new guidance and an online course to assist the disclosure of financial water-related information by companies has been released  by the Climate Disclosure Standards Board (CDSB).

Sustainable management of water is paramount to businesses. In 2020, corporates announced water-related risks to total US$301 billion through CDP; while commenting that the investment needed to allay those risks was just US$55 billion.

The Sixth Assessment Report by the IPCC which was recently released also stated that “Evidence of observed changes in [climate] extremes such as heatwaves, heavy precipitation, droughts, and tropical cyclones, and, in particular, their attribution to human influence, has strengthened.” Investors, thus have the need for high-quality financial information on material risks, possibilities and associated performance related to water faced by firms, in order to enhance their investment decisions, helping them to manage risks and invest in sustainable and resilient businesses.

The CDSB Framework application guidance for water-related disclosures (Water Guidance) provides companies a means of enhancing their reporting practices and making sure that investors are receiving the material water-related data required for efficient capital allocation to drive the shift to a sustainable, resilient, and water secure economy. Vitally, the Water Guidance guides and supports companies to integrate their findings into their mainstream financial statements, compiling a link between environmental and financial performance.

The Water Guidance regulates existing water reporting standards and practices, and assists businesses to implement the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) beyond climate to water. In carrying this out, businesses will be helped to respond to investor needs and allow companies to satisfy the demands of evolving regulation around the globe. The TCFD Knowledge Hub  provides a new online course, based on the guidance.

After the publication of a shared vision in sustainability reporting by CDP, CDSB, GRI, IIRC and SASB in 2020, the CDSB launched the concept of dynamic materiality into Water Guidance, commenting on how it can be applied in the disclosure of water-related information in mainstream annual reports.

Mardi McBrien, Managing Director, CDSB, said:

“Water issues pose immense risks for businesses and the society. The recent dramatic droughts in the United States and Australia and the flooding in Europe and Asia clearly illustrate that. Companies are facing growing investor pressure to provide decision-useful information on risks and opportunities associated with water, and this can and should be done with the same rigour as financial information.”

The Water Guidance was enhanced thanks to the contribution of a dedicated CDSB Water Working Group, consisting of more than 60 members from across the globe with corporate, academic and NGO backgrounds. Forming part of an ambitious 4-year project, it is being backed by the LIFE Programme of the European Union and the Gordon and Betty Moore Foundation and will be available in English, Spanish, French, and Portuguese.

Francesca Recanati, Environmental specialist, and the lead author of the guidance, CDSB, stated:

“Whether a company is just starting out or already disclosing water-related information, the CDSB Water Guidance provides a wealth of useful tools and resources to help enhance corporate water-related disclosure, zooming in on risks and opportunities as well as the connectivity of water with other topics, such as biodiversity, land use and climate change.” 

The new guidance backs up the CDSB Framework and is part of a number of resources that help businesses find their way through the disclosure on the nexus between Climate, Water and Biodiversity, emphasising the interconnectedness of various environmental topics. The Biodiversity Guidance is due for release in later part of 2021. Earlier this year, CDSB also published a position paper addressing corporate reporting on social matters

Download the guidance here.

Source: CDSB