategies, launched a Water Disclosure Project. The CDP has sent a questionnaire to 302 of the world’s largest companies in industrial sectors that are water-intensive or that face particular water-related risks. The focus includes beverage, oil and gas, mining, food and food processing, pharmaceutical and chemical companies. CDP states: “We will request information on the risks and opportunities companies face in relation to water; on water usage and exposure to water stress in companies’ own operations and in their supply chains; and on companies’ water management plans and governance. This data will provide insight into the strategies deployed by many of the largest companies in the world on water and will be used to help drive investment towards sustainable water use.”

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