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CDP Water Security Questionnaire Preview and Reporting Guidance 2023 - Version Control

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CDP disclosure cycle 2023

Accessing questionnaire previews, reporting guidance, and scoring methodologies

CDP’s corporate questionnaire previews, reporting guidance, and scoring methodologies for climate change, forests and water security can be accessed from the guidance for companies page of CDP's website.

Submitting a response to the questionnaire(s)

Responses to questionnaires must be submitted via CDP's Online Response System (ORS), which is part of CDP's online disclosure platform. Please refer to Using CDP's Online Disclosure Platform for more details. Please note that while the questions themselves are the same in the questionnaire preview as they are in the ORS, the display format of some questions may differ, particularly for drop-down options and tables.

Sector-specific questions

Companies in high-impact sectors, in addition to the general questions, will be presented with questions specific to that sector. The rationale for developing a refined questionnaire for each of these sectors is outlined in the relevant sector introduction.

The sector-specific questions allocated to companies are defined by CDP's Activity Classification System (CDP-ACS). This system categorizes companies by focusing on the activities from which they derive revenue and associating these with the impacts to their business from climate change, water security and deforestation.

Please note that since each questionnaire includes sector-specific questions throughout, as not all questions will be applicable to your organization, some question numbers may skip.

Full and Minimum versions of the questionnaire

All organizations completing the climate change, forests and water security questionnaires are eligible to complete the full questionnaire.

In some cases, organizations may be eligible to complete a minimum version which contains fewer questions, and no sector-specific questions or data points.

Organizations are eligible to complete the minimum version of a questionnaire if they have an annual revenue of less than EUR/US$250 million*, and are disclosing in response to a request from a customer (i.e. CDP supply chain members), the CDP banks program members, the RE100 initiative, or the NZAM initiative.

Organizations will not be eligible to complete the minimum version questionnaire if they are disclosing in response to an investor request.

For information on scoring eligibility and implications, please see our Scoring Introduction.

* CDP reserves the right to remove the option of completing a minimum version questionnaire for previous responders to a questionnaire with an annual revenue of less than EUR/US$250 million, on the basis of the organization’s potential or existing environmental impact.

Timeline:

For any disclosure-related enquiries, please contact the CDP Help Centre or your regional CDP contact.

CDP water security questionnaire

This questionnaire is the property of CDP Worldwide, reproduction of all or part (including within software platforms) without permission of CDP Worldwide is prohibited. Please contact [email protected] for more information on this.

Introduction to CDP’s water security questionnaire

CDP uses transparency and accountability to drive corporations, financial markets, and governments to decouple growth from depletion of freshwater resources and allocate capital towards a water secure economy to achieve the Sustainable Development Goals. We do this by collecting information for investors, customers and policy makers on a company’s management, governance, use and stewardship of water resources.

The CDP water security questionnaire provides data users and the companies themselves with an insight on current and future water-related risks and opportunities. Along with CDP's water scoring methodology, the water security questionnaire helps companies to drive improvements in water management and enables benchmarking against leading practice.

The water security program has grown significantly since it was established in 2010, in terms of the numbers of companies disclosing, the value of associated assets and the number of investors and customers requesting the data. CDP now holds the world’s largest corporate water dataset, with more companies reporting than ever before.

General water security questionnaire structure

The structure and content of the water security questionnaire reflects trends in corporate water reporting, the evolving needs for sector-specific data, developments in public policy agendas, and greater alignment with CDP’s climate change and forests questionnaires.

The modular structure broadly reflects the narrative of the CEO Water Mandate Guidelines, assisting companies on a water stewardship journey and providing relevant data to investors, policy makers and others.

There are 12 modules in the water security questionnaire, including the Signoff, plus a module presented only to organizations that supply goods or services to the member companies of CDP’s supply chain program.

The journey through CDP’s general water security questionnaire includes the following:

• Corporate water accounting metrics
• Value chain engagement activities
• Business impacts
• Risk assessment procedures
• Risks, opportunities and responses to them
• Facility water accounting metrics
• Water governance and business strategy
• Targets
• Verification
• Plastics

Sector approach

• Companies in some sectors considered high-impact for water are presented with sector specific requests for information, either in addition to or instead of the general water data points.
• The rationale for developing a refined questionnaire for each of these sectors is outlined in each sector introduction.
• Questions that are unique to companies in a particular sector are labeled using a two-letter abbreviation within the question number (see below). Some general water questions, beginning with the letter W, may include sector-specific data requests. In the disclosure platform these will be presented only to companies in the relevant sector.

2023 water sectors:

• Agriculture: Agricultural commodities (AC); Food, beverage & tobacco (FB)
• Energy: Electric utilities (EU); Oil & gas (OG)
• Materials: Chemicals (CH); Coal (CO); Metals & mining (MM)

Water security questionnaire changes for 2023

For 2023, 73% of the 2022 questions are unchanged or just have a minor revision. Some questions have been modified, some have been removed and some new ones added.

The total number of questions has risen by 14 to 85 (not including sector specific questions or the supply chain module). Note that each company has a unique pathway through the questionnaires determined by, for example, its sector and its responses as it moves through each module. No company is presented with all questions.

Key changes include:

All companies

• New module on Plastics
  • Nine new questions, including plastics mapping, impact assessments, business risks, and targets. For companies with specific plastic production and/or use activities, there are questions regarding total weights, raw material sources, and circularity potential.
• Four removed questions:
  • W1.4a (2022), W1.4d (2022), W8.1b (2022), W10.2 (2022).
• Nine new questions
  • In W1 ‘Current state’: six new questions – one on emissions to water, two on hazardous substances, and three on value chain engagement.
  • In W3 ‘Procedures’: two new questions on water pollutant management.
  • In W8 ‘Targets’: one new question on categories for water-related targets.
• Five questions with a revised question dependency:
  • Questions no longer dependent on responses to W1.1: W1.2, W1.2b, W1.2d, W1.5 (2022 W1.4).
• Nineteen modified questions:
  • Nine in W1 ‘Current state’: W1.2, W1.2b, W1.2d, W1.2h, W1.2i, W1.2j on water accounting volumes; and W1.5 (2022 W1.4), W1.5d (2022 W1.4b), W1.5e (2022 W1.4c) on value chain engagement.
  • One in W2 ‘Business impacts’: W2.2 on fines and enforcement orders.
  • One in W3 ‘Procedures’: W3.3b on risk assessment processes.
  • Four in W6 ‘Governance’: W6.1a, W6.2a, W6.3, W6.4a on water policy, board oversight, management responsibilities, and employee incentives.
  • Three in W8 ‘Targets’: W8.1, W8.1b (2022 W8.1a), W8.1c on target categories and details.
• Eight questions with modified guidance: W2.1a, W4.1b, W4.1c, W4.2b, W4.2c, W4.3a, W4.3b, W7.4.
• Three questions with additional guidance (Example responses, Explanation of terms, Additional information): W3.3a, W6.6, W7.4.
• Five questions with a minor change: W2.1a, W3.3a W4.2, W4.2a, W6.2b.

Sector-specific

• Removed questions:
  • Eight sector-specific pollutant management questions replaced with two general questions (2023 W3.1 and W3.1a):
    • Chemicals sector: W-CH3.1 (2022) and W-CH3.1a (2022)
    • Electric utilities sector: W-EU3.1 (2022) and W-EU3.1a (2022)
    • Food, beverage, and tobacco sector: W-FB3.1 (2022) and W-FB3.1a (2022)
    • Oil and gas sector: W-OG3.1 (2022) and W-OG3.1a (2022)
• New questions:
  • Eight for the Agricultural Commodities sector:
  • W-FB0.1a/W-AC0.1a, W-FB1.1a/W-AC1.1a, W-FB1.2e/W-AC1.2e, W-FB1.2f/W-AC1.2f, W-FB1.2g/W-AC1.2g, W-FB1.3/W-AC1.3, W-FB1.3a/W-AC1.3a, W-FB1.3b/W-AC1.3b
  • Seven for the Coal sector:
  • W-MM0.1a/W-CO0.1a, W-MM1.3/W-CO1.3, W-MM1.3a/W-CO1.3a, W-MM3.2/W-CO3.2, W-MM3.2a/W-CO3.2a, W-MM3.2b/W-CO3.2b, W-MM3.2c/W-CO3.2c
• Eight questions with a revised question dependency:
  • Sector-specific questions no longer dependent on responses to W1.1:
    • Chemicals sector: W-CH1.3
    • Electric utilities sector: W-EU1.2a, W-EU1.3
    • Food, beverage, and tobacco sector: W-FB1.2e/W-AC1.2e, W-FB1.3/W-AC1.3
    • Metals and mining sector: W-MM1.3/W-CO1.3
    • Oil and gas sector: W-OG1.2c, W-OG1.3
• Two modified questions:
  • W-FB1.1a/W-AC1.1a, W-OG1.2c
• Four questions with a minor change:
  • W-MM0.1a/W-CO0.1a, W-MM3.2a/W-CO3.2a, W-MM3.2b/W-CO3.2b, W4.1c for CO

Revisions and changes are also indicated within the questionnaire as: no change, minor change, modified question, new question, modified guidance, additional guidance, or revised question dependency. 'Minor change' indicates wording edits and revisions to drop-down options or a simple clarification, while a modification indicates where the data requested has been revised.

A detailed document on water security question changes from 2022 to 2023 can be found on the Guidance page of the website.

Preparing your CDP response

Please find below information on the support materials and options available to companies, and important notes for completing your disclosure. Please review these notes carefully as you prepare your response, even if you have responded to the questionnaire in previous years.

CDP disclosure support materials

CDP provides a variety of support materials to help organizations disclosing to our questionnaires. Before completing the corporate questionnaires, we strongly recommend you read this Reporting Guidance, the Scoring Introduction, and relevant Scoring Methodology. Please also refer to the CDP Technical Notes and other guidance materials accessible from the guidance tool after signing in to the website, and see the Frequently Asked Questions on the website.

Reporting guidance

The reporting guidance in this document includes the following:

• Module-level guidance: for select modules this guidance provides an overview of key changes, sector-specific content for the module, and important disclosure notes. This section also presents question pathway diagrams showing the flow of questions through each module.
• Question-level guidance: at the question level, guidance is separated into the following components, to provide clarity around questions, terminology and requirements:

- Rationale: provides reasoning behind the inclusion of each question;
- Connections to other frameworks: notes on connections to the Sustainable Development Goals (SDGs), Global Reporting Initiative Standard 303-3, the CEO Water Mandate, S&P Global Corporate Sustainability Assessment, and the Ellen MacArthur Foundation Global Commitment for each relevant question in the water security questionnaire;
- Requested content: offers context around each question and requested criteria;
- Explanation of terms: provides detailed definitions for specific terminology;
- Example responses: for select questions, this provides an example of a response that would include all information requested; and
- Additional information: for select questions, this provides optional contextual information and sources related to the subject of the disclosure request.

• Glossary: viewable at the end of the reporting guidance, the glossary contains a subset of 'Explanation of terms'
• Appendix: River basin list — and South African Water Management Areas — by country/area

If you have any questions that are not answered in the reporting guidance, the additional guidance noted below, or our Frequently Asked Questions, please contact your local CDP contact or visit the CDP Help Centre.

Webinars and workshops

CDP hosts live webinars and workshops designed to aid you with environmental reporting.

Please visit the workshops and webinars and water security pages of CDP's website for more details.

CDP Reporter Services

CDP Reporter Services program offers tailored support, enhanced data access and thought leadership on managing and reporting environmental risk to your business. Access the tools you need to move from disclosure to leadership on integrating climate, forests management, and water security into your wider business strategy. For year-round, personalized disclosure support from a dedicated CDP account manager, a gap analysis of your previous response, final review before submission, and analytics tools to benchmark yourself against peers and understand best practice, contact [email protected]. Visit the Reporter Services page of CDP's website for more information.

CDP water consultancy solutions providers

CDP-accredited water consultancy solutions providers support companies looking to engage with and improve their water management. Partners are subject to selection criteria and once approved are able to work closely with companies to provide expertise on critical topics including but not limited to: water accounting, water risk assessment, the development of water strategies and development and implementation of corporate water stewardship plans. Visit the accredited solutions providers page of CDP's website or contact [email protected] to learn more.

Important notes for completing your disclosure

Acronyms

Avoid using bespoke internal acronyms unless required for your organization’s response, in which case please provide their meaning to enable correct analysis and scoring.

Blank responses

Leaving a response blank is interpreted as non-disclosure. For numeric fields, values of zero (0) imply a measurement has been made, and the value is zero (0). For numeric fields where no measurement has been made, please leave the field blank and provide an explanation in an open text field for that same question (e.g. 'Comment' (optional) or 'Please explain' (scored)). If there is no open text field for the question, you may provide an explanation in the 'Further information' field in the ORS at the end of your disclosure. Leaving a response blank and entering a value of zero (0) have different scoring implications. Please see the scoring methodology for more details.

Character limits

The character limits noted in the reporting guidance and in the ORS include spaces.

'Comment' column

Some questions include a column labelled as 'Comment'. Note that providing information in these columns is optional.

Company-specific information

Some questions request company-specific information, rationales, case studies and/or examples. This level of detail gives data users confidence that the issue at hand has been thoroughly considered in the context of the responding organization’s own business and not simply assessed in general terms.

• Be sure to include company-specific detail, such as references to activities, programs, products, services, methodologies, or operating locations unique to your company’s business or operations. A company-specific explanation should include details that make the answer true for the responding company and are distinct from other companies in the same industry and/or geography.
• Clear rationales are those which provide logical reasoning for methodologies, descriptions, decision, and actions.
• Case studies should be company-specific and should follow a “Situation-Task-Action-Result” (STAR) approach: 1) Situation: what was the context? 2) Task: what needed to be done/what was the problem to be solved? 3) Action: what action was taken? 4) Result: what was the final outcome?
• An example does not need to follow the STAR approach. It can be shorter than a case study but should include some company-specific detail.

For more details, refer to the Scoring introduction on the CDP website.

Consistency

CDP encourages a comprehensive and consistent response. Please ensure there is no conflicting information in your responses, both within a question and across the questionnaire.

Copy forward

The ‘copy forward’ functionality will be available in the ORS for companies that disclosed to CDP in previous reporting years. This functionality auto-populates your most recent answers into your questionnaire where applicable.

Note that this functionality may have been disabled for modified data points. The reporting guidance will indicate which questions have been modified. The Questionnaire Changes document on the guidance section of the CDP website lists all revisions from the previous year.

Please review the auto-populated answers carefully. It is your responsibility to ensure your answers are updated for the accuracy and completeness of your response.

Data accuracy

CDP recognizes that there may be uncertainty linked to data – this can arise from data gaps, assumptions, metering/measurement constraints including equipment accuracy etc. CDP allows estimated data to be submitted. However, an emphasis is placed on reporting transparently and this means that a company should always provide an explanation when its reported data is not accurate and detail the uncertainty (use the 'Please explain' or 'Comment' columns provided in the question).

Drop-down options ('Other, please specify')

Please select from the options provided whenever possible, and only select 'Other, please specify' when none of the listed options is appropriate. This greatly assists data analysis. If selecting 'Other, please specify', you must add a label that describes the option you are providing data for.

'Further information' field

At the end of the questionnaire, there is an opportunity to provide additional information or context that you feel is relevant to your organization’s response. This field is optional and not scored.

Mergers and acquisitions (M&As)

All disclosure should be defined by the organizational boundary applicable at the time of the stated reporting period. (Note that for CDP disclosure, organizations are encouraged to align their reporting period and organizational boundaries with their financial reporting). Regarding forward-looking disclosure, organizations should include information that was correct at the time of the stated reporting period (for example, for data points referring to the future or 'the next two years'). Organizations undergoing (or that have undergone) M&As need to consider the timing of the M&As and reporting period as follows:

• Organizations that were acquired after the end of the current reporting period: these should respond with what was planned (strategy, targets, etc.) before being acquired (i.e., during the reporting period). For transparency, where possible they may state where they consider that the forward-looking information may be subject to change due to the very recent acquisition.
• Organizations that were acquired during the reporting period: these should provide information that was applicable and correct to the best of their knowledge at the end of the reporting period. At the time of submitting their response to CDP, this information may not be the most up to date due to changes underway following the acquisition. For transparency, the company may state this in their disclosure where possible.

Personal data

It is important that you do not include the name of any individual or any other personal data in your response. For questions that ask for the positions of staff, out of respect for personal data privacy we are asking only for the position and not for the individual’s name or any other information relating to them.

Providing feedback to CDP

You can provide feedback to CDP on the content of our questionnaires and supporting documents through our online technical feedback form.

We are unable to respond individually to all feedback, but please be assured that all form submissions are reviewed and contribute towards our continuous improvement.

However, if you represent a responding organization and would like to request a response, please get in touch with your local CDP contact.

Introduction to CDP water security reporting guidance

Water reporting

Water presents a unique set of measurement and reporting challenges on both the local and global scales.

• First and foremost, water management is a local or regional issue. Local contexts matter. Challenges and opportunities depend on patterns of local precipitation, watersheds and aquifers, as well as the degree and nature of local use, and the extent and efficacy of water governance and regulation. Unlike a ton of carbon dioxide that will have the same impact whether emitted in Stockholm or Sydney, the geographical scale, location and timing of water use is critical. A cubic meter of water used in Sydney has very different consequences from a cubic meter used in Stockholm. This creates complexities in managing water use in a way that progresses water security for all, as well as in creating meaningful corporate water indicators.
• Standards for water reporting are not yet as consistently or universally established as those for GHG emissions.
• While GHG emissions which can be expressed in tons of CO₂e, there is no single or interchangeable quantitative unit of measurement for tracking the risks and impacts associated with water. Factors that must be considered include available volumes, water quality, the degree of competition in the region concerned, as well as future scenarios for physical, regulatory, market and technological changes.
• Compounding this complexity, the global nature of business and supply chains mean that water use is linked across multiple geographies. Even when their own operations or assets are not affected, many businesses may be exposed to and significantly affected by changing patterns of water availability. For large companies with complex supply chains containing potentially thousands of suppliers, assessing water use and related product or supply chain issues can be highly complex.

CDP’s approach to water reporting

Alignment

To support the development of standards that are both valuable for companies and provide investors, policy makers and other data-users with meaningful information, CDP works with a range of organizations; such as the CEO Water Mandate, the World Resources Institute, WWF, World Business Council for Sustainable Development, the Global Reporting Initiative (GRI), the Alliance for Water Stewardship (AWS), Ceres, Sustainability Accounting Standards Board (SASB) and similar organizations. Standardization is needed to facilitate transparency and reporting as well as to support consistency and comparability for data users.

CDP’s water security request and our reporting guidance draw on reporting principles, frameworks definitions and standards from these and other organizations and align wherever possible. Where differences remain, they reflect each organization’s particular approach and aims.

Note on alignment with the GRI 303: Water and Effluents 2018: organizations using the GRI standards for their corporate reporting will find it useful to refer to Linking GRI and CDP. It sets out the linkages between the information required for the GRI 303 standard and that requested for CDP’s 2018 water security questionnaire. As there have been very few revisions, it remains useful for 2023 disclosure to CDP.

Note on W10 Plastics module: These questions are informed by existing frameworks including the Ellen MacArthur Foundation and UN Environment Programme’s Global Commitment framework. Please refer to the CDP Technical Note on Plastics Disclosure section that sets out the linkages between W10 Plastics module and the Global Commitment.

Journey to water security

Our water security questionnaire is structured from start to finish as a framework to assist organizations to progress the maturity of their water management and corporate reporting. It presents a journey to water stewardship and water security.

Collecting and disclosing information on management and governance responses to risk and opportunities, as well as the integration of water into long term strategic objectives, provides data for decision making and catalyzes corporate action. This is the value of disclosure.

Water accounting

To progress water security for all and to minimize water-related risks, organizations must eliminate any detrimental impact on water ecosystems and resources. Impact and risk exposure occur as water flows into and out of a company’s boundaries, so CDP’s collects information to determine how well a company understands this flow. Companies are encouraged to account for all their interaction with water, and to minimize that interaction (e.g. through reduced withdrawals, efficiency improvements, or by changing their business activities). This means that CDP seeks more nuanced information than volumetric reductions in freshwater removal or consumption. Most important is that companies have robust monitoring and accounting in place for all aspects of their corporate hydrology, and that they demonstrate an understanding of their dependence on water.

Measurements of withdrawal, discharge and consumption take place as water crosses the company boundary, at either the corporate level or facility level. This makes the concept of the organizational boundary central to our disclosure request at the corporate and the facility level.

Context and geographic scale

Water presents local issues which need to be understood and managed at a local level; typically at river basin, or at least a country/area level, rather than the corporate level. Investors are increasingly interested in this type of granularity when it comes to assessing the water risk within their portfolios.

Some CDP data users wish to assess an organization’s ability to access the granular data needed for mature water management and sound risk management across all its operations and locations. This is deemed to be best practice. A separate module (W5) requests water accounting data for any facilities exposing the company to substantive water-related risk (note that we do not ask for data for all facilities).

In addition, CDP invites companies to report their risks at the river basin level and several questions include a column so that companies can indicate the location associated with their data. An organization will not have a comprehensive understanding of its risk exposure and the most appropriate response unless it is able to take account of local basin context and conditions. River basin level risk assessment is particularly relevant to a water stewardship approach to securing water resources as collaboration with other basin users and external stakeholders is central to understanding and managing risk.

Reporting risk

CDP provides its data users with information about the inherent risks faced by organizations. This allows them to independently assess the appropriateness and adequacy of the organization's response, and thus the residual risk and resilience of the business.

To provide data users with confidence in their disclosure, responding organizations are encouraged to give a full picture of their approach to risk assessment and how water-related issues have been integrated into their business strategy.

Reporting impacts

When referring to ‘impacts’, some frameworks and standards use the term to mean the effects of a business on communities and ecosystems, such as the CEO Water Mandate Guidelines and the GRI standards. CDP uses the term ‘impacts’ to refer either to effects on communities and ecosystems or to refer to the effects of water challenges on the business, i.e. ‘business impacts’, be they due to physical, regulatory or market drivers.

The questionnaire specifies impacts on the business or impacts on water security in different circumstances. For example, in W2 ‘Business Impacts’, CDP asks for information about past water-related impacts on the business and responses to them. Data users may judge a company’s potential future performance using this data.

Principles of true and fair reporting

The GHG Protocol outlines five principles to ensure a true and fair account of a company’s GHG emissions (see The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard developed by the World Resources Institute and the World Business Council for Sustainable Development). CDP suggests that all of these principles be adopted for the purpose of water reporting. These principles are as follows:

• Relevance: Ensure the water use inventory appropriately reflects actual water use and serves the decision-making needs of users – both internal and external to the company.
• Completeness: Account for and report on all water activities within the chosen inventory boundary. Disclose and justify any specific exclusion(s).
• Consistency: Use consistent methodologies to allow for meaningful comparisons of company’s use of water over time.
• Transparency: Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used. Transparently document any changes to the data, inventory boundary, methods, or any other relevant factors in the time series.
• Accuracy: Ensure the quantification of water use is sufficiently accurate to enable users to make decisions with reasonable assurance as to the integrity of the reported information.

Information is considered relevant if it contains the detail that users, both internal and external to the company, need for their decision-making. When considering what to disclose, please identify and report information that is likely to be of use and benefit to the audience requesting it (for example, the investment community and your customers).

Instructions for responding to the water security questionnaire

1. Units: Volumes must be reported in megaliters per year (1 megaliter = 1 million liters or 1,000 m³) in all questions, unless otherwise stated.

2. Values of zero: Entering a 0 (zero) figure implies that a measurement has been made, and the value being disclosed is 0 (zero). Do not enter a zero where you have no data to disclose.

3. River basins: From the drop-down list in specific questions, select the river basin associated with the disclosure, or select “Other, please specify” and provide the name of the river basin. (See CDP’s Appendix: River basin list — and South African Water Management Areas — by country/area).
CDP’s drop-down list of river basins aligns with the CEO Water Mandate’s Interactive Database of the World’s River Basins. For companies operating in South Africa, the list also includes the nine Water Management Areas for South Africa. You may wish to enter a sub-basin of a listed river basin. In this case use the “Other, please specify” option in the following format: “Putumayo, Amazon”.
For companies withdrawing water from large confined aquifers that do not discharge to the river basin they are located in, e.g. Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source.
If you do not know the river basin associated with the data you are disclosing, the following tools have the functionality to identify the river basin locations of facilities by typing in geolocation coordinates, for example:

- The CEO Water Mandate Interactive Database of the World’s River Basins
- The Water Footprint Tools - Water Footprint Network
- The Water Risk Filter - WWF
- The WRI Aqueduct Water Risk Atlas Tool - the World Resources Institute

W0 Introduction

Module Overview

This module requests information about your organization’s disclosure to CDP and will help data users to interpret your responses in the context of your business operations, timeframe and reporting boundary.

The information provided here should apply consistently to your responses throughout the questionnaire and be complete and accurate as it may determine response options presented in subsequent modules.

For this reason, you should respond to every question in this module and save your response before accessing the rest of the questionnaire.

Key changes

Sector specific changes only

• New questions:
  • One for the Agricultural Commodities sector: W-FB0.1a/W-AC0.1a
  • One for the Coal sector: W-MM0.1a/W-CO0.1a
• Click here for a list of all changes made this year.

Sector-specific content

• Additional questions for: Chemicals, Electric Utilities, Food, Beverage & Tobacco, Agricultural Commodities, Metals & Mining, Coal, and Oil & Gas.

Pathway diagram - questions

This diagram shows the questions contained in module W0. To access question-level guidance, use the menu on the left to navigate to the question.

Introduction

(W0.1) Give a general description of and introduction to your organization.

Change from last year

No change

Rationale

This will help data users interpret your responses within the context of your business activities and sector.

Response options

This is an open text question with a limit of 5,000 characters.

Requested content

General

• Provide information about your operations and business activities to help data users understand your business and how it relates to water risk and corporate strategy. This information provides context for your answers throughout this disclosure.

Explanation of terms

• Organization: Throughout this information request, “your organization” refers collectively to all the companies, businesses, other entities or groups that fall within the definition of your reporting boundary (provided in W0.5). This term is used interchangeably with “your company”, but CDP recognizes that some disclosing organizations may not consider themselves to be, or be formally classified, as “companies”.

(W0.2) State the start and end date of the year for which you are reporting data.

Change from last year

No change

Rationale

This will help data users interpret your responses in relation to the timeframe reported.

Response options

Please complete the following table:

Requested content

General

• Apply this reporting year to your answers for the entire questionnaire.
• The current reporting year is the most recent 12-month period for which data is reported.
• The investment community generally prefers a company's disclosure period to match the fiscal year for their financial jurisdiction. This facilitates the assessment of environmental performance data in alignment with their financial performance data.
• CDP recommends companies provide a year for which they have complete data for their response if possible. If you do not have data for the entirety of your reporting year, you have the option to extrapolate or estimate your data to cover the entire reporting year.

(W0.3) Select the countries/areas in which you operate.

Change from last year

No change

Rationale

This will help data users interpret your responses.

Response options

Please complete the following table:

Requested content

General

• Select all countries/areas in which you operate from the drop-down list provided.

(W0.4) Select the currency used for all financial information disclosed throughout your response.

Question dependencies

• All disclosed financial figures throughout the questionnaire will be in the same currency. The currency reported in this question will apply to all reported figures throughout this request.

Change from last year

No change

Rationale

CDP encourages companies to report financial figures associated with impacts, risks, and opportunities. Establishing a single currency will facilitate the collection of comparable financial information. This will benefit investors and other data users when assessing the costs and benefits reported by your organization.

Response options

Please complete the following table:

Requested content

General

• The currency you select will be applied to all financial information and metrics reported in your disclosure.
• For example, if you select USD ($) here, this will determine the currency applied to the figure you give for ‘Financial impact’ reported in W2.1a.

(W0.5) Select the option that best describes the reporting boundary for companies, entities, or groups for which water impacts on your business are being reported.

Change from last year

No change

Rationale

This will help data users interpret how your responses relate to your business operations.

Response options

Select one of the following options:

• Companies, entities or groups over which financial control is exercised
• Companies, entities or groups over which operational control is exercised
• Companies, entities or groups in which an equity share is held
• Other, please specify

Requested content

General

• References in the questionnaire to “your organization” are to the entities within your organizational boundary for which you are providing information.
• This question asks you to define the organizational boundary for which you are supplying data. This indicates the way your organizational entities such as groups, businesses, and companies have been identified for inclusion within your reporting boundary. Please apply this definition consistently when responding to questions.
• The options in the drop-down list for this question are based on the GHG Protocol Corporate Standard:

- Financial control: An organization has financial control over an operation if it has the ability to direct the financial and operating policies of the operation with a view to gaining economic benefits from its activities. Generally, an organization has financial control over an operation for GHG accounting purposes if the operation is treated as a group company or subsidiary for the purposes of financial consolidation.
- Operational control: An organization has operational control over an operation if it or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation.
- Equity share: Under the equity share approach, a company accounts for GHG emissions from operations according to its share of equity in the operation. The equity share reflects the economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. Typically, the share of economic risks and rewards in an operation is aligned with the company’s percentage ownership of that operation, and equity share will normally be the same as the ownership percentage. Where this is not the case, the economic substance of the relationship the company has with the operation always overrides the legal ownership form to ensure the equity share reflects the percentage of economic interest. The principle of economic substance taking precedence over legal form is consistent with international financial reporting standards.
- Other, please specify: select this only if none of the other options apply. If you select this option, provide a label in the text field provided.

• Note: throughout this information request, when calculating figures for corporate level reporting take a “consolidation approach”, unless stated otherwise. The information you provide throughout the information request should be one “consolidated” result, covering all of the companies, entities, or businesses within your reporting boundary and aggregating more granular data at facility/business level, for example. Please consistently apply this organizational boundary when responding to questions unless specifically asked for data about another category of activities.
• Note: in W0.6a you have the opportunity to explain any data you have excluded from the reporting boundary you select here.

Explanation of terms

• Company: throughout this information request, “your company” refers collectively to all the companies, businesses, organizations, other entities or groups that fall within the definition of your reporting boundary. It is used interchangeably with "your organization".
• Organization: this term is used interchangeably with “your company”. CDP recognizes that some disclosing organizations may not consider themselves to be, or be formally classified, as “companies”.
• Reporting boundary: this determines which organizational entities, such as groups, businesses and companies, are included in or excluded from your disclosure. These may be included according to your financial control, operational control, equity share, or another measure.

Additional information

• Determining the organizational boundary: When determining the organizational boundary for reporting purposes, CDP recommends that companies consult their legal or accounting advisors. For more guidance on determining reporting boundaries, particularly where joint ventures or complex operational structures are concerned, refer to the GHG Protocol. Although the protocol refers to GHG emissions reporting, the general definitions may be applied to water reporting.

• The GHG Protocol defines two approaches: the control approach and the equity share approach, which will lead not only to different organizational boundaries, but distinct ways of consolidating the figures at the corporate level.
• Control approach: An organization measures the volume of its water withdrawals/discharges from operations over which it has financial or operational control. The following text is adapted from the GHG Protocol to refer to water:

- An organization has financial control over an operation if it has the ability to direct the financial and operating policies of the operation with a view to gaining economic benefits from its activities. Generally, an organization has financial control over an operation for water accounting purposes if the operation is treated as a group company or subsidiary for the purposes of financial consolidation. An organization has operational control over an operation if the organization or one of its subsidiaries has the full authority to introduce and implement its operating policies at the operation.

• Equity share approach: Organizations can also report their water data based on their economic share. The following text is adapted from the GHG Protocol to refer to water:

- Under the equity share approach, a company accounts for its water data from operations according to its share of equity in the operation. The equity share reflects the economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. Typically, the share of economic risks and rewards in an operation is aligned with the company’s percentage ownership of that operation, and equity share will normally be the same as the ownership percentage. Where this is not the case, the economic substance of the relationship the company has with the operation always overrides the legal ownership form to ensure the equity share reflects the percentage of economic interest. The principle of economic substance taking precedence over legal form is consistent with international financial reporting standards.

• The table below clarifies how water accounting data should be consolidated and reported in certain situations. The table below is based on page 19, Chapter 3 of the GHG Protocol (Revised Edition). It has been adapted to refer to water accounting instead of GHG accounting.

(W0.6) Within this boundary, are there any geographies, facilities, water aspects, or other exclusions from your disclosure?

Change from last year

No change

Rationale

CDP seeks to share comprehensive and representative water data. If companies do need to exclude areas of their business from their disclosure, data users must be informed of the exclusions as this may affect their analysis.

Response options

Select one of the following options:

• Yes
• No

Requested content

General

• References throughout the questionnaire to “your organization” include all the entities within your reporting boundary for which you are providing information. Please apply this logic consistently when responding to questions. However, you may exclude particular geographies, business activities, and/or small facilities for which it is difficult to gather data when water impacts are sufficiently small. This also applies to selected water inputs/outputs.
• In all cases, the following principles of relevance and transparency must apply to all disclosures (adapted from the GHG Protocol):

- Relevance: Ensure the disclosure appropriately reflects the water use of the company and serves the decision-making needs of users – both internal and external to the company.
- Transparency: Address all relevant issues in a factual and coherent manner, based on a clear audit trail. Disclose any relevant assumptions and make appropriate references to the accounting and calculation methodologies and data sources used.

• Any groups, companies, businesses or organizations falling within your organizational boundary but not included in your disclosure should be reported in W0.6a.
• Note that in some questions, e.g. in the facility level water accounting section, we will ask you to provide data only for facilities where significant water risk has been identified, rather than all facilities within your reporting boundary.

Explanation of terms

• Facilities: “Facilities” may be used throughout this questionnaire as a broad term and not restricted to a particular site or grouping of fixed buildings and factories. For example, if your organization is in the extractive industries you might normally collate business information for assets or business units, and so you may wish to define ‘facility’ information in this way.

Additional information

The GHG Protocol states that an acknowledgement of all exclusions should be made each year to enhance transparency despite disclosure of the same exclusion in previous years. This ensures all data users are always aware of what data has been included in your response.
For further information on allowable exclusions, please refer to the GHG Protocol and the CDP Water Security Scoring Methodology.

(W0.6a) Please report the exclusions.

Question dependencies

• This question only appears if you select “Yes” in response to W0.6.

Change from last year

No change

Rationale

CDP seeks to share comprehensive and representative water data. Data users need to be informed of exclusions that may affect their analysis.

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

[Add Row]

Requested content

General

• Identify and explain when any of the following are being excluded from your disclosure:
  • Geographical locations, e.g. low water usage or data limitations may make reporting infeasible for operations in a country/area/region.
  • Activities, e.g. a product line, type of business process, or type of supplier, may be excluded due to limited data or reporting feasibility.
    • Organizations that have ‘water supply networks’ as part of their activities under CDP’s Activity Classification System may exclude water accounting data in relation to the production of drinking water in Modules W1 and W5.
  • Facilities may be excluded due to recent mergers, acquisitions and divestitures (which have taken place during the reporting year), outsourcing and in-sourcing of activities (smaller facilities for which it is not currently possible to track water use may also be considered for exclusion).
  • Water inputs and outputs, e.g. a company may use rainwater at some facilities but not track the quantity or quality of this source in which case the source may be considered for exclusion.
  • Any groups, companies, businesses or organizations that fall within your organizational boundary but are not included in your disclosure.
• For all exclusions, clearly explain why they are not included in your disclosure. Provide a reasonable explanation as to how you arrived at this exclusion; e.g., as a result of a high-level risk scanning exercise.

Example response

(W0.7) Does your organization have an ISIN code or another unique identifier (e.g., Ticker, CUSIP, etc.)?

Change from last year

No change

Rationale

ISIN codes and other market identifiers are used globally in the identification of securities such as bonds, futures, and stocks. Providing your organization’s unique identifier(s) will increase the transparency of your response.

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Requested content

General

• If your organization has multiple unique identifiers, add a row for each.

Provide your unique identifier (column 2)

• Ensure that you enter the correct format for your unique identifier. For example, ISIN codes include a two-letter country/area code, followed by a nine-character alphanumeric identifier and a single check digit.

Explanation of terms

• ISIN: International Securities Identification Number, a 12-character alphanumeric code used to identify a security, such as a stock or bond. It is structured with the first two letters referencing the country/area of origin of the issuer for the security, in accordance with ISO 3166. The second grouping consists of nine characters made up of digits and letters, which is the unique identifying code for the security. In the U.S. and Canada this is known as the CUSIP number (see below). The final digit is the check digit, which ensures the authenticity of the code.
• CUSIP number: Committee on Uniform Security Identification Procedures number, a 9-character alphanumeric code that identifies a security for the purposes of facilitating clearing and settlement of trades. CUSIPs are used to distinguish, among other reasons, between multiple share classes or bond tranches. CUSIPs are mostly used in the United States and Canada.
• Ticker symbol: A ticker symbol, also known as a stock symbol, is a unique series of letters assigned to a security for trading purposes. Ticker symbols are usually related to the organization’s name, and additional letters denote additional characteristics such as share class or trading restrictions.
• SEDOL code: Stock Exchange Daily Official List code, a 7-character identification code consisting of two parts: a 6-character alphanumeric code and a trailing check digit. SEDOLs issued prior to January 26, 2004 were composed only of numbers. SEDOLs serve as the National Securities Identifying Number for all securities issued in the United Kingdom.

W1 Current state

Module Overview

The promotion of water security for all is supported when companies:

• Reduce their dependency on fresh water sources and track their progress; this is additionally important where fresh water scarcity may pose water quality risks and impacts.
• Collect and share volumetric data on their interactions with water resources.
• Are aware of the water intensity of their value creation.
• Consider water throughout their value chain, beyond the fence-line of their direct operations.

Clean freshwater is becoming increasingly scarce, and this can impact operations relying on large volumes of water – either through absolute availability or through rising costs for water. The information in this module allows CDP data users to build a picture of the dependence of your direct operations and your wider value chain on sufficient amounts of water of a particular quality, currently and for future growth, and where in the value chain most dependence on water lies. To understand an organization’s resilience, it is important to understand the potential to reduce reliance on freshwater sources.

The questions allow your company to demonstrate how well it understands its corporate hydrology by providing information on the monitoring of relevant water aspects, and volumetric data on withdrawals - including withdrawals in water stressed areas, discharges - including discharges by level of treatment, and consumption. CDP also requests companies to comment on their projections for water accounting data.

In addition to volumetric data, in order to protect water quality, companies are requested to report on their emissions to water and their use of hazardous substances.

The module also asks about your engagement activity around water in your value chain and a rationale for it. In regions where water sources are highly restricted, your organization’s water consumption patterns can influence relations with other stakeholders and your access to water can be dependent on those relationships. Engagement can also identify opportunities, such as innovation in your supply chain to reduce dependency and in product design to reduce water-related impacts.

Investors use this current state information to better assess the adequacy, robustness and relevance of your water governance, management and stewardship activities, as well as your disclosure of your water risks and opportunities.

The information requested in sections W1.1 and W1.2 may help companies with their climate-related disclosures in line with the TCFD recommendations which recognise that a reliance on the availability of water exposes a company to climate-related, financial risk.

Note:

• Throughout the water security questionnaire, CDP has broadened the scope of questions about the supply chain to include other phases of the value chain. This will be particularly relevant to companies whose activities may be constrained or otherwise affected by water related issues beyond their direct operations and supply chains. It reflects a widening of company focus to, and greater investor interest in, risk exposure, opportunities and impacts within the value chain.
• W1.2 requests water accounting information at the corporate level. Module 5 asks for facility-level volumetric data - only for facilities that expose your organization to substantive financial or strategic risks, and so it is requested after you have reported your risk exposure in W4.

Disclosure note

CDP’s approach to reporting water accounting data

• When reporting volumetric data please read the guidance for each question as well as the CDP Technical Note on water accounting definitions.
• To reduce their impact on water ecosystems and resources as well as their need to manage water-related risks, organizations should minimize and be able to account for all their interaction with water. For this reason, CDP’s focus is the collection of information to determine how well a company understands the flow of water into and out of its boundaries, and whether they have robust monitoring and accounting in place for all aspects of their water use.
• Definitions: CDP is looking for comparable data, reported against a standard methodology/definition. To ensure the quality of our data and a fair scoring methodology, CDP definitions should be used for all disclosures. This is particularly relevant where there is a lack of standardization. Companies must not provide water accounting data that does not align with the definitions given. Please refer to CDP’s Technical Note on water accounting.
• Units: Volumes must be reported in megaliters per year (1 megaliter = 1 million liters or 1,000 m3) in all questions, unless otherwise stated.
• Blank cells: Please ensure when responding to these water accounting questions that cells are only intentionally left blank if you have no data to disclose. Blank cells are interpreted as non-disclosure, i.e. information is not available due to lack of measurement or choosing not to disclose, and are therefore awarded no points by the scoring methodology.
• Values of zero: entering a zero implies a measurement has been made, and the value is zero. For example, a value of zero consumption reported indicates that no water is incorporated into products or waste products or lost by evaporation from the company. Do not use a zero to indicate a lack of data. If a company enters a zero for discharge, it should provide an explanation.
• Data accuracy: CDP recognizes that there may be uncertainty linked to water accounting information that could impact on data accuracy. Uncertainty can arise from data gaps, assumptions, metering/measurement constraints including equipment accuracy, data management, etc. The emphasis should be on reporting transparently and on providing an explanation for why reported data is uncertain or wholly or partially estimated or modelled, rather than sourced from direct measurements.

Key changes

• Two removed questions: W1.4a (2022) and W1.4d (2022) merged into other value chain engagement questions.
• Six new questions:
  • W1.2k requests details of your organization’s emissions of nitrates, phosphates, pesticides, and other priority substances to water.
  • W1.4 asks whether products contain hazardous substances.
  • W1.4a requests the percentage of revenue associated with products containing hazardous substances.
  • W1.5a asks whether suppliers are assessed according to their impact on water security.
  • W1.5b asks whether suppliers have to meet water-related requirements.
  • W1.5c requests details of water-related requirements for suppliers.
• Modified questions:
  • W1.2 has been revised to include measuring and monitoring of emissions to water.
  • W1.2b and W1.2d have been revised to request your company’s five-year forecast of water accounting volumes.
  • W1.2h, W1.2i, W1.2j have a new column for companies to indicate the primary reason for changes in water accounting volumes.
  • W1.5 (2022 W1.4) has been merged with (2022) W1.4d and modified to capture reasons for not engaging suppliers and other value chain partners.
  • W1.5d (2022 W1.4b) has been merged with (2022) W1.4a and modified to update the types and details of supplier engagement and to focus on engagement with suppliers with a substantive impact on water security.
  • W1.5e (2022 W1.4c) has been restructured from an open text field into a table to allow companies to report in a standardised manner.
• Questions with a revised question dependency:
  • Questions no longer dependent on responses to W1.1: W1.2, W1.2b, W1.2d, W1.5 (2022 W1.4)

Sector-specific changes

• Nine new questions:
  • Seven for the Agricultural Commodities sector:
    • W-FB1.1a/W-AC1.1a, W-FB1.2e/W-AC1.2e, W-FB1.2f/W-AC1.2f, W-FB1.2g/W-AC1.2g, W-FB1.3/W-AC1.3, W-FB1.3a/W-AC1.3a, W-FB1.3b/W-AC1.3b.
  • Two for the Coal sector:
    • W-MM1.3/W-CO1.3 and W-MM1.3a/W-CO1.3a
• Modified questions:
  • W-FB1.1a/W-AC1.1a response options were added to include more agricultural commodities with a critical impact on water security.
  • W1.2 has been revised for CO to include measuring and monitoring of entrained water.
  • W-OG1.2c has been revised to request your company’s five-year forecast of water accounting volumes.
• Questions with a revised question dependency:
  • Questions no longer dependent on responses to W1.1:
    • Chemicals sector: W-CH1.3
    • Electric utilities sector: W-EU1.2a, W-EU1.3
    • Food, beverage, and tobacco & Agricultural commodities sectors: W-FB1.2e/W-AC1.2e, W-FB1.3/W-AC1.3
    • Metals and mining & Coal sectors: W-MM1.3/W-CO1.3
    • Oil and gas sector: W-OG1.2c, W-OG1.3
• Click here for a list of all changes made this year.

Sector-specific content

• Additional questions presented in:
  • W1.1 for Food, Beverage & Tobacco and Agricultural Commodities.
  • W1.2 for Electric Utilities, Oil & Gas, Food, Beverage & Tobacco, and Agricultural Commodities.
  • W1.3 for Chemicals, Electric Utilities, Food, Beverage & Tobacco, Agricultural Commodities, Metals & Mining, Coal, and Oil & Gas
• Additional response options presented in W1.2 for Oil & Gas, Metals & Mining, and Coal.

Pathway diagram - questions

This diagram shows the questions contained in module W1. To access question-level guidance, use the menu on the left to navigate to the question.

Dependence

(W1.1) Rate the importance (current and future) of water quality and water quantity to the success of your business.

Change from last year

Revised question dependency

Rationale

A dependence on good quality freshwater resources may pose a risk to companies where there is social, ecological or economic competition for those resources, or an otherwise unreliable supply. An ability to switch to using lower grade water mitigates that dependence, could improve a company’s water security and reduces pressure on freshwater sources.

This question asks companies to disclose their dependence on access to good quality freshwater as this could limit their ability to switch to using lower quality water without incurring a cost to the business through having to treat the water, for example.

Importance is independent of absolute volumes. For example, a company could require only a small amount of water used for an integral part of production for which access to alternative water sources could be restricted due to other local demands. The relative importance of access to that small volume would be considered as high.

Assessing how important access to good and lower quality water is to your organization is the first step to deciding how water-related issues may potentially present a risk to your company.

This information helps investors to understand why you have disclosed certain risks later in this questionnaire. It also demonstrates the ways that water could potentially constrain or enhance your business strategy.

Response options

Please complete the following table:

Requested content

General

• When answering this question, consider your organization’s dependence on good quality freshwater versus lower quality water and how this has changed or might change over time.
• ‘Good quality freshwater’ is any water used for your organization’s activities that must be of a quality requiring only minimal treatment to be acceptable for domestic, municipal or agricultural uses or safe for freshwater ecosystems. A company is considered dependent on this if it is not possible to use a lower quality water instead.
• ‘Importance’ should be considered in terms of the need for secure access to, and the availability at certain times of, an amount of water (large or small) that is sufficient for your operations; and not simply in terms of your net water consumption. So, activities involving large volumes of water would be expected to answer “Vital” or “Important” because large withdrawals would be required, even if discharges were also large resulting in relatively low consumption.
• Organizations dependent on freshwater of low quality (e.g., for the mining industry, categories 2 and 3 of the Water Accounting Framework from the Mineral Council of Australia) should indicate this dependency in row 2 (…recycled, brackish and/or produced water sources). Dependency on low rather than high quality water reduces pressure on good quality freshwater sources.

Importance rating (columns 2-3)

• CDP recognizes that the importance ratings are subjective. The following description of the categories aims to assist with comparability rather than providing rigid definition and general examples are given.
  • Vital: Water is of ‘vital’ importance when future production could be compromised, and output and finances affected at the corporate level, if the water supply was insufficient – either in terms of quantity and quality - in the locations of your production processes or your value chain. When water is vital for product use, scarcity may curtail sales or have reputational implications.
  • Important: access to sufficient volumes and good quality water is required in direct or indirect operations, though these operations may not be water intensive and/or diversification of supply chain could mediate risk.
  • Neutral: water quality can be poor as long as enough water is available.
  • Not very important: water is not a key component of operations directly or indirectly but a local issue e.g. drought or poor water quality, or localized flooding may impact on local operations or supply chain. However, this would not affect the business overall.
  • Not important at all: water is not a key component of operations directly or indirectly and water quantities in particular are of less concern.
  • Have not evaluated: have not evaluated how much water or the quality of water required for operations and/or value chain.
• When considering the importance rating for indirect use, you should include the importance of water in all stages of your value chain that are upstream and downstream of your direct operations; e.g. within your supply chain, and also for the use/consumption of your products or services.

Please explain (column 4)

• State the primary use of water for both the direct and indirect parts of your value chain, for both good quality freshwater and lower quality options. Describe how water use is distributed across the value chain; giving percentages if possible.
• Describe how you have determined your stated importance ratings for water quality and quantity for both good quality and lower quality options.
• Specify how future water dependency is likely to differ from the current, and provide an explanation for your answer.

Explanation of terms

• Direct operations: An organization’s operations include anything it does itself for the purpose of producing goods and services and maintaining the functionality of the business. This covers any internal supply chains between the organization’s business units. For example, a business unit within a company that supplies components to another business unit within the company would be considered part of the organization’s direct operations.
• Direct water use: Includes all water that is used for activities within your organization (as defined by your ‘reporting boundary’).
• Good quality freshwater: Any water used for your organization’s activities that must be of a quality requiring only minimal treatment to be acceptable for domestic, municipal or agricultural uses or safe for freshwater ecosystems. A company is considered dependent on this if it is not possible to use a lower quality water instead. Water quality can refer to physical, chemical, biological, and organoleptic properties of water. ‘High quality’ fresh water sources, of potable standard, are typically characterized as having concentrations of dissolved solids less than 1,000 mg/l.
• Indirect water use: Includes all water use that takes place anywhere within your value chain outside your direct operations and direct control. This includes water use upstream of your direct operations, use such as by your suppliers, and downstream, for example water needed for the use of your products.
• Sufficient amounts of recycled, brackish and/or produced water: This refers to any low quality water requiring significant treatment to be acceptable for human consumption or other purposes, and for which the source can be easily substituted. Water quality can refer to the physical, chemical, biological, and organoleptic properties of water.
• Water availability: The natural runoff (through groundwater and rivers) minus the flow of water that is required to sustain freshwater and estuarine ecosystems and the human livelihoods and well-being that depend on these ecosystems. Water availability typically varies within the year and also from year to year. Water availability might be reduced by decreases in both the water quantity and quality of water resources (Adapted from CEO Water Mandate's "Corporate Water Disclosure Guidelines").
• Water quality: Refers to the physical, chemical, biological and organoleptic (taste-related) properties of water (see CDP’s definition for “Good quality freshwater”) (adapted from CEO Water Mandate's "Corporate Water Disclosure Guidelines").

Company-wide water accounting

(W1.2) Across all your operations, what proportion of the following water aspects are regularly measured and monitored?

Question dependencies

• Your response to W1.2 will determine which subsequent questions are presented. If your response to W1.2 is amended, data in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions.
• If you select “Not monitored” or “Not relevant” in response to W1.2, you will not be able to disclose associated volumetric data in this section. The guidance for each question indicates if it is a dependent question.

Change from last year

Modified question; Revised question dependency

Rationale

This question allows your company to indicate to investors, customers, and other data users the extent to which it monitors different aspects of its water use. Comprehensive water accounting is a first step in understanding the importance of water to your business and any potential water-related impacts to your business. This data may also be relevant to a company’s regulatory compliance.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Water Consumption

Water Use

CEO Water Mandate

Current state: Performance

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

• Note: organizations responding to an electric utilities, metals & mining, coal, or oil & gas sector request should refer to additional sector-specific guidance on this question at the end of the "Requested content" section.

General

• This question seeks a company-wide response about your monitoring of various water aspects. “Across all your operations” refers to all entities included in your reporting boundary, indicated in W0.5.
• Please refer to CDP’s water accounting definitions (included in CDP Technical Note – Water Accounting Definitions) before completing this question.
• You should only select “Not monitored” if you do not collect any data on these water aspects across your operations. If you have data from any information sources, you should reflect this in your response by indicating the percentage of sites/facilities/operations this represents in the “% of sites/facilities/operations” column.
• If water accounting information cannot be provided for all operations within your reporting boundary, then use column 4 to explain the level of coverage.
• The proportion of sites/facilities/operations reported in column 1 is not considered an indication of the proportion of total water volumes monitored in your organization. It provides organizational coverage of monitoring activity only.
• Note that for column 1, ‘sites/facilities/operations’ could include a broad variety of groupings of business operations, assets, fixed buildings, factories or sites etc. A company-specific explanation may be provided in column 4.

Water aspect (column 0)

• Definitions for each type of water aspect are included in the ‘Explanation of terms’ for this question (and repeated in the Glossary).

% of sites/facilities/operations (column 1)

• Select the proportion of your organization’s facilities that are regularly (at least annually) measured and monitored for each of the defined aspects; e.g. a company that has 100 facilities across its total operations and regularly measures and monitors total volumes of water withdrawals for 50% (50 facilities) would select “26-50”.
• If a water aspect is only relevant to a proportion of your facilities, report the percentage of these facilities for which you measure and monitor the given water aspect and provide your explanation in column 4. For example, a company has 100 facilities across its total operations out of which “water discharge quality by effluent parameters” is only relevant to the operation of 50% (50 facilities). If the company regularly measures and monitors water discharge quality by effluent parameters for all relevant facilities (50 facilities), they would select “100%” and state in column 4 that the relevance of this water aspect was considered.
• Select ‘Not relevant’ if it is not technically feasible or technically desirable for your organization to monitor this aspect; e.g. your operations do not consume water so measurement of this is not required, you discharge to a single destination so do not monitor discharge destinations, your company does not recycle/reuse water because it is not considered cost effective. Provide your explanation in column 4.
• Select ‘Not monitored’ if your company does not monitor this aspect, though it would be technically possible or desirable; e.g. your company does recycle/reuse water but it is not yet monitored at the corporate level. Provide your explanation in column 4.

Frequency of measurement (column 2)

• This column is not presented for the rows of any water aspects where ‘Not monitored’ or ‘Not relevant’ is selected in column 1.
• If you have multiple frequencies of measurement across different sites/facilities/operations, select the one that applies to the majority of your sites/facilities/operations.
• Note that this column requests data on your frequency of measurement, not frequency of reporting or compiling of information.

Method of measurement (column 3)

• This column is not presented for the rows of any water aspects where ‘Not monitored’ or ‘Not relevant’ is selected in column 1.
• Explain the method of measurement of your water aspects, e.g., through direct monitoring, estimation from a hydrological model, or other secondary source of information.
• If you indicated that you monitor ‘Water withdrawals quality’ to determine the suitability of the water for its intended use, you may include a list of parameters measured in this column. This row supports the aims of the UN Environment Global Environment Monitoring System for Freshwater (GEMS/Water), a long-term project to generate data flows on global water quality.

Please explain (column 4)

• If you selected ‘Not relevant’ in column 1, provide a brief explanation of why this water aspect is not relevant for your company and whether this water aspect is expected to be relevant in the future.
• If you selected ‘Not monitored’ in column 1, provide a brief explanation of why this water aspect is not monitored in your company.
• If you selected a percentage in column 1:
  • Provide an explanation for your response in column 1; such as why your organization measures/monitors the water aspect at this proportion of its operations, and explain which sites/facilities/operations are excluded and why.
  • State if your response in column 1 relates to facilities, sites or operations, or another kind of grouping, and explain how you are using the term; e.g. “For our company, ‘facilities’ refers to our warehouses and retail outlets”; “Our response in this row relates to our different geographic operations. We do not have facilities or sites because we provide a range of services that are not tied to a specific location”.

Explanation of terms

• Boundaries of your organization: This term is key within CDP water accounting definitions and is a management boundary, rather than a physical boundary or a legal entity. Water is considered to have crossed the boundary of your organization, at either the corporate or site level, when your organization in any way uses it, comes into contact with it, is required to manage it or when it becomes incorporated into your products. It therefore includes any water use and management by your organization outside of its physical corporate fence; for example, to provide a street cleaning service or in fields remote from a processing plant. The scope of this organizational boundary is defined by your chosen reporting boundary.
• Measurement: The collection of quantified data for a water aspect - either as a single volume/quality figure or an aggregation of volumes/quality figures.
• Monitoring: This is the tracking of measurements over time, i.e. a trend or indication of change in measured figures.
• Produced water: Water which enters the organization’s boundary as a result of the extraction, processing, or use of any raw material, so that it must be managed by the organization. When reporting to CDP, this water should not be counted as recycled water when put to use within a single cycle of a business process. Examples of produced water include moisture derived from vegetation such as in sugar cane crushing and the water content in crude oil. (Note that companies with oil and gas activities should refer to CDP’s sector specific guidance for this water aspect).
• Entrained water (Metals & mining and coal sectors only): In the mining industry, entrained water refers to the volumes of water in the raw material.
• Produced water (Oil & gas sector only): Water that is brought to the surface during the production of hydrocarbons including formation water, flow-back water and condensation water (adapted from IPIECA's "Oil and gas industry guidance on voluntary sustainability reporting", 4th edition, 2020).
• Recycled/reused water: Water and wastewater (treated or untreated) that has been used more than once before being discharged from the organization’s boundary, so that water demand is reduced. This may be in the same process (recycled), or used in a different process within the same facility or another of the organization’s facilities (reused). It can include wastewater re-used from household processes such as washing dishes, laundry, and bathing (grey water).
• Safely managed WASH services: The universal provision of safely managed water, sanitation, and hygiene services has dedicated targets within the Sustainable Development Goals (SDG 6.1 and 6.2). As a minimum, this disclosure refers to a company’s tracking of its provision of drinking water for all workers, available when needed and from sources compliant with faecal and chemical standards, as well as sanitation facilities where excreta are safely disposed in situ or transported and treated offsite.
• Water consumption: The amount of water that is drawn into the boundaries of the organization and not discharged back to the water environment or a third party over the course of the reporting year.
• Water discharges – total volume: The sum of effluents and other water leaving the organization’s boundary and released to surface water, groundwater water or to third parties over the course of the reporting year.
• Water discharges – volumes by destination: This refers to the proportion of your discharges that are tracked to different types of discharge destinations; e.g. freshwater, brackish surface water/seawater, groundwater, or third parties.
• Water discharges – volumes by treatment method: This refers to the proportion of your discharge that you track according to treatment method applied before being returned to the environment - primary, secondary, or tertiary treatment types etc. Different industries will have different requirements to meet compliance standards, or a company may have an internal standard they adhere to.
• Water discharge quality data – by standard effluent parameters: This refers to the quality of your discharged water/effluents tracked according to parameters such as Chemical Oxygen Demand (COD), Biological Oxygen Demand (BOD) or Total Suspended Solids (TSS). The specific choice of quality metrics will vary depending on the organization’s products, services, and operations but should be consistent with those used in the organization’s sector, and may need to vary depending on national or regional regulations.
• Water discharge quality – emissions to water (nitrates, phosphates, pesticides, and/or other priority substances): This refers to the mass of any solid, liquid or gaseous pollutants or contaminants, such as nitrates and pesticides, released to bodies of water by your organization.
• Water discharge quality data – temperature: This refers to the temperature of your discharged water/effluents. Though not yet a standard effluent parameter in many industries, thermal pollution can play a significant role in ecosystem degradation by altering levels of dissolved oxygen and harming wildlife.
• Water diversions (Metals & mining and coal sectors only): According to the Water Accounting Framework from the Mineral Council of Australia water diversions are flows from an input to an output without being utilized by the operational facility. The flow is not stored with the intention of being used in a task or treated.
• Water withdrawals – total volumes: The sum of all water drawn into the boundaries of the organization (or facility) from all sources for any use over the course of the reporting period. (Source: adapted from GRI Standards Glossary 2016).
• Water withdrawals quality: This refers to the quality of raw water that your company draws into its boundary (from sources, such as rivers, lakes, groundwater and coastal zones).
• Water withdrawals – volumes by source: This refers to the proportion of withdrawals that your organization can trace to different types of water withdrawal source e.g. freshwater, brackish surface water/ seawater, produced water and third party sources, and a breakdown of groundwater by renewable and non-renewable sources.
• Water recycled/reused: Water and wastewater (treated or untreated) used more than once before being discharged from the organization’s boundary, so that water demand is reduced. This may be in the same process (recycled), or in a different process within the same facility or another of the organization’s facilities (reused).
• Water recycled/reused (Oil & gas sector only): Water and wastewater (treated or untreated) that has been used more than once, in order to reduce water withdrawals (adapted from IPIECA’s "Oil & gas industry guidance on voluntary sustainability reporting", 4th edition, 2020).

Example response

Additional information

The provision of safely managed WASH services at the workplace, and respecting the human rights to water and sanitation
The provision of safely managed WASH services at the workplace (and extending such expectations to other actors within its value chain) is aligned with the aims of the Sustainable Development Goals (SDG 6.1 and 6.2) and the UN Human Rights Council endorsed Guiding Principles on Business and Human Rights. These are established and authoritative global reference points on how companies should respect human rights in their own activities and business relationships, focusing on the risks to people rather than the risks to the business. Provision requirements may also be linked to Health and Safety regulations applicable to your operations.

In practice, companies need to implement due diligence to identify actual and potential impacts on human rights and to prevent, mitigate, and remediate them. This could mean a company may need to collaborate with others in the basin to reduce their collective water use when withdrawals limit the water availability for local communities in a way that impacts their right to water.

• The Guide to Business and Human Rights (2014) published by the UK Equality and Human Rights Commission states that a business can respect the right to a safe environment for employees by ‘ensuring access to clean toilet facilities and drinking water’ amongst other criteria.
• The WASH Pledge provides resources for companies looking to implement WASH in the workplace, including a reference for what represents best practice in providing WASH services in different workplaces.
• Guidance for companies on Integrating gender equality into water, sanitation and hygiene projects is available from WaterAid.

Water withdrawals quality and GEMS
The UN Environment Global Environment Monitoring System for Freshwater (GEMS/Water) provides the world community with sound data on water quality to support scientific assessments and decision-making on the subject. Surface and groundwater quality monitoring data collected from the global GEMS/Water monitoring network is shared through the GEMStat information system.
Within UN Environment, GEMS/Water was identified as being the mechanism to support countries/areas to fulfill their reporting obligations for the UN Sustainable Development Goals. GEMS/Water provides appropriate support, based on capacity needs at national and regional levels, and develops training for delivery in countries/areas all over the world.

(W-EU1.2a)

This question only applies to organizations with activities in the electric utilities sector - it will not be displayed here unless you opted to view these sector-specific questions.

(W1.2b) What are the total volumes of water withdrawn, discharged, and consumed across all your operations, how do they compare to the previous reporting year, and how are they forecasted to change?

Change from last year

Modified question; Revised question dependency

Rationale

This question incentivizes companies to have a complete view of their water balance at the corporate level and to assess anticipated forward trends in water demand, encouraging a transition towards business models which do not pose threats to rivers, lakes, aquifers, and streams.

Total volumes can indicate the organization’s relative significance as a user of water and provide a baseline figure for other calculations. Along with trend data, these volumes can also suggest the level of risk posed by future disruptions to water supplies or increases in the cost of water.

Water consumption measures water that is no longer available for use by the ecosystem or local community in the reporting period. Reporting the volume of water consumption contributes to an organization’s understanding of the overall scale of its impact due to water withdrawal on downstream water availability.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

S&P Global Corporate Sustainability Assessment

Water Consumption

Water Use

CEO Water Mandate

Current state: Performance

Response options

Please complete the following table:

Requested content

• Note: Organizations responding to an electric utilities, metals & mining, coal, or oil & gas sector request should refer to additional sector-specific guidance on this question at the end of the "Requested content" section.

General

• This question is asking you to report aggregated company-wide volumetric data. If you do not have the aggregated data, if you are estimating or extrapolating to provide complete coverage, give an explanation in column 6 (Please explain).
• Note that a zero should only be used for reporting zero volumes and not for an absence of data.
• Please refer to CDP’s water accounting definitions before completing this question. Report volumetric data in megaliters per year for the reporting year (the time period you stated in response to W0.2). (1 megaliter = 1 million liters or 1,000 m³).
• Cooling water: Cooling water (freshwater or sea water) is often withdrawn in large quantities and discharged back to its original source with negligible losses or variation in quality. However, this should be included in your water accounts.
• Rainwater: If a company is managing rainwater (for example, by harvesting for use or storage, or to prevent flooding), or is dependent on it for production of goods or the delivery of services, it should try to estimate and disclose it as a withdrawal from the hydrological system into the company boundary. Note that in some jurisdictions rainwater is considered a withdrawal source and organizations are required to report its collection and use.

- Companies may choose to exclude collected rainwater and domestic sewage from their water withdrawal/discharge volumes only if the resulting error in their water balance would be less than 5%. (This avoids your discharge volumes being larger than your withdrawals).
- Including rainwater helps companies better understand their water dependency and risks. For some companies, precipitation/rainwater volumes may constitute a principal input of water at site level. This includes run-off where it has to be managed. In these cases, excluding rainwater from water accounting – withdrawal and discharge - would not be a true reflection of site water balance. In addition, there may be reduced impacts from using rainwater in place of other local freshwater sources.

Volumes (column 1)

• Report volumetric data in megaliters per year for the reporting year (the time period you stated in response to W0.2). (1 megaliter = 1 million liters or 1,000 m³).
• For withdrawals, data may be collected from several sources, including water meters, water bills, calculations derived from other available water data or the organization’s own estimates (if neither water meters nor bills or reference data exist).
• Before deciding whether your withdrawals, discharges or consumption can be reported as zero (0), please refer to CDP’s Technical Note on Water Accounting Definitions.
• If reporting “zero consumption”, remember to check your discharge volumes. Scorers will check that discharge and withdrawals volumes balance (approximately).

Comparison with previous reporting year / Five-year forecast (columns 2, 4)

• CDP does not define the threshold for considering a value as ‘much higher’ rather than simply ‘higher’ (or ‘much lower’/’lower’). CDP requests this information from many different industries with huge variations in water use, and it would therefore be difficult to provide a universal threshold that is meaningful (as proportions will equate to different absolute values and impacts).
• CDP recommends that you define your own threshold for what is ‘much higher’ (and ‘much lower’) and apply it consistently so that the reported data for this question is comparable and data users can track your water accounts more effectively each year. A company-specific explanation for these thresholds should be provided in column 6 (Please explain).
• The threshold defined for ‘much higher’/’higher’ (and ‘much lower’/’lower’) should be the same for column 2 and column 4.
• Comparison with previous reporting year: If the data was not previously reported, but was collected, you may choose to indicate a comparison with the previous year or select "This is our first year of measurement". In either case, use the “Please explain” column to provide details about the information reported.

Primary reason for comparison with previous reporting year / Primary reason for forecast (columns 3, 5)

• Select the most significant reason.
• 'Maximum potential volume reduction already achieved' refers to situations where water saving limits have been reached – for example where a closed-loop water recycling system has been put in place and further water reductions are not feasible.

Please explain (column 6)

• Include any contextual information necessary to understand your primary reason for the comparison with previous reporting year and the five-year forecast, and how the volumetric data have been compiled, such as any standards, methodologies, and assumptions used.
• If you have left column 1 blank because you do not have the data, describe the barriers to reporting that data and any plans to collect and report it.
• Describe the thresholds for what is ‘much higher’ and ‘much lower’ for the change in volumes from the previous reporting year and the five-year forecast.
• If there is any level of uncertainty in your ‘Total’ figures in column 1, or if there is an estimated figure, you should explain it in this field and give the range of uncertainty. Uncertainty can arise from data gaps, assumptions, metering/measurement constraints including equipment accuracy, data management, etc.
• Note: CDP expects withdrawals, discharges and consumption figures to balance (approximately; +/- 5%) so if there is a good reason why this cannot happen, it should be explained in here.

Please explain – additional guidance for consumption volume (row 3)

• For the “water consumption” row, you should indicate if your figure is based on an aggregation of local measurements, an aggregation of local calculations, or is a company-wide calculation (for example using withdrawals minus discharges).
• If known, please provide a breakdown of this figure (with reference to CDP’s definition of consumption) and a brief explanation. Breakdowns include:

- Volume incorporated into products, crops or waste;
- Volume evaporated or transpired;
- Volume consumed by humans or livestock;
- Net volume stored in a controlled manner;
- Net volume stored for future use;
- Volumes otherwise excluded from discharges out of the organization’s boundary.

• It is important that you explain a negative consumption figure where this is the case. This would indicate that your discharges are larger than your withdrawals for the reporting year - due to a net release of water from storage, for example.

Explanation of terms

• Water balance: An account of the volumes of water flowing into and leaving an organization across its boundary. When the two volumes are equal, the net water balance will be zero.
• Water consumption: The amount of water that is drawn into the company boundary and not discharged back to the water environment or a third party. It is important to distinguish the term ‘consumption’ from the term ‘water withdrawal’ or ‘water use’. Water consumed is water that during the reporting year:

- has been incorporated into products, crops or waste;
- has evaporated or transpired;
- consumed by humans or livestock;
- has been stored in a controlled manner because it is polluted to the point of being unusable by other users, and so that it does not leave the organization’s boundary;
- has been stored during the reporting year for use or discharge in a subsequent reporting period;
- is otherwise excluded from discharges out of the organization’s boundary so that it is no longer available for use by the ecosystem or local community.

Consumption may be measured directly or modelled, or it can be calculated by subtracting the total water discharge from company boundary from total water withdrawn into the company boundary during the reporting period. As CDP data users require comparability, all disclosing companies should use this method.

If the company discharges more water than it withdraws, for example, because it has used and then discharged previously stored water, a negative consumption value is possible. This would indicate a net contribution to the water environment in the reporting year.

• Water discharges – total volumes: The sum of effluents and other water leaving the organization’s boundary and released to surface water, groundwater water or to third parties over the course of the reporting year. This includes all water leaving the company boundary, whether it is:

- considered used or unused;
- released through a defined discharge point (point source discharge), or;
- released over land in a dispersed or undefined manner (non-point source discharge), or as;
- wastewater removed from the organization via truck.

Water discharge can be authorized (in accordance with discharge consent) or unauthorized (if discharge consent is exceeded).

• Water diversions (Metals & mining and coal sectors only): According to the Water Accounting Framework from the Mineral Council of Australia water diversions are flows from an input to an output without being utilized by the operational facility. The flow is not stored with the intention of being used in a task or treated.

Example response

(W-OG1.2c)

This question only applies to organizations with activities in the oil & gas sector - it will not be displayed here unless you opted to view these sector-specific questions.

(W1.2d) Indicate whether water is withdrawn from areas with water stress, provide the proportion, how it compares with the previous reporting year, and how it is forecasted to change.

Change from last year

Modified question; Revised question dependency

Rationale

Since water is a shared resource, and water-related impacts are localized, organizations are increasingly being encouraged to prioritize action in areas with water stress and to understand and respond to local contexts.

This question on water from stressed areas supports a trend towards metrics for corporate water reporting and target setting informed by local context, and in addition, the TCFD recommends disclosure of reliance on water from areas of water stress. This question also incentivizes companies to assess anticipated forward trends in withdrawals from water stressed areas, encouraging a transition towards business models which do not pose threats to rivers, lakes, aquifers, and streams.

The data requested assists the assessment of your organization’s dependence on potentially contested sources (regardless of whether your facility itself is located in a stressed area), as well as your potential impact on sensitive locations.

Water stress is a driver of business risk and, as it is likely to worsen, transparency is critical. Gaining an insight into the potential for an increased exposure to elevated business risk due to operations in water stressed areas is very important for the investor community, and this question allows data users to review the trend in dependency on water from stressed basins.

Knowledge of water-related hot spots helps your company identify where water stress may be affecting its operations, now or in the future, as well as to prioritize your sustainable water management practices.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

S&P Global Corporate Sustainability Assessment

Exposure to Water Stressed Areas

GRI

Standard 303-3: Water withdrawal

CEO Water Mandate

Current state: Performance

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• This disclosure does not request volumetric data – only a figure for the proportion of withdrawals from stressed areas. Please refer to CDP’s water accounting definitions and the Explanation of terms for this question before completing the table.
• Organizations should report which approach/tool they use to assess whether their withdrawals are from a ‘stressed area’. They should explain the approach taken and which data sets were used to assess ‘water stress’.
• As good practice, a water-stressed area must be measured, at a minimum catchment level.
• Credible, publicly available tools for assessing levels of water stress include WRI Aqueduct Water Risk Atlas and WWF Water Risk Filter (see Additional information for more details about these tools).
• Commonly accepted global risk indicators to assess areas as water stressed in terms of quantity and their thresholds for reporting to CDP include:

- Baseline water stress - equal to/greater than 'High': 40-80% (WRI Aqueduct).
- Baseline water depletion - equal to/greater than 'High': 50-75% (WRI Aqueduct).
- Water scarcity - equal to/greater than risk score 3 in the WWF Water Risk Filter, which is based on a multi-model approach including global risk indicators: Water depletion, Baseline water stress, Blue water scarcity, and Available Water Remaining (AWARE).

• Note: these global risk indicators account for water stress in terms of the quantity of water resource available. There are currently no commonly used tools/indicators which also take account of accessibility and water quality and which would reflect the CEO Water Mandate’s more inclusive definition of water stress. This definition is adopted by CDP – see the Explanation of Terms for this question and the Glossary. The tools and indicators recommended will be reviewed over time.
• Organizations can complement the results of these tools with their own assessments or by using other methodologies. Some companies will use more granular level data and local knowledge of the basins in which they operate to assess which withdrawals are from stressed areas. For example, a company may consider its facility to be in a water-stressed sub basin or other smaller geographic level, though a global data set suggests that the particular catchment is not stressed.
• Many national and regional water authorities will also have suitable maps, databases and environmental assessments available. (These may be included in the FAO/AquaStat database, or in reports of progress against SDG 6.4.2.)
• Note that this question asks about the location of withdrawal sources rather than your facilities. In most cases, these will not be different at a catchment level. If you are supplying data based on the location of facilities, because you do not know the exact location of all your withdrawal sources, indicate this in column 8.

Withdrawals are from areas with water stress (column 1)

• If you select 'No', columns 2 to 6 will not be presented.
• If you select 'Unknown', columns 2 to 7 will not be presented.

% withdrawn from areas with water stress (column 2)

• Your disclosure should include all withdrawals within stressed areas and all sources listed in W1.2h, including third party suppliers. The proportion is calculated as:

• ‘Total volume of company-wide withdrawals’ is the sum of all water drawn into the company boundary from all the relevant sources as disclosed in W1.2b.
• Note that this question asks about the proportion of water withdrawn from all sources within stressed areas. This includes each of the sources listed in question W1.2h.
• You may provide an estimate and explain why in column 8.

Comparison with previous reporting year / Five-year forecast (columns 3, 5)

• CDP does not define the threshold for considering a value as ‘much higher’ rather than simply ‘higher’ (or ‘much lower’/’lower’). CDP requests this information from many different industries with huge variations in water use, and it would therefore be difficult to provide a universal threshold that is meaningful (as proportions will equate to different absolute values and impacts). CDP recommends that you define your own threshold for what is ‘much higher’ (and ‘much lower’) and apply it consistently so that each year the reported data for this question is comparable and data users can track your water accounts more effectively. A company-specific explanation for these thresholds should be provided in column 8 ('Please explain').
• The threshold defined for ‘much higher’/’higher’ (and ‘much lower’/’lower’) should be the same for column 3 and column 5.
• Comparison with previous reporting year: If the data was not previously reported, but was collected, you may choose to indicate a comparison with the previous year or select “This is our first year of measurement”. In either case, use the “Please explain” column to provide details about the information reported.
• In some cases, the 'Comparison with previous reporting year' for the % withdrawn from areas with water stress may be different to the net change in volume withdrawn from water stressed areas compared to the previous reporting year. In these cases, the company should state the volumetric comparison between the current and previous reporting year in the 'Please explain' (column 8). This would be applicable, for example, when a company has 'much higher' total company-wide withdrawals compared to the previous reporting year, but their absolute withdrawals from areas with water stress are about the same or higher. In this example, the response to column 'Comparison with previous reporting year' would be 'lower' although their absolute withdrawals from areas with water stress have not been reduced.

Primary reason for comparison with previous reporting year / Primary reason for forecast (columns 4, 6)

• Select the most significant reason.
• 'Maximum potential volume reduction already achieved' refers to situations where water saving limits have been reached – for example where a closed-loop water recycling system has been put in place and further water reductions are not feasible.

Identification tool (column 7)

• Select the tool(s) your organization uses to identify whether its withdrawals are located in geographic areas of water stress.
• If you have used a different tool, methodology or data set, select ‘Other, please specify’ and provide a label for the tool/approach in the text field provided and give details in column 8.

Please explain (column 8)

• Use this field also to give more details about:

- The proportion you reported in column 2; and
- Any exclusions in your reporting.
- Scope of assessments (full coverage or partial based on geographies, business unites, tiers of the supply chain, etc.)

• If your responses to column 2, 3 or 5 are partially or wholly estimated, please explain your approach to estimation.
• If you have selected a recommended tool in column 7, briefly describe how the selected tool was applied to evaluate whether water is withdrawn from stressed areas, including:

- Which data sets are used; and
- Frequency of assessments.

• If you have not used one of the tools recommended, briefly describe:

- The tool used;
- How “areas with water stress” are defined and identified, including the threshold applied; and
- If possible, the methodology used such as the data sets that your assessment is based on (see Additional information).

• This question asks about the location of withdrawal sources rather than your facilities.
• Indicate if you are only able to supply data based on the location of facilities and give your reason.
• If desired, you may give an explanation of your company’s management response to the exposure to business risks associated with the percentage disclosed in column 2, and your experience of working in water stressed areas. This is optional but may provide data users with context to better interpret the significance of the figures reported.
• If you selected ‘Unknown’ in column 1, explain why you have not assessed if any of your water withdrawals are from stressed areas, and if relevant, any plans for future assessment.

Explanation of terms

• Water stress: The ability, or lack thereof, to meet human and ecological demand for fresh water. Compared to scarcity, “water stress” is a more inclusive and broader concept. It considers several physical aspects related to water resources, including water availability, water quality, and the accessibility of water. It can also be based on subjective elements so that it is assessed differently depending on societal values, such as the suitability of water for drinking, the requirements to be afforded to ecosystems, and whether people can make use of the physically available water supplies. This is often a function of the infrastructure and the affordability of water, among other things. Consider for instance, a region may have abundant water resources (and thus not be considered water scarce), but it may have such severe pollution that those supplies are unfit for human or ecological uses. Consider also that a sector able to use any quality of water may enjoy more availability than another sector in the same catchment that depends on high quality water (based on the CEO Water Mandate’s definition of water stress, Corporate Water Disclosure Guidelines, 2014).
• Area with water stress: There is no universally accepted methodology for classifying an area as water stressed, nor for identifying whether facilities are located in a water stressed area. As good practice, a water stressed area should be at the catchment level as a minimum. CDP’s reporting guidance for W1.2d suggests some publicly available and credible tools for identifying water stressed areas based simply on physical scarcity.
• Water scarcity: Refers to the volumetric lack of freshwater resources. It is a human-driven concept; it is a function of the volume of human water consumption relative to the volume of water resources in a given area. As such, an arid region with very little water, but no human water consumption would not be considered “scarce,” but rather “arid.”
  Water scarcity (unlike water stress) is a physical, objective reality that can be measured consistently across regions and over time. Water scarcity reflects the physical abundance of fresh water rather than whether that water is actually suitable for use. For instance, a region may have abundant water resources but have such severe pollution that those supplies are unfit for human or ecological uses. This region would not be considered water scarce, but would be considered water stressed (based on the CEO Water Mandate’s Corporate Water Disclosure Guidelines, 2014).
• Baseline water stress: The ratio of total annual water withdrawals to total available annual renewable supply.

- This measure is used in the World Resource's Institute Aqueduct tool and the WWF Water Risk Filter tool.
- 'High' baseline water stress is when withdrawals are in the range of 40-80% of total annual available blue water. Extremely high baseline water stress is when withdrawals are >80% of availability of blue water.

• Water depletion: The ratio of total water consumption to available renewable water supplies.

- In the WWF Water Risk Filter (indicator 1.1) water depletion risk indicator is classified into five risk levels where a 75% threshold is exceeded on a dry-year basis (Medium risk), seasonal basis (High risk), or annual average basis (Very High risk).
- In the WRI Aqueduct Tool, "Baseline water depletion" is a single scale not encompassing temporal fluctuations.

• Blue water scarcity: The ratio of the blue water footprint to the total blue water availability, considering intra-annual variability. In the WWF Water Risk Filter (indicator 1.3) blue water scarcity risk indicator is classified into 5 risk levels, including where available blue water has been fully consumed (Medium risk), or environmental flow requirements are not met (High to Very High risk).
• Available water remaining (AWARE): Available water remaining in a given basin relative to the world average, after human and aquatic ecosystem demands have been met. In the WWF Water Risk Filter (indicator 1.4) AWARE risk indicator is classified into five risk levels, including where water remaining is within the 3rd quintile (Medium risk), 4th quintile (High risk), or 5th quintile (Very High risk).

Additional information

More about water stress

There is no universally accepted methodology, criteria, or thresholds for classifying an area as water stressed. CDP’s preferred approach to defining water stress is that of the CEO water mandate which goes beyond physical abundance to include whether the water is actually suitable and/or accessible for use (see CEO Water Mandate’s definition of water stress, Corporate Water Disclosure Guidelines, 2014). However, the commonly used tools for assessing geographic areas are limited to physical criteria and datasets.

The two tools listed in the response table for W1.2d allow companies to determine the stress status of the basins where their operations are located in terms of quantity only i.e. water scarcity. The tools are underpinned by some common and some different risk indicators and datasets (see table below). Other tools may use other data sets. Companies must determine which approach is most meaningful for their activities and the water contexts they operate in.

Note about the SDGs and water stress

The UN Water’s definition underpins reporting for SDG 6.4.2. This equates water stress only with volumetric availability: the ratio between total freshwater withdrawn by all major sectors and total renewable freshwater resources, after having taken into account environmental water requirements. Accordingly:

• An area of low level water stress is one where the combined withdrawal by all sectors is marginal in relation to the resources, and has therefore little potential impact on the sustainability of the resources or on the potential competition between users (UNWater - Integrated Monitoring Guide for SDG 6, 2016).
• An area of high level water stress indicates a situation where the combined withdrawal by all sectors represents a substantial share of the total renewable freshwater resources, with potentially larger impacts on the sustainability of the resources and potential situations of conflicts and competition between users (UNWater - Integrated Monitoring Guide for SDG 6, 2016).

Note about water risk/stress/scarcity

Note that water stress and scarcity are just two types of physical risk drivers for water users. Beyond these, there are a variety of other physical pressures related to water risk, such as flooding, drought and infrastructure decay, as well as legal and reputational risks. (Refer to the CEO Water Mandate’s Detailed Definitions for water scarcity, water stress and water risk).

(W-FB1.2e/W-AC1.2e)  (W-FB1.2f/W-AC1.2f)  (W-FB1.2g/W-AC1.2g)

Questions W-FB1.2e/W-AC1.2e to W-FB1.2g/W-AC1.2g apply only to organizations with activities in the food, beverage and tobacco, as well as agricultural commodities sectors - they will not be displayed here unless you opted to view these sector-specific questions.

(W1.2h) Provide total water withdrawal data by source.

Question dependencies

• This question only appears if you indicate in W1.2 that you monitor the following water aspect(s):
  • Water withdrawals – volume by source

Change from last year

Modified question

Rationale

Distinguishing between source types and reporting volume of water withdrawn by source contributes to an understanding of the potential risks and impacts associated with an organization’s water use as this level of detail can be significant. For example, withdrawing water from an overdrawn aquifer will have different consequences for local water stress and a company’s water security than does withdrawing seawater. Clean freshwater is becoming increasingly scarce, and this can impact production processes that rely on large volumes of water.

In regions where water sources are highly restricted, the organization’s water consumption patterns can also influence relations with other stakeholders.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

S&P Global Corporate Sustainability Assessment

Water Consumption

CEO Water Mandate

Current state: Performance

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

• Note: Organizations responding to an electric utilities, metals & mining, or coal sector request should refer to additional sector-specific guidance on this question at the end of the "Requested content" section.

General

• For the different sources, this question is requesting a figure for aggregated withdrawal volumes from across your organization. Information about your withdrawals by their source allows a better understanding of your company’s dependency on different sources, the trend in that dependency, and your risk exposure from different water sources. If you do not have aggregated company-wide volumetric data, you may provide an estimate and give an explanation in column 5 (Please explain).
• Cooling water: Cooling water (freshwater or sea water) is often withdrawn in large quantities and discharged back to its original source with negligible losses or variation in quality. However, this should be included in your water accounts. For example, a utility company may use large volumes of surface water for cooling purposes, and the water quality may not need to be fresh. Companies should report this information by selecting ‘Non-fresh surface water/seawater’, to demonstrate to investors that they are not dependent on potentially scarce fresh surface water sources and therefore their risk exposure is likely to be less than if they were dependent on freshwater resources.
• Rainwater: If a company is managing rainwater (for example, by harvesting for use or storage, or to prevent flooding) or is dependent on it for production of goods or the delivery of services, it should try to estimate and disclose it as a withdrawal from the hydrological system into the company boundary.

- Companies may choose to exclude collected rainwater and domestic sewage from their water withdrawal/discharge volumes only if this would result in less than 5% error in their water balance.
- Including rainwater helps companies better understand their water dependency and risks. For some companies, precipitation/rainwater volumes may constitute a principal input of water at site level. In these cases, excluding rainwater from water accounting – withdrawal and discharge - would not be a true reflection of site water balance. In addition, there may be reduced impacts from using rainwater in place of other local freshwater sources.

• Oil & gas sector only: Groundwater - As part of groundwater withdrawal volumes (be it from renewable or non-renewable sources), organizations should include all withdrawals from aquifers (other than the formation being exploited). These withdrawals may be intended for any use in the organization, including injection to maintain well pressure or as part of the fracture fluids.

Source (column 0)

• Fresh surface water: For the purposes of this disclosure you should include all surface water sources of a higher quality than brackish (i.e. a TDS lower than 10,000 mg/l).

Relevance (column 1)

• Select:

- 'Relevant' if your company uses, has used or plans to use the source, even if the withdrawal is zero for this reporting year.
- 'Relevant but volume unknown' if your company uses, has used or plans to use the source, but the volume for this year is unknown and can not be estimated. Columns 2, 3 and 4 will then be disabled and you should provide further explanation in column 5 (Please explain).
- 'Not relevant' if your company does not withdraw from the source. Columns 2, 3 and 4 will then be disabled. You may provide further explanation in column 5 (Please explain).

Volume (megaliters/year) (column 2)

• Volumes should be reported in megaliters per year (1 megaliter = 1 million liters or 1000 m³). Your reporting year is the time period you stated in response to question W0.2.
• If you do have volumetric data for the current reporting year you may provide an estimate and explain why this is the case in column 5.
• Note that a zero (0) should only be used for reporting zero volumes and not for an absence of data.
• If reporting zero withdrawals, provide an explanation in column 5. Before deciding whether your withdrawals should be reported as “zero”, please refer to CDP’s definition of water withdrawals.

Comparison with previous reporting year (column 3)

• CDP does not define the threshold for considering a value as ‘much higher’ rather than simply ‘higher’ (or ‘much lower’/’lower’). CDP requests this information from many different industries with huge variations in water use, and it would therefore be difficult to provide a universal threshold that is meaningful (as proportions will equate to different absolute values and impacts).
• CDP recommends that you define your own threshold for what is ‘much higher’ (and ‘much lower’) and apply it consistently so that each year the reported data for this question is comparable and data users can track your water accounts more effectively. A company-specific explanation for these thresholds should be provided in column 5 for each source.
• If the data was not previously reported, but was collected, you may choose to indicate a comparison with the previous year or select "This is our first year of measurement". In either case, use the “Please explain” column to provide details about the information reported.

Primary reason for comparison with previous reporting year (column 4)

• Select the most significant reason for the comparison with previous reporting year.
• 'Maximum potential volume reduction already achieved' refers to situations where water saving limits have been reached – for example where a closed-loop water recycling system has been put in place and further water reductions are not feasible.

Please explain (column 5)

• To assist CDP data users to understand a company’s water use, you should explain your selections for 'Relevance' (column 1), and 'Primary reason for comparison with previous reporting year' (column 4), including any company-specific contextual information.
• Report whether your volumes for each source are estimated, modelled, or sourced from direct measurements. If estimation or modelling has been used, report the estimation or modelling methods.
• Please explain any zero volumes for relevant sources. For example, “we sometimes withdraw water from this source but the volume for the reporting year was zero”.
• Describe the thresholds for what is 'much higher' and 'much lower' for the change in volumes compared to the previous reporting year.
• Indicate the anticipated future trends for these volumes, if known (note that future trends would be at least one year after the end of the reporting year provided in W0.2).
• For 'Fresh surface water' (row 1), it is important that you state which of the sources apply (rainwater, water from wetlands, rivers and lakes). Also state whether those sources are monitored and if you know whether the withdrawal volume for each source is increasing or decreasing. If you are using and managing rainwater and the volume equates to more than 5% of your water balance, please explain if it is harvested, treated etc. and the benefits and impacts of using it.
• For 'Third party' (row 6), if possible specify whether the third party is a municipal supplier or another type of third party organization. This is particularly important if the third party is known to be located in a water stressed area.

Explanation of terms

• Brackish surface water/seawater: Surface water in which the concentration of salts is high and far exceeds normally acceptable standards for municipal, domestic or irrigation use (at least higher than 10,000 mg/l TDS). Seawater has a typical concentration of salts above 35,000 mg/l TDS.
• Fresh surface water, including rainwater, water from wetlands, rivers and lakes: Water that is naturally occurring water on the Earth's surface in ice sheets, ice caps, glaciers, icebergs, bogs, ponds, lakes, rivers and streams, and has a low concentration of dissolved solids.
  For the purposes of reporting water accounting data to CDP, this surface water source includes water of a quality generally acceptable for, or requiring minimal treatment to be acceptable for, domestic, municipal or agricultural uses (at least <10,000 mg/l TDS, though a range of additional quality properties may also be considered). ‘High quality’ fresh water sources considered acceptable for potable use are typically characterized as having concentrations of dissolved solids less than 1,000 mg/l.
• Groundwater (non-renewable): Water which is being held in, and can be recovered from, an underground formation. Non-renewable groundwater has a negligible rate of natural recharge on the human time-scale (more than 50 years), and is generally located at deeper depths than renewable groundwater. This is sometimes referred to as “fossil” water.
• Groundwater (renewable): Water which is being held in, and can be recovered from, an underground formation. Renewable groundwater sources can be replenished within 50 years and are usually located at shallow depths.
• Produced water: Water which enters the organization’s boundary as a result of the extraction, processing, or use of any raw material, so that it must be managed by the organization. When reporting to CDP, this water should not be counted as recycled water when put to use within a single cycle of a business process. Examples of produced water include moisture derived from vegetation such as in sugar cane crushing and the water content in crude oil (note that companies with oil and gas activities should refer to CDP’s sector specific guidance for this water aspect).
• Produced water (Oil & gas sector only): Water that is brought to the surface during the production of hydrocarbons including formation water, flow-back water and condensation water (adapted from IPIECA's “Oil and gas industry guidance on voluntary sustainability reporting", 4th edition, 2020).
• Third party sources: This includes water provided by municipal water suppliers, public or private utilities, and wastewater from any other organization.
• Water withdrawal: The sum of all water drawn into the boundaries of the organization from all sources for any use over the course of the reporting period.

(W1.2i) Provide total water discharge data by destination.

Question dependencies

• This question only appears if you indicate in W1.2 that you monitor the following water aspect(s):
  • Water discharges - volumes by destination

Change from last year

Modified question

Rationale

Reporting volume of water discharged to specific destinations contributes to an understanding of the specific risks and impacts associated with an organization’s water discharges.

Connection to other frameworks

CEO Water Mandate

Current state: Performance

SDG

Goal 6: Clean water and sanitation

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

• Note: Organizations responding to an electric utilities, metals & mining or coal sector request should refer to additional sector-specific guidance on this question at the end of the "Requested content" section.

General

• This question is requesting an aggregated figure for your discharge volumes across your organization. If you do not have aggregated company-wide volumetric data, you should provide and estimate and give an explanation in column 5 (Please explain).
• Zero discharge permit: If your company has a zero discharge permit, please consider any discharges that may exist outside this permit and may still be relevant to CDP’s definition of discharges.
• Rainwater: Rainwater/run-off that enters the site/facility boundary and is captured could also be counted as an output or discharge (even if not used in operations) if returned to the water environment via a dedicated discharge destination; e.g. river or groundwater via soakaway/filtration pond. You may choose to exclude collected rainwater from your discharge accounting, unless this would result in an error in your balance of more than 5%.

- Note that in the mining industry precipitation/rainwater volumes may constitute a principal input of water at site level and excluding rainwater would not be a true reflection of their site water balance. Companies in this sector (and others to which this is relevant) should report rainwater/runoff drawn into the boundaries of their operations and then discharged and explain this in column 5.

• Cooling water: Cooling water (freshwater or sea water) is often withdrawn in large quantities and discharged back to its original source with negligible losses or variation in quality. However, this should be included in your water accounts.
• Domestic sources: Domestic sewage is not regarded as water discharge. However, if wastewater comes from domestic sources but is pre-dominantly generated from sector business activities e.g. healthcare residential properties, this should be reported if it would result in an error in your balance of more than 5%.
• Aquifer reinjection: reinjection to aquifers should be considered as a discharge to groundwater.
• Soakaway: Water returning to a groundwater source via a soakaway should be considered as a discharge.
• Groundwater (oil & gas sector only): In oil production, as part of secondary and tertiary recovery operations, water-based fluids (from various sources) may be used to maintain the pressure, and to displace the hydrocarbons and move them towards the production wells. For CDP disclosure, organizations must report these volumes as discharges to groundwater bodies, to enable comparability and have an accurate water balance.

Relevance (column 1)

• Select:

- 'Relevant' if your company uses, has used or plans to use the source, even if the discharge is zero for this reporting year.
- 'Relevant but volume unknown' if your company uses, has used or plans to use the source, but the volume for this year is unknown. Columns 2, 3 and 4 will then be disabled. You should provide further explanation in column 5 (Please explain).
- 'Not relevant' if your company does not discharge to the destination. Columns 2, 3 and 4 will then be disabled. You should provide further explanation in column 5 (Please explain).

Volume (megaliters/year) (column 2)

• Volumes should be reported in megaliters per year (1 megaliter = 1 million liters or 1000 m³). Your reporting year is the time period you stated in response to question W0.2.
• If you do have volumetric data for the current reporting year you may provide an estimate and explain why this is the case in column 5.
• Note that a zero should only be used for reporting zero volumes and not for an absence of data.
• If reporting zero discharges, provide an explanation in column 5.
• Before deciding whether your discharges should be reported as “zero”, please refer to CDP’s definition of water discharges. This may be the case, for example, if a closed water circuit, or zero liquid effluent discharge complex, is in operation and a facility does not discharge water as all water is reused by the operation(s) during processing/production.

Comparison with previous reporting year (column 3)

• CDP does not define the threshold for considering a value as ‘much higher’ rather than simply ‘higher’ (or ‘much lower’/’lower’). CDP requests this information from many different industries with huge variations in water use, and it would therefore be difficult to provide a universal threshold that is meaningful (as proportions will equate to different absolute values and impacts).
• CDP recommends that you define your own threshold for what is ‘much higher’ (and ‘much lower’) and apply it consistently so that each year the reported data for this question is comparable and data users can track your water accounts more effectively. A company-specific explanation for these thresholds should be provided in column 5 for each destination.
• If the data was not previously reported, but was collected, you may choose to indicate a comparison with the previous year or select "This is our first year of measurement". In either case, use the “Please explain” column to provide details about the information reported.

Primary reason for comparison with previous reporting year (column 4)

• Select the most significant reason for the comparison with previous reporting year.
• 'Maximum potential volume reduction already achieved' refers to situations where water saving limits have been reached – for example where a closed-loop water recycling system has been put in place and further water reductions are not feasible.

Please explain (column 5)

• To assist CDP data users to understand a company’s water use, you should explain your selections for ‘Relevance’ (column 1) and ‘Primary reason for comparison with previous reporting year’ (column 4), including any company-specific contextual information.
• Report whether your volumes for each destination are estimated, modelled, or sourced from direct measurements. If estimation or modelling has been used, report the estimation or modelling methods.
• To give data users confidence in your response, please explain any zero volumes for relevant destination’s; e.g. if a completely closed loop cooling system has been introduced. Remember to report any discharged water that exceeds site storage capacity, e.g. excessive rainfall, as a separate discharge.
• Describe the thresholds for what is 'much higher' and 'much lower' for the change in volumes compared to the previous reporting year.
• Indicate the anticipated future trends for these volumes, if known (note that future trends would be at least one year after the end of the reporting year provided in W0.2).
• For discharges to a Third-party, it is important to state if this includes water to other organizations for further use.

Explanation of terms

• Brackish surface water/seawater: Surface water in which the concentration of salts is high and far exceeds normally acceptable standards for municipal, domestic or irrigation use (at least higher than 10,000 mg/l TDS). Seawater has a typical concentration of salts above 35,000 mg/l TDS.
• Fresh surface water, including wetlands, rivers and lakes: Water that is naturally occurring water on the Earth's surface and has a low concentration of dissolved solids.
• Groundwater: Water which is being held in, and can be recovered from, an underground formation. Discharge to groundwater, by human activity or natural activity, refers to a destination beneath the soil surface, such as a water bearing layer of rock (aquifer). Examples of discharges to groundwater include disposal of sewage, trade effluent and surface water run-off from urban areas, through such methods as spreading basins, soakaways, swales or injection wells.
• Third-party destinations: This includes municipal wastewater plants, public or private utilities, and other organizations involved in the transport, treatment, disposal or further use of wastewater.

- Note that to qualify as a third-party destination, “other organizations” using your wastewater must be outside your reporting boundary given in question W0.5.
- Any of your wastewater that has been treated on your own site should be reported as discharge according to its ultimate destination (for example, to groundwater), as this is where any potential risks for the company lie.

• Water discharge: The sum of effluents and other water leaving the boundaries of the organization and released to surface water, groundwater, or third parties over the course of the reporting period (adapted from GRI Standard 306-1, 2016). This includes all water leaving the company boundary, whether it is:

- considered used or unused;
- released through a defined discharge point (point source discharge);
- released over land in a dispersed or undefined manner (non-point source discharge);
- wastewater removed from the organization via truck.

Companies may choose to exclude collected rainwater and domestic sewage from their water discharge volume unless this would result in an error in their water balance of more than 5%.

Water discharge can be authorized (in accordance with discharge consent) or unauthorized (if discharge consent is exceeded).

(W1.2j) Within your direct operations, indicate the highest level(s) to which you treat your discharge.

Question dependencies

• This question only appears if you indicate in W1.2 that you monitor the following water aspect(s):
  • Water discharges - volumes by treatment method

Change from last year

Modified question

Rationale

Reporting on levels of treatment demonstrates that the organization is monitoring its discharges and is able to understand the extent to which its activities impact water quality.

Pollution is a driver of business risk and a potential threat to public health, food security, and economic resilience – as well as a cause of degradation of freshwater biodiversity. Treatment of discharge is therefore critical and transparency on this will aide investors, customers, and other data users to assess the risks and opportunities.

Connection to other frameworks

CEO Water Mandate

Current state: Performance

GRI

Standard 303-4: Water discharge (clause 2.4.2)

SDG

Goal 6: Clean water and sanitation

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• This question requests a figure for your discharge volumes by treatment level aggregated across your direct operations. If you do not have company-wide volumetric data, you may provide an estimate and state this in column 6 (Please explain). You should account for 100% of the total discharge volume disclosed in W1.2b.

Highest level of treatment within direct operations (column 0)

• This refers to the level of treatment applied by your organization to water at the point of discharge. If water has been treated to multiple levels, report the volume in the row for the highest level of treatment only. For example, if the total discharge reported in W1.2b is 10,000 megaliters, and 9,000 megaliters of this are treated to primary, secondary, and tertiary levels, but the remaining 1,000 megaliters are only treated to primary level, then:

- 9,000 megaliters should be reported in the “Tertiary” row,
- 0 megaliters should be reported in the "Secondary treatment" row, and,
- 1,000 megaliters should be reported in the “Primary treatment only” row.

• Discharge to the natural environment without treatment: This row is for the volume of water you discharge from your company boundary without treatment and to a destination other than a third party.
• Discharge to a third party without treatment: This row is for the volume of water you discharge from your company boundary to a third party which may then treat it.
• Other treatment: If you treat water using specific treatment techniques, disclose this volume in this row and provide details in column 6 (Please explain) i.e. a description of each technique used and the volumes treated, for example, nature-based solutions such as a constructed wetland, managed by the organization and designed to treat discharge.

Relevance of treatment level to discharge (column 1)

• Select:

- 'Relevant' if this level of treatment is relevant to your business activities and the nature of your discharge (even if the volume is reported as zero for this reporting year because this is not the highest level of treatment).
- 'Relevant but volume unknown' if your company uses, has used, or plans to treat discharge to this level, but the volume for this year is unknown and cannot be estimated. Columns 2, 3, 4 and 5 will not be presented and you should provide further explanation in column 6 (Please explain).
- 'Not relevant' ONLY if this level of treatment is not relevant to your business activities and the nature of your discharge. Columns 2, 3, 4 and 5 will not be presented. Your selection here should not be impacted by your use, or relevance, of other levels of treatment. You should provide further explanation in column 6 for your selection in column 1.

Volume (megaliters/year) (column 2)

• Volumes should be reported in megaliters per year (1 megaliter = 1 million liters or 1000 m³). Your reporting year is the time period you stated in response to question W0.2.
• If you do not have volumetric data for the current reporting year you may provide an estimate and explain why this is the case in column 6 (Please explain).
• Note that a zero should only be used for reporting zero volumes and not for absence of data.
• If reporting zero discharges for a level of treatment, provide an explanation in column 6. Before deciding whether your discharges should be reported as “zero”, please refer to CDP’s definition of water discharges.

Comparison of treated volume with previous reporting year (column 3)

• CDP does not define the threshold for considering a value as ‘much higher’ rather than simply ‘higher’ (or ‘much lower’/’lower’). CDP requests information from many different industries with huge variations in water use, and it would therefore be difficult to provide a universal threshold that is meaningful (as proportions will equate to different absolute values and impacts).
• CDP recommends that you define your own threshold for what is ‘much higher’ (and ‘much lower’) and apply it consistently so that the reported data for this question is comparable and data users can track your water accounts more effectively each year. A company-specific explanation for these thresholds should be provided in column 6 (Please explain).
• If the data was not previously reported, but was collected, you may choose to indicate a comparison with the previous year or select "This is our first year of measurement". In either case, use the “Please explain” column to provide details about the information reported.

Primary reason for comparison with previous reporting year (column 4)

• Select the most significant reason for the comparison with previous reporting year.
• 'Maximum potential volume reduction already achieved' refers to situations where water saving limits have been reached – for example where a closed-loop water recycling system has been put in place and further water reductions are not feasible.

% of your sites/facilities/operations this volume applies to (column 5)

• Select the proportion of your organization’s facilities for which the volume reported in column 2 (Volume) accounts for, or indicate if this is unknown. For example, a company that has 100 facilities across its total operations and treats the volume of water provided in column 2 at 45% of its facilities (45 facilities) would select “41-50” in column 5 for that row.

Please explain (column 6)

• Provide a rationale for the level of treatment applied to your discharge. Refer briefly to specific business activities and associated hazardous waste types, and any regulatory or voluntary standards that apply.
• Indicate the anticipated future trends for these volumes, if known (note that the future trends would be at least one year after the end of the reporting year provided in W0.2).
• Describe the thresholds for what is ‘much higher’ and ‘much lower’ for the change in volumes compared to the previous reporting year.
• To assist CDP data users to understand a company’s water use, you should explain your selections for ‘Relevance’ (column 1) and ‘Primary reason for comparison with previous reporting year’ (column 4), including any company-specific contextual information.
• If you indicated that volumes are discharged to third party destinations, state the highest level of treatment the third party applies, or state unknown if that is the case.
• If you indicated that a level of treatment is “Not relevant” or “Relevant but volume unknown” provide the reason here.

Explanation of terms

• Primary treatment: Primary treatment involves the physical removal of suspended solids and floating material, typically by sedimentation. A preliminary treatment may often be applied involving the physical removal of large debris, large particles, oils, and grease, typically through screens and grit chambers.
• Secondary treatment: Secondary treatment involves the degradation of organic matter and reduction of solids through biological treatment. The removal of nutrients (nitrogen and/or phosphorus) can also be achieved at this level of treatment using a combination of chemical and biological treatments. Secondary treatment follows primary treatment.
• Tertiary treatment: Tertiary treatment involves the additional treatment needed to remove suspended, colloidal and dissolved constituents (nutrients, heavy metals, inorganic and other contaminants) remaining after secondary treatment through a number of processes including granular media filtration, biological nitrification-denitrification, biological phosphorus removal, chlorination, etc. Tertiary treatment follows secondary treatment.

Example Response

Note that the responses for each row reflect examples from different companies to demonstrate the relevance of different treatment levels to several business types.

(W1.2k) Provide details of your organization’s emissions of nitrates, phosphates, pesticides, and other priority substances to water in the reporting year.

Question dependencies

• This question only appears if you indicate in W1.2 that you monitor the following water aspect:
  • Water discharge quality – emissions to water (nitrates, phosphates, pesticides, and/or other priority substances)

Change from last year

New question

Rationale

This question allows organizations to indicate their emissions to water of priority substances, helping them understand, manage, and reduce the use of nitrates, phosphates, pesticides, and other priority substances.

Ambition: Companies monitor and reduce their emissions to water to protect water bodies against pollution from nutrients, phosphates, pesticides, and other priority substances.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• Only emissions to water from a company's direct operations need to be reported.

Emissions to water in the reporting year (metric tonnes) (column 1)

• Enter a figure for total emissions to water in the reporting year.
• Emissions to water should be reported in metric tonnes (1 metric tonne = 1,000 kilograms). Your reporting year is the time period you stated in response to W0.2.
• Entering a zero implies that measurements have been taken, and the value is zero. Do not enter a zero if no data is available.

Category(ies) of substances included (column 2)

• Select all the substances that are included in your calculation of the figure in column 1.
• For ‘Priority substances listed under the EU Water Framework Directive’, refer to this list. See ‘Explanation of terms’ for more information.
• If your emissions to water include pesticides which are also part of the EU Water Framework Directive's list of Priority Substances, select both 'Pesticides' and 'Priority substances listed under the EU Water Framework Directive'.

List the specific substances included (column 3)

• This column is only presented if ‘Priority substances listed under the EU Water Framework Directive’ is selected in column 2.
• List any substances from the 'Priority substances listed under the EU Water Framework Directive’ included in your calculation. See ‘Explanation of terms’ for more information.

Please explain (column 4)

• Briefly explain which parts of your business are emitting these pollutants and why.
• Indicate whether the emissions to water are nearby to any vulnerable communities or within water stressed areas and if there is a plan to reduce or manage these pollutants (details on pollutant management plans can be provided in W3.1a).
• You may use this field to provide any other contextual information, for example, the geographical areas implicated.

Explanation of terms

• Emissions to water: This metric tracks the mass of any solid, liquid or gaseous pollutants or contaminants, such as nitrates and pesticides, released to bodies of water by your organization in the reporting year.
• List of priority substances under the EU Water Framework Directive: means the list of priority substances in the field of water policy in Annex X of the Directive 2013/39/EU of the European Parliament and of the Council of August 2013. The review of the priority substances list has been supported by an extensive consultation with experts from the Commission services, Member States, stakeholders and the Scientific Committee on Health and Environmental Risks. Other relevant Community legislation or relevant international agreements were also considered.

Water intensity

(W1.3) Provide a figure for your organization's total water withdrawal efficiency.

Change from last year

No change

Rationale

A water withdrawal efficiency metric enables companies to track the water-dependency of their revenue, as well as bench mark their water use. Awareness of water efficiency can drive cost savings, increased brand value, and product or service innovation.

This metric helps data users track a company’s transition towards a water secure future.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

Response options

Please complete the following table:

Requested content

General

• This metric is informed by SDG Indicator 6.4.1 – Water use efficiency.

Revenue (column 1)

• This figure should be in the same currency that you selected for all financial information disclosed throughout your response in question W0.4.
• Enter a numerical value for the revenue generated by your organization during the reporting period disclosed in W0.2.
• This figure is "Revenue" as would be declared in your financial statement (sometimes referred to as "turnover" or "sales"). Under the International Financial Reporting Standard this would be the inflow of income arising in the course of an entity's ordinary activities, with deductions made (such as for sales returns, allowances, and discounts). This figure is commonly used by investors to assess the income-generating ability of a business.

Total water withdrawal volume (megaliters) (column 2)

• This figure should be the same volume reported in W1.2b row 1 (Total withdrawals), column 2 (Volume). (1 megaliter = 1,000 m3 or 1 million liters)

Total water withdrawal efficiency (column 3)

• This is an auto-calculated value of the ratio between column 1 (Revenue) and column 2 (Total water withdrawal volume).

Anticipated forward trend (column 4)

• Indicate the anticipated future trend of this figure, if known (note that future trends should be at least one year after the end of the reporting year provided in W0.2).

Explanation of terms

• Revenue: Income arising in the course of an entity's ordinary activities (less discounts, allowances and returns) - before deducting costs for the goods/services sold and operating expenses to arrive at profit (based on the International Financial Reporting Standard).
• Water withdrawal: The sum of all water drawn into the boundaries of the organization from all sources for any use over the course of the reporting period.
• Water withdrawal efficiency: A measure of economic value produced from water withdrawals. For CDP disclosure, this is calculated as revenue per total water withdrawal volume in the reporting period (informed by SDG indicator 6.4.1).

Additional information

'Revenue’ in this calculation for water withdrawal efficiency refers to income arising in the course of an entity's ordinary activities (less discounts, allowances and returns) - before deducting costs for the goods/services sold and operating expenses to arrive at profit. This marks a departure from SDG 6.4.1 and the United Nations Conference on Trade and Development’s guidance for corporate reporting against the SDG efficiency indicator, which asks for Net Value Added – or revenue after deducting costs. This difference is to align with the definition of revenue across CDP’s questionnaires, based on the International Financial Reporting Standard.

Hazardous substances

(W1.4) Do any of your products contain substances classified as hazardous by a regulatory authority?

Question dependencies

Your response to W1.4 prompts subsequent questions. If your response to W1.4 is amended, data in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions.

Change from last year

New question

Rationale

Tracing and eliminating the use of hazardous substances in all sectors is pivotal in safeguarding the quality of water bodies and by extension the effects on humans and ecosystems. Keeping track of the hazardous substances present in their products allows companies to work systematically to phase out these substances.

Ambition: Companies track their use of hazardous substances and transition away from sourcing/using hazardous substances in their products.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

Goal 12: Responsible consumption and production

S&P Global Corporate Sustainability Assessment

Exposure to Hazardous Substances

Response options

Please complete the following table:

Requested content

General

• If you select ‘Yes’, you will be presented with a question on details about hazardous substances in your products.

Comment (column 2) (optional)

• You may use this column to provide information that will help CDP data users to understand your selection. For example, you may wish to explain:
  • If you selected ‘No’, how you know that your products do not contain hazardous substances.
  • If you selected ‘Unknown’, any future plans to assess this.

Explanation of terms

• Hazardous substances: Compounds exhibiting intrinsically negative properties such as being persistent, bioaccumulative and toxic (PBT), very persistent and very bioaccumulative (vPvB), carcinogenic, mutagenic and toxic for reproduction (CMR), or endocrine disruptors (ED) (ZDHC, 2022).

(W1.4a) What percentage of your company’s revenue is associated with products containing substances classified as hazardous by a regulatory authority?

Question dependencies

• This question only appears if “Yes” is selected in W1.4.

Change from last year

New question

Rationale

This question assesses whether your company monitors hazardous substances in your products, with the aim to improve the protection of human health and the environment from the risks posed by hazardous substances.

Ambition: Companies track their use of hazardous substances and transition away from sourcing/using hazardous substances in their products.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

Goal 12: Responsible consumption and production

S&P Global Corporate Sustainability Assessment

Exposure to Hazardous Substances

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

[Add row]

Requested content

General

• This question refers to the whole company’s product portfolio and it is not restricted to the products that could potentially contain restricted substances or substances of very high concern (SVHC).
• If there are several regulations relevant to your business, you may add rows for each of these regulations.
• Note that some substances are included in multiple lists within a jurisdiction.

Regulatory classification of hazardous substances (column 1)

• Select the regulation in which your substances are included.
• If your substances are classified as hazardous in several regulations, select the regulation that corresponds to the location of your operations and for which you are able to provide a % of revenue associated with products containing substances in this regulation.
• If your products contain substances which are classified as hazardous as part of a regulation that includes several lists, use the ‘Please explain’ column to specify which list.

% of revenue associated with products containing substances in this list (column 2)

• Select the percentage that best applies to your organization for each of the Regulations you selected in column 1.
• Note that revenue relates to the products sold by the company.

Please explain (column 3)

• You may use this column to specify Regulatory lists not included in column 1.
• Briefly explain why your products contain hazardous substances, including any company-specific context.
• Indicate if there are opportunities to reduce the % of your revenue associated with hazardous substances, for example, if there are less harmful substances which could be substituted for the hazardous substances in your products.

Explanation of terms

• Revenue: Income arising in the course of an entity's ordinary activities (less discounts, allowances and returns) - before deducting costs for the goods/services sold and operating expenses to arrive at profit (based on the International Financial Reporting Standard).

Value chain engagement

(W1.5) Do you engage with your value chain on water-related issues?

Question dependencies

• Your response to W1.5 prompts subsequent questions. If your response to W1.5 is amended, data already entered in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions. The guidance for each question indicates if it is a dependent question.

Change from last year

Modified question; Revised question dependency (2022 W1.4)

Rationale

Engaging with value chain partners on water-related issues is essential for companies wishing to understand the current and future risks and opportunities associated with these relationships.

There are multiple drivers, benefits, and engagement ranges, from water-related supplier requirements to innovative partnerships for water stewardship with product users.

If you are not engaging with your value chain on water-related issues, CDP data users wish to know why you are not engaging in any way and what your plans are to do so in the future.

Connection to other frameworks

SDG

Goal 12: Responsible consumption and production

CEO Water Mandate

Response: Internal actions

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• Note that this section on value chain engagement does not ask for the water accounting data of your value chain.

Engagement (column 1)

• Select ‘Yes’ if you engage on water-related issues with the stakeholder specified in each row. Engagement can include water-related information collection, contractual requirements, innovation & collaboration, incentivization, education programs or other methods.

Primary reason for no engagement (column 2)

• This column is only presented if a ‘No’ response has been selected for a value chain stakeholder in column 1 (Engagement).
• Select the primary reason for not engaging with this stakeholder on water-related issues, or indicate your plans for future engagement.

Please explain (column 3)

• This column is only presented if a ‘No’ response has been selected for a value chain stakeholder in column 1 (Engagement).
• Use the text field to provide further details specific to your organization, which explain why you do not engage with a particular value chain stakeholder.
• If you have plans to engage with your value chain in the future, briefly explain them here. This should include which stakeholders you are planning to engage with, as well as a timeframe and methods for engagement.

Explanation of terms

• Value chain: The entire sequence of activities or partners that provide value to or receive value from an organization’s products and services, either within, upstream or downstream of direct operations.
• Value chain partner: A value chain partner includes any organization/individual a company that provides or receives value from the organisation’s products and services, up or downstream of its direct activities; for example, a customer, a franchisee or contractor the company engages with on water stewardship strategies.

(W1.5a) Do you assess your suppliers according to their impact on water security?

Question dependencies

• This question only appears if you select “Yes” in response to W1.5 column 1 (Engagement) in the row ‘Suppliers’.

Change from last year

New question

Rationale

The assessment of a company’s supplier impacts on water security allows for the identification of crucial aspects or areas where action is needed. This question allows data users to understand whether a company is aware of where in its supply chain water security impacts are occurring.

Ambition: Companies assess their suppliers according to impact on water security to identify the suppliers with a substantive impact, and use this to inform and prioritize their engagement with suppliers.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

S&P Global Corporate Sustainability Assessment

Critical Supplier Identification

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• By ‘suppliers’, this question refers to direct suppliers (Tier 1). If your organization assesses the impacts of further tiers of suppliers, you may state this in column 5 (Please explain). All other columns of the table refer to direct suppliers only.

Assessment of supplier impact (column 1)

• If you select a ‘No’ response, columns 2, 3, and 4 will not be presented. Provide an explanation in column 5 for why suppliers are not assessed according to impact on water security and any plans to do so in the future.

Number of suppliers identified as having a substantive impact (column 3)

• Enter the number of direct suppliers that your company has identified as having a substantive impact on water security after the assessment.

% of total suppliers identified as having a substantive impact (column 4)

• Out of your total direct suppliers, provide the proportion of suppliers identified as having a substantive impact on water security after the assessment.
• This number should be calculated using the figure provided in column 3 divided by the number of your total direct suppliers.

Please explain (column 5)

• If you selected “Yes, we assess the impact of our suppliers” in column 1:

- Briefly describe the approach taken to assess impact on water security, including the considerations selected in column 2 and the thresholds used to identify a supplier’s impact as ‘substantive’;
- For your suppliers with substantive impact, state whether this is predominately associated with a particular business activity, product line, or river basin.

• If in column 1 you selected “No, we do not assess the impact of our suppliers and have no plans to do so within the next two years”, provide your reasons.
• If in column 1 you selected “No, we do not currently assess the impact of our suppliers, but we plan to do so within the next two years”, provide a rough timeline and state the considerations that you are planning to include in the assessment.
• You may provide any further details useful to CDP data users.

Explanation of terms

• Substantive impact: An impact that has a considerable or a relatively significant effect. This can vary based on contextual factors.

Additional information

• CDP’s Water Watch can be used to analyze and assess the potential impact of different business activities in your supply chain on water. Water Watch ranks over 200 industrial activities, within 13 industry sectors, according to their potential impact on water resources – both in terms of water quantity/availability and water quality.

(W1.5b) Do your suppliers have to meet water-related requirements as part of your organization’s purchasing process?

Question dependencies

• This question only appears if you select “Yes” in response to W1.5 column 1 (Engagement) in the row ‘Suppliers’.
• Your response to W1.5b prompts W1.5c. If your response to W1.5b is amended, data already entered in the dependent question may be erased. In this case, be sure to re-enter data in W1.5c.

Change from last year

New question

Rationale

For many companies, their impact on water security may lie beyond direct operations. Setting water-related requirements drives supplier action and demonstrates a company’s strategic commitment to improving water security throughout its value chain.

Ambition: Companies contractually require their suppliers to address and eradicate negative impacts of their operations on water security.

Connection to other frameworks

SDG

Goal 12: Responsible consumption and production

Response options

Please complete the following table:

Requested content

General

• Water-related requirements can be either pre-requisites to establishing a purchasing relationship or be specified as metrics to achieve once onboarding is complete.
• Companies responding to either of the “Yes” options will be prompted to identify the water-related requirements and provide details of the compliance measures in place in the following question.

Suppliers have to meet specific water-related requirements (column 1)

• Select “Yes, water-related requirements are included in our supplier contracts” if your suppliers are obliged, as outlined in their contract with your organization, to adhere to specific water-related requirements set by your organization.
• Select “Yes, suppliers have to meet water-related requirements, but they are not included in our supplier contracts” if your suppliers have to meet water-related requirements as part of your organization’s purchasing process, but the requirements are not formally written as a contractual obligation. For example, your organization may have a non-contractual supplier code of conduct featuring water-related requirements, or water-related requirements may be included in your organization’s supplier selection process.

Comment (column 2) (optional)

• You may use this column to provide details to help data users understand your response.

Explanation of terms

• Onboarding: The process used to support and facilitate working with a new supplier.
• Purchasing process: The formal process of buying goods and services. The term is broader than “procurement process” as it also includes supply chain management.

(W1.5c) Provide details of the water-related requirements that suppliers have to meet as part of your organization’s purchasing process, and the compliance measures in place.

Question dependencies

• This question only appears if a ‘Yes’ response has been selected in W1.5b.

Change from last year

New question

Rationale

For many companies, their impact on water security may lie beyond direct operations. Setting and monitoring water-related requirements drives supplier action and demonstrates a company’s strategic commitment to improving water security throughout its value chain.

This question allows companies to indicate the priority actions they are driving in their supply chain, the levels of compliance, and how they enforce the requirements.

Ambition: Companies contractually require their suppliers to address and eradicate negative impacts of their operations on water security.

Connection to other frameworks

SDG

Goal 12: Responsible consumption and production

S&P Global Corporate Sustainability Assessment

Supplier Risk Management Measures

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Water-related requirement (Column 1)

Requested content

% of suppliers with a substantive impact required to comply with this water-related requirement (column 2)

• This column is only presented if you have selected “Yes, we assess the impact of our suppliers” in column 1 of W1.5a.
• Provide the percentage of your organization’s direct suppliers identified as having a substantive impact on water security (reported in W1.5a) that have to meet this water-related requirement.
• Do not include new or potential suppliers for whom you do not have data on water-related requirements.

% of suppliers with a substantive impact in compliance with this water-related requirement (column 3)

• This column is only presented if you have selected “Yes, we assess the impact of our suppliers” in column 1 of W1.5a.
• Provide the percentage of your organization’s direct suppliers identified as having a substantive impact on water security which you have confirmed are in compliance with this water-related requirement.

Mechanisms for monitoring compliance with this water-related requirement (column 4)

• Select the type(s) of monitoring mechanisms your organization has in place to assess compliance with the water-related requirement selected in column 1. If your organization does not monitor compliance of this water-related requirement, select “No mechanism for monitoring compliance”.

Response to supplier non-compliance with this water-related requirement (column 5)

• Select the most relevant procedure your business has in place for responding to non-compliant suppliers. Further details on each of the options are provided below:
  • Exclude: Select this option if you end a purchasing relationship with a non-compliant supplier (in the case of a prior or ongoing relationship) or avoid purchasing from a given non-compliant supplier (in the case of spot markets or lack of an ongoing purchasing relationship). This option is also applicable if you do not establish a purchasing relationship because of supplier unwillingness to comply with the water-related requirement.
  • No response: Select this option if you do not have a procedure for responding to non-compliant suppliers.
  • Retain and engage: Select this option if you continue to purchase the product or service while engaging with the supplier to resolve the non-compliance(s).
  • Suspend and engage: Select this option if you temporarily pause purchasing from a supplier but continue to engage with the supplier to resolve the non-compliance(s).

Comment (column 6) (optional)

• You may use this column to provide details to help data users understand your response.

Explanation of terms

• Third-party verification: Verification conducted by an independent entity that does not provide other services to the company.

(W1.5d) Provide details of any other water-related supplier engagement activity.

Question dependencies

• This question only appears if you select “Yes” in response to W1.5 column 1 (Engagement) in the row ‘Suppliers’.

Change from last year

Modified question (2022 W1.4b)

Rationale

Details of your engagement activity, such as the percentage of suppliers it covers and how its impacts are measured, is of interest to investors and other data users who wish to know the effectiveness of your supplier engagement. The nature of your engagement activities provides insight into your approach to water stewardship and collective action to address water challenges for your company, and to support public policy objectives, be they local or otherwise, such as the SDGs.

This question gives companies the opportunity to explain their approach and informs the data that is reported in W4 regarding both exposure to risks throughout the value chain and the company’s response.

Ambition: Companies engage with their suppliers to reduce and eliminate negative impacts on water security across their supply chain.

Connection to other frameworks

SDG

Goal 12: Responsible consumption and production

S&P Global Corporate Sustainability Assessment

Supplier Risk Management Measures

Supply Chain Transparency & Reporting

CEO Water Mandate

Response: Internal actions

Response options

Please complete the following table. You are able to add rows to this table using the "Add Row" button.

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Details of engagement (column 2)

Requested content

General

• In this question you have the opportunity to report your different supplier engagement activities (in addition to water-related supplier requirements reported in W1.5b-c) and to describe how this is driving water security.
• You may include qualitative information on engagement with suppliers beyond your direct (tier 1) suppliers, but you should only account for direct suppliers when calculating the percentages in columns 3 and 4.

Type of engagement (column 1)

• If your organization uses more than one of the types of supplier engagement listed or wishes to report an additional engagement type (select ‘Other’), add rows as needed.
• If your organization has no supplier engagement activity (other than that indicated in W1.5b-c), select “No other supplier engagement” and use column 5 (Rationale for your engagement) to explain why this is the case. Note that all other columns in this question will be disabled.

Details of engagement (columns 2)

• Your selection in column 1 will determine the options shown in column 2. If you select “Other, please specify”, provide a label for the details of engagement.

% of suppliers by number (column 3)

• Select the proportion of your direct suppliers that are covered by the engagement activity.
• For example, if you have 100 suppliers and 20 of them are engaged in the activity specified in column 2 (Details of engagement) you would select “1-25%” here.
• If you reported supplier requirements in W1.5b-c, this figure should reflect the % engaged, regardless of whether those suppliers also have a requirement or not.
• If the figure is unknown, you may provide an estimate or select ‘Unknown’ and explain why in column 5 (Rationale for your engagement). For example, this may be because of a lack of resources or instruction from management, or because of poor supplier tracking.

% of suppliers with a substantive impact(column 4)

• This column is only presented if you have selected “Yes, we assess the impact of our suppliers” in column 1 of W1.5a.
• Select the proportion of your direct suppliers that have been identified as having a substantive impact on water security (as reported in question W1.5a) with whom you engage through the activity specified in column 2 (Details of engagement). This proportion should be calculated regardless of whether the suppliers also have water-related requirements (as reported in questions W1.5b-c).
• For example, engaging with 20% of your suppliers by number may account for 80% of your suppliers with a substantive impact
• If the figure is unknown you may provide an estimate or select ‘Unknown’ and explain why in column 5 (Rationale for your engagement).

Rationale for your engagement (column 5)

• Include any details that would help data users to understand why you use this type of engagement activity with your suppliers, and give a rationale for the coverage you indicated in columns 3 and 4.
• If you indicated ‘No other supplier engagements’ in column 1 (Type of engagement), or if the figure in columns 3 or 4 is unknown or estimated, you should explain why, including a company-specific reason or any future plans.

Impact of the engagement and measures of success (column 6)

• Provide examples of the beneficial water-related outcomes of the engagement activity. Beneficial outcomes can be either potential or already realized. For example, you may wish to describe how the engagement has progressed or protected water security for your company or for other users, or how it has helped your company or your suppliers to build resilience.
• Additionally, describe here how success is measured, for example which metrics you use to assess the success of this engagement activity, and explain why these measures were selected.

Comment (column 7) (optional)

• If you wish to explain any other aspect of your approach to engagement with suppliers, please use this column.

Example response

(W1.5e) Provide details of any water-related engagement activity with customers or other value chain partners.

Question dependencies

• This question only appears if you select “Yes” in response to W1.5 column 1 (Engagement) in the row ‘Other value chain partners (e.g., customers).

Change from last year

Modified question (2022 W1.4c)

Rationale

This question will be particularly relevant to companies whose activities may be affected by water issues outside of their supply chain. Such companies will wish to engage with other partners in order to reduce risk and encourage stewardship and innovation, e.g. in their wider value chain.

Connection to other frameworks

SDG

Goal 12: Responsible consumption and production

CEO Water Mandate

Response: Internal actions

Response options

Please complete the following table. You are able to add rows using the “Add Row” button.

[Add row]

Details of engagement (Column 3)

Requested content

General

• This question is asking about how your organization engages with its value chain beyond its suppliers.

Type of stakeholder (column 1)

• If your organization engages with more than one type of value chain stakeholder or wishes to report an additional stakeholder type (select ‘Other’), add rows as needed.

Type of engagement (column 2)

• If your organization uses more than one of the types of engagement listed or wishes to report an additional engagement type (select ‘Other’), add rows as needed.

Details of engagement (column 3)

• Your selection in column 2 determines the options presented in column 3.

Rationale for your engagement (column 4)

• Include any details that would help data users to understand why you engage with the type of stakeholder selected in column 1 and why you use this type of engagement activity as indicated in columns 2 and 3.

Impact of the engagement and measures of success (column 5)

• Detail the beneficial outcomes of the engagement activity. Beneficial outcomes can be either potential or already realized. For example, you may wish to describe how the engagement has progressed or protected water security for your company or for other users, or how it has helped your company or stakeholders to build water resilience.
• Describe how success is measured, for example which metrics you use to assess the success of this engagement activity, and explain why these measures were selected.

W2 Business impacts

Module Overview

This module asks about water-related impacts on your organization and your response to them. These are impacts that have occurred in the reporting year, including those resulting from regulatory violations (Module 4 asks about potential impacts, i.e. risks).

Demonstrating that your organization understands how water related issues have impacted it in the past helps provide insight into the water risks you may be exposed to, the risk assessment process needed, and which stakeholders and contextual issues should be included. The financial related information that is requested may help companies with their climate-related disclosures in line with the TCFD recommendations.

Note: CDP uses the term ‘impacts’ to refer either to effects on communities and ecosystems or to effects of water challenges on the business. In W2 ‘Business impacts’, the term ‘impacts’ refers to impacts on the business, be they due to physical, regulatory, market or technology drivers.

Key changes

• Modified question: W2.2 has been restructured into a table for data improvement.
• Modified guidance: W2.1a includes a modified point in guidance for column “Description of impact”.
• Click here for a list of all changes made this year.

Sector-specific content

• Sector specific additions to drop downs in W2.1a: Metals & Mining, Coal, Food, Beverage & Tobacco, Agricultural Commodities, Chemicals.

Pathway diagram - questions

This diagram shows the questions contained in module W2. To access question-level guidance, use the menu on the left to navigate to the question.

Recent impacts on your business

(W2.1) Has your organization experienced any detrimental water-related impacts?

Change from last year

No change

Rationale

Past impacts are a useful indicator of inherent risks that your organization may be exposed to. Your response to this question lets CDP data users know whether your business was impacted by water-related issues during the reporting period. Follow up questions indicate how you responded and allow you to explain how you are building resilience.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Business Impacts of Water Related Incidents

CEO Water Mandate

Implications: External impacts

Response options

Select one of the following options:

• Yes
• No

Requested content

General

• Select ‘Yes’ if you have experienced any detrimental impacts in your business operations, revenue or expenditure in the reporting year that were related to water.
• For businesses, detrimental impacts may include direct financial impacts such as on production, revenue, or assets, but may also include any other impacts such as loss of a license, policy engagement, or brand image.

Explanation of terms

• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
• Water-related impact on the business: The effects on an organization of a physical, regulatory, reputational or technological challenge, event or action related directly or indirectly to water. Note that the CEO Water Mandate’s Corporate Water Disclosure Guidelines, and the GRI standards, generally refer to “impacts” as the effects of the business on ecosystems and communities.

(W2.1a) Describe the water-related detrimental impacts experienced by your organization, your response, and the total financial impact.

Question dependencies

• This question only appears if you select “Yes” in response to W2.1.

Change from last year

Minor change; Modified guidance

Rationale

Past impacts are a useful indicator of inherent risks that your company may be exposed to. Your response strategy to past impacts informs CDP data users how you are attempting to prevent future impacts and build resilience. ‘Total financial impact’ is an important indicator of how your organization quantifies the importance of that water issue.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Business Impacts of Water Related Incidents

CEO Water Mandate

Implications: External impacts

Response options

Please complete the following table. The table is displayed over several rows for readability. You are able to add rows by using the “Add Row” button at the bottom of the table.

[Add Row]

Primary impact driver (column 2b)

Primary impact (column 3)

Primary response (column 5)

Requested content

General

• This question requests information on the water-related detrimental impacts that your organization experienced in the reporting year, the driver of the impact, your response and the total financial impact.
• Each row in this table should report a primary impact driver for a primary impact, and your organization’s primary response.
• For a particular river basin, if you wish to report more than one impact driver or impact, use the “Add Row” function and enter this information. Please refrain from providing more than three impact drivers per river basin. Report the drivers causing the most substantive impacts.

Country/Area (column 1a)

• From the drop-down menu provided, please select the country/area associated with the impact driver for the impact you are reporting.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

River basin (column 1b)

• From the drop-down options provided, select the river basin associated with the impact driver. If you do not see the basin required, select “Other, please specify” and write in the correct river basin using the text box provided.
• For companies withdrawing water from large confined aquifers that may not discharge to the river basin they are located in e.g. Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source. Ensure that the correct country/area name is selected in column 1a (Country/Area).
• You may want to put the sub-basin of a bigger river basin identified in the drop-down menu. In this case use the “Other, please specify” option in the following format: “Putumayo, Amazon”.
• If you select “Other, please specify”, provide a label for the river basin.
• For full instructions see the Introduction to CDP's water security reporting guidance.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

Type of impact driver (column 2a)

• Consider whether the impact you wish to report was primarily related to, triggered by or caused by, a physical (acute or chronic), regulatory, reputational/market, or technology issue.
• This will determine the list of impact drivers that appears in column 2b.
• Note that a selection must be made for both column 2a and column 2b. Your data will not be saved if either column is left blank.

Primary impact driver (column 2b)

• CDP provides a list of impact drivers for responding companies to choose from. They are separated into five main groups: acute physical, chronic physical, regulatory, reputational/markets, and technology impact drivers.
• The drop-down options presented depend on the type of impact driver you selected in column 2a.
• Note that the driver you select should relate the river basin selected in column 1b.
• In the case that there may be more than one driver, or a chain of causes, for an impact, you should select what you consider to be the primary driver.
• If you do want to choose an additional driver for a river basin, you will need to add another row to report the details.
• If you select “Other, please specify”, provide a label for the primary impact driver.
• Note that a selection must be made for both column 2a and column 2b. Your data will not be saved if either column is left blank.

Primary Impact (column 3)

• Select the primary water-related impact your organization felt in the reporting year due to the driver in column 2b.
• Impacts can be operational or financial and can affect your organization, your consumers or other stakeholders.
• If none of the available options are suitable to your organization, please select “Other, please specify” and a text box will be available for you to complete.
• If you have identified multiple/secondary impacts, select the primary impact here and describe the secondary impacts in column 4.
• If you select “Other, please specify”, provide a label for the primary impact.

Description of impact (column 4)

• Explain the ways in which the impact was detrimental to your organization. For example, did it require additional spending to maintain normal output? Was output reduced?
• Include details as to the length of time your business was impacted or if it persists (e.g. severe drought was experienced for five months of the reporting year. Some processes were unable to operate.)
• Provide quantitative data relevant to the detrimental impact (e.g. proportion of sales lost).

Primary response (column 5)

• From the drop-down list, select the primary response strategy that most closely describes how your organization has responded to the impact driver in column 2b.
• If your organization implemented/will implement more than one response strategy, you may provide details in column 7.
• If an appropriate response strategy is not listed, please select “Other, please specify” and a text box will be provided so that you can write in your own response.

Total financial impact (column 6)

• Enter a figure for total financial impact. This is the total cost to the business - so a sum of the financial implications of the impact itself plus the actual or anticipated cost of the response to deal with it.
• This figure should be in the same currency that you selected for all financial information disclosed throughout your response in question W0.4.
• If you do not know the financial impact, you may provide an estimate. Remember that a zero should not be used for an absence of data.

Description of response (column 7)

• Provide additional details of your organization’s response strategy. You may include any secondary response strategies.
• Include the timeframe expected for the response strategy to be implemented. Is the response underway, not yet implemented, or completed?
• Describe what difference the response has made/is likely to make, including:

- How effective the response has been/is expected to be in preventing the inherent impact driver reoccurring.
- How effective the response has been/is expected to be improving your organization’s resilience, so preventing future financial or operational impacts.
- Whether water security for your company is likely to improve as a result, at either the asset or corporate level.
- Whether water security for other users is likely to improve as a result.
- Whether the response contributes to the progress of other UN Sustainable Development Goals.
- Whether the response strategy involves any collective action initiatives.

• Your public response to this question may be shared with the Water Action Hub, which works to promote water stewardship knowledge sharing and collaboration. Before submitting your disclosure to CDP, you will be requested to indicate your permission for CDP to share contact details. This enables the Hub to contact you about a project suitable for sharing on their platform and obtain your consent. This is optional. In this question, we ask that you provide as much information about your response as possible, particularly local projects, including:

- Who else is involved in the joint project /initiative (such as names of organizations or government offices) or who you would like to work with (government agencies, other companies, NGOs, etc.)
- The geographic or other scale of the project.
- What the project seeks to accomplish including expected benefits for the watershed beyond the company.
- When the project started and if it has concluded or if it is continuing.
- If possible, the specific location of the project.

Note that these criteria are not scored but are crucial to building a project to share in the Water Action Hub and without this detail the project may not be suitable to transfer to this platform.

• Provide details on the total financial impact your organization has suffered as a result of the impact and your response, including:

- Methods for calculating your answer to column 6 (including any assumptions the figure is dependent on).
- Whether this is a recurring or a fixed cost.
- What timescale this cost is likely to be.

• If you do not know the financial impact and you left column 6 blank, write “Impact not quantified financially” and give an explanation.

Explanation of terms

• Impact driver: The factor/ driving force causing the impact being reported. Impact drivers are typically physical (e.g. weather extreme events), regulatory, reputational and markets related, or technological.
• Soil degradation: Degradation of the topsoil quality related to soil loss from erosion processes of degradation from the nutrient loss or salinization.

Compliance impacts

(W2.2) In the reporting year, was your organization subject to any fines, enforcement orders, and/or other penalties for water-related regulatory violations?

Question dependencies

• Your response to W2.2 will determine which subsequent questions are presented in this section. If your response to W2.2 is amended, data in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions. The guidance for each question indicates if it is a dependent question.

Change from last year

Modified question

Rationale

Knowledge of compliance related fines and other non-financial penalties across your organization demonstrates an awareness by your organization of its impact on the local operating environment as well as the potential financial implications of its water management.

This information helps investors and other data users to gain some insight into the effectiveness of your control procedures at a corporate level.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Environmental Violations

CEO Water Mandate

Current state: Compliance

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• Note that this question asks about fines, penalties and/or enforcement orders that were issued to your company during the reporting year.
• You should not include information about fines and penalties that were issued to your company in a previous year but became payable in this year.

Water-related regulatory violations (column 1)

• Select ‘Yes’ if your organization has been penalized for a water-related regulatory violation during the reporting year, even if it was not considered as significant.

Fines, enforcement orders, and/or other penalties (column 2)

• This column is only presented if “Yes” is selected in column 1.

Comment (column 3) (optional)

• You may use this column to provide information that will help CDP data users to understand your selection, e.g., how you monitor water-related regulatory violations.

Explanation of terms

• Enforcement order: A non-financial restriction as punishment for a regulatory violation or other compliance offence. Examples of non-financial enforcement orders include removal of abstraction licenses or discharge consents.
• Fine: A specific type of penalty that requires payment of money as punishment for a regulatory violation or other compliance offence.
  
• Penalty: A punishment of any kind due to a regulatory violation or other compliance offence.
  

(W2.2a) Provide the total number and financial value of all water-related fines.

Question dependencies

• This question only appears if you select “Fines” or “Fines, but none that are considered as significant” in response to W2.2.

Change from last year

No change

Rationale

Providing aggregated information, for absolute numbers and the tracking of numbers of compliance-related fines, is evidence that your organization is monitoring its local operating environments and keeping track at corporate level.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Environmental Violations

CEO Water Mandate

Current state: Compliance

Response options

Please complete the following table:

Requested content

Total number of fines (column 1)

• Note that this question asks about fines that were issued to your company during the reporting year.
• You should not include information about fines that were issued to your company in a previous year but became payable in this year.

Total value of fines (column 2)

• This figure should be in the same currency that you selected for all financial information disclosed throughout your response in question W0.4.

% of total facilities/operations associated (column 3)

• Indicate the percentage of your sites that were associated with the compliance-related fines reported in column 1. For example, if 10 facilities are listed in column 1 and you have 100 facilities worldwide, then the response here would be 10 percent.

Number of fines compared to previous year (column 4)

• Select the option most applicable to the change in the number of fines compared to the previous year. CDP does not define the categories in this menu as it is difficult to prescribe a threshold that is meaningful to all organizations. You may use column 5 to explain your selection and the threshold you applied.
• CDP recognizes that a change in the total number of fines does not equate to the change in magnitude of the total financial penalty.

Comment (column 5) (optional)

• You may use this column to provide details to help data users understand your response; such as an explanation for your reported trend or the relationship between the total number of fines and the total value of the fines, e.g., whether one fine accounts for a large part of the total financial penalty.

(W2.2b) Provide details for all significant fines, enforcement orders and/or other penalties for water-related regulatory violations in the reporting year, and your plans for resolving them.

Question Dependencies

• This question only appears if you select “Fines” or “Enforcement orders or other penalties” in response to W2.2.

Change from last year

No change

Rationale

Providing these details of fines and other non-financial penalties, such as location and your plans for resolving them, demonstrates to CDP data users that your organization is keeping track at the corporate level and also that it has an awareness of impacts in their local operating environment.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Business Impacts of Water Related Incidents

Environmental Violations

CEO Water Mandate

Current state: Compliance

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

[Add Row]

Requested content

General

• CDP does not provide guidance as to what constitutes a “significant” regulatory violation, as this will vary by local context and the nature of the business. However, it will usually imply a major impact on the environment, community and/or business(es).
• Organizations should develop a consistent use of the term throughout their response. If you need further guidance as to what constitutes “significant”, CDP recommends companies consider the general definition of “materiality” provided in the GRI Standards as a starting point. This definition puts the onus on companies to determine a materiality threshold based on internal, industry, and external stakeholder interests.
• Note: this question asks about fines, enforcement orders and/or penalties that your company was issued with during the reporting year. You should not include information about fines and penalties that were issued to your company in a previous but became payable in this year.

Type of penalty (column 1)

• If you select “Other, please specify”, provide a label for the type of penalty.

Financial value of penalty (column 2)

• Your response should include all costs related to the regulatory violation, i.e. financial penalties imposed on your organization, costs related to an enforcement order or any other operational or capital expenditure resulting directly to the violation itself or actions to prevent its reoccurrence, such as having to install new technology to meet the requirements of an enforcement order or employing new staff to monitor for compliance etc.
• This figure should be in the same currency that you selected for all financial information disclosed throughout your response in question W0.4.

Country/Area (column 3a)

• Note that this is asking for the location of the incident associated with the penalty selected in column 1.
• If more than one country/area applies, please select a primary country/area and explain this in column 5.
• Note that a selection must be made for both column 3a and column 3b. Your data will not be saved if either column is left blank.

River basin (column 3b)

• Note that this is asking for the river basin associated with the incident that led to the penalty reported in column 1.
• From the drop-down options provided, select the appropriate river basin. If you do not see the basin required, select “Other, please specify” and write in the correct river basin using the text box provided.
• For companies withdrawing water from large confined aquifers that may not discharge to the river basin they are located in e.g. Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source. Ensure that the correct country/area name is selected in column 3a (Country/Area).
• You may want to put the sub-basin of a bigger river basin identified in the drop-down menu. In this case use the “Other, please specify” option in the following format: “Putumayo, Amazon”.
• If you select “Other, please specify”, provide a label for the river basin.
• For full instructions see the Introduction to CDP's water security reporting guidance.
• Note that a selection must be made for both column 3a and column 3b. Your data will not be saved if either column is left blank.

Type of incident (column 4)

• Select the type of incident that is most applicable to the penalty selected in column 1.
• If you select “Other, please specify”, provide a label for the type of incident.

Description of penalty, incident, regulatory violation, significance, and resolution (column 5)

• Penalty: Your response here could include any details that would help CDP data users understand the fine, enforcement order or other penalty selected in column 1.
• Significance: You may include a description of how and why your organization is classifying the penalty in column 1 as significant for your organization.
• Incident and regulatory violation: For each penalty you list in column 1, you may give details of the incident and regulatory violation that resulted in the penalty, e.g.:

- more details on the incident/violation selected in column 4; e.g. the nature of a breach in an abstraction license or a discharge consent, or the nature of other water and wastewater related regulation violation.
- whether the penalty was for a single incident or multiple incidents, and the frequency with which it/they occurred.
- the impact the incident and the penalty had on your business, other water users and/or the natural environment; whether there were any criminal sanctions.

• Resolution: Please provide a brief description of how your organization has resolved or is planning to resolve the incident, including steps taken to ensure the regulatory violation is not repeated. This may include, for example, internal actions and/or external engagement such as: upgrading facilities, changing treatment methods, decreasing volume of discharge, increasing volumes of reused or recycled water, engaging with policymakers, or engaging with local communities. If your organization has a compliance assurance system in place, you may provide details.

W3 Procedures

Module Overview

This module requests information about the procedures that organizations have in place to manage water pollutants, to understand inherent risk exposure, and to manage other issues salient to their sector. These management procedures are considered important for water security - independent of a company’s own perception or assessment of any associated net risk for their company. This is why we ask companies to answer these questions before disclosing whether they consider themselves exposed to substantive water-related risk and what those risks are.

Questions in section W3.2 are targeted at specific sectors only and focus on tailings dams management.

As there is no globally recognized standard for water risk assessment, this module provides evidence as to the robustness, comprehensiveness and integrity of an organization’s risk assessment. Companies are asked to explain what processes and procedures have been implemented at the corporate level and other more local levels due to the importance of matching response strategies to the local context.

This data helps provides data users with confidence that the organization’s disclosure of water risks in module 4 is comprehensive.

Key changes

• Two new questions:
  • W3.1 asks whether any potential water pollutants are associated with your organization’s activities.
  • W3.1a requests details on how the impacts of potential water pollutants are minimized.
• Modified question: W3.3b has been restructured from an open text field to a four-column table.
• Additional guidance: A definition of “Product use phase” has been added in W3.3a.

Sector-specific changes

• Eight removed questions: sector-specific pollutant management questions replaced with two general questions (2023 W3.1 and W3.1a):
  • Chemicals sector: W-CH3.1 (2022) and W-CH3.1a (2022)
  • Electric utilities sector: W-EU3.1 (2022) and W-EU3.1a (2022)
  • Food, beverage, and tobacco sector: W-FB3.1 (2022) and W-FB3.1a (2022)
  • Oil and gas sector: W-OG3.1 (2022) and W-OG3.1a (2022)
• Four new questions for the Coal sector:
  • W-MM3.2/W-CO3.2, W-MM3.2a/W-CO3.2a, W-MM3.2b/W-CO3.2b, W-MM3.2c/W-CO3.2c
• Click here for a list of all changes made this year.

Sector-specific content

• Additional section for Metals & Mining and Coal: W3.2.

Pathway diagram - questions

This diagram shows the questions contained in module W3. To access question-level guidance, use the menu on the left to navigate to the question.

Pollutant management procedures

(W3.1) Does your organization identify and classify potential water pollutants associated with its activities that could have a detrimental impact on water ecosystems or human health?

Question dependencies

• Your response to W3.1 prompts W3.1a. If your response to W3.1 is amended, data in the dependent question may be erased. In this case, be sure to re-enter data for the relevant question.

Change from last year

New question; Modified question for CH, EU, FB, and OG

Rationale

Connection to other frameworks

SDG

Response options

Please complete the following table:

(*column/row appearance is dependent on selections in this or other questions)

Requested content

General

• Consider any potential water pollutants associated with the substances you handle and the properties of your water discharges.

How potential water pollutants are identified and classified (column 2)

• This column is only presented if “Yes, we identify and classify our potential water pollutants” is selected in column 1.
• Provide company-specific details of the policies and processes your organization has in place that aim to identify and classify the potential water pollutants that may have detrimental impacts over water bodies/ecosystems or human health.
• Include your general approach to determining:
  • How these pollutants are classified, for example any standards and/or methodologies used; and
  • The most relevant metrics and/or indicators used to identify these substances.

Please explain (column 3)

• This column is only presented if “No, we do not identify and classify our potential water pollutants” or “Unknown” is selected in column 1.
• Use this field to briefly explain why your organization does not yet define potential water pollutants or is in the process of doing so.
• If relevant, provide the timelines of when you expect this to be implemented and any established standards and/or methodologies you plan to use for the classification of the potential water pollutants.

Explanation of terms

• Water pollutants: Physical (including thermal), biological, or chemical agents (organic, inorganic substances or heavy metals) that have the direct or indirect potential to negatively modify/contaminate water bodies and/or water ecosystems or affect human health.

(W3.1a) Describe how your organization minimizes the adverse impacts of potential water pollutants on water ecosystems or human health associated with your activities.

Question dependencies

This question only appears if in W3.1 “Yes, we identify and classify our potential water pollutants” is selected.

Change from last year

New question; Modified question for CH, EU, FB, and OG

Rationale

Organizations are able to describe the company-specific actions and procedures they have in place to minimize the adverse impacts associated with the water pollutants identified. This will demonstrate to data users the organization’s commitment to address these water-related risks.

Ambition: Companies identify and classify potential water pollutants linked to their business operations and products and have actions and procedures in place to reduce and manage pollution effectively.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

Requested content

General

• Add only one row for each pollutant category.
• The water pollutant categories include groups of substances targeted by governments, institutions, and non-governmental organizations (e.g., inorganic pollutants), as well as emerging contaminants recognized as potentially dangerous but for which no formal restrictions are in place yet (e.g., microplastics).
• Report up to 10 of your most significant potential water pollutant categories in terms of impact on water ecosystems and human health.

Water pollutant category (column 1)

• Select the category of water pollutants identified as relevant to your organization.
• Other nutrients and oxygen demanding pollutants refers to nutrients and oxygen demanding pollutants other than nitrates and phosphates, which are separate options.
• Other synthetic organic compounds refers to synthetic organic compounds other than pesticides, which is a separate option.
• Other physical pollutants includes heat, radiation, light, noise/vibration, suspended solids and sediments.
• Use the “Other, please specify” option if the water pollutant category identified is not listed. Note that in column 2 you may further specify your substances.
• See ‘Explanations of terms’ for further explanations of pollutant categories.

Description of water pollutant and potential impacts (column 2)

• Provide details of how the pollutant category selected in column 1 is linked to potential impacts on water bodies, ecosystems and/or human health. Relate the potential impacts with your organization’s activities. At least one potential impact should be identified for each pollutant category.
  • You may also state the potentially impacted ecosystems or populations (e.g., micro- or macrofauna, vegetation, local population) and the type of effects in terms of toxicity, coverage, persistence, bioaccumulation, etc.
• Specify which chemicals (e.g., chlorine, sulfides, phenols etc.) or physical parameters (e.g., temperature, turbidity, etc.), from the water pollutant category selected, have the potential to pollute water resources.
• If known, specify if your pollutants are included in any hazardous substance lists (e.g., Candidate list of REACH Regulation).

Actions and procedures to minimize adverse impacts (column 4)

• Select the most relevant procedures in place to effectively manage the potential impacts identified.
• These procedures may be company-wide responses or those at the local or river-basin level. This can be specified in column 5 (Please explain).

Please explain (column 5)

• Briefly explain how the procedures selected in column 4 manage the potential impacts detailed and provide information on how the success of the procedure is evaluated.
• If you selected ‘Procedure(s) under development/ R&D‘ in column 4, provide the timelines of when your actions and procedures will be implemented and how they are going to be used to minimize the impacts of water pollutants on water bodies.
• If you selected the option ‘Other, please specify’ in column 4, describe the management practice.

Explanation of terms

• Inorganic pollutants: heavy metals, mineral acids, inorganic salts, other metals, complexes of metals with organic compounds, cyanides, sulphates, etc.
• Nutrients and oxygen demanding pollutants: bio-degradable organic compounds in suspended, colloidal, or dissolved form.
• Pathogens: viruses and bacteria.
• Synthetic organic compounds: detergents, pesticides, food additives, pharmaceuticals, insecticides, paints, fibres, PCBs, solvents, PAHs, and VOCs.

Other management procedures

The questions in this section only apply to organizations with activities in certain sectors. Questions will not appear unless you have opted to view the following sector-specific questions:

• Metals & mining
• Coal

Risk identification and assessment procedures

(W3.3) Does your organization undertake a water-related risk assessment?

Question Dependencies

• Your response to W3.3 prompts subsequent questions to be presented. If your response to W3.3 is amended, data in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions.
• If your organization does not currently incorporate a water risk assessment into its core business procedures you will be presented with question W3.3c.
• The guidance for each question indicates if it is a dependent question.

Change from last year

No change

Rationale

CDP asks about water-related risk assessment so that data-users may gauge the thoroughness of your company's understanding of its risk exposure.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

Response options

Select one of the following options:

• Yes, water-related risks are assessed
• No, water-related risks are not assessed

Requested content

General

• Please select "Yes":

- if you have completed a water-related risk assessment for at least part of your operations or value chain, or
- if your organization has an integrated environmental risk assessment that considers any water-related risks among other environmental aspects.

• Only select "No" if you have not conducted any form of water-related risk assessment.

Explanation of terms

• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
• Residual risk: The risk remaining after a specific action has been taken to manage the risk.
  
• Water-related risk to the business: The possibility of an organization experiencing a water-related challenge (e.g., water scarcity, water stress, flooding, infrastructure decay, drought (adapted from the CEO Water Mandate's "Corporate Water Disclosure Guidelines").
  

(W3.3a) Select the options that best describe your procedures for identifying and assessing water-related risks.

Question dependencies

• This question only appears if you select “Yes, water-related risks are assessed” in response to W3.3.

Change from last year

Minor change; Additional guidance

Rationale

Providing details of your water risk assessment coverage and procedures allows CDP data users to assess the thoroughness of your risk assessment and whether this is appropriate for the water dependency and risks that you disclose for each stage of your value chain.

To understand the comprehensiveness of the risk assessment, data users need to know which contextual issues and stakeholders inform your company’s understanding of water-related risks, which are considered relevant, and why.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Quantity & Quality-Related Water Risks

Exposure of Suppliers to Water Risks

Exposure to Hazardous Substances

CEO Water Mandate

Implications: Business risks

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

[Add Row]

Risk assessment procedure (column 3)

Tools and methods used (column 7)

Requested content

General

• If you have different coverages or different risk identification and assessment procedures for different stages of your value chain, add a row for each stage.
• Note that W3.3b asks for a rationale for your approach to risk assessment and the choice of procedures and tools you describe in this question.

Value chain stage (column 1)

• Other stages of the value chain: Companies are encouraged to carry out some level of risk assessment beyond direct operations, suppliers, and product use. For example, this could include the distribution or disposal of products, or franchisees you engage with on water-related risks.

Coverage (column 2)

• Select 'Full' if you carry out at least an initial light touch assessment across the whole of your operations, supply chain, product use phase, or other value chain stage; for example to identify priority 'hot spots' that require a more comprehensive water risk assessment. You should give the specific details and rationale for your approach in W3.3b, such as what tiers of your supply chain are included and why.
• Select 'Partial' if certain elements of your direct operations, supply chain, product use phase, or other stages of your value chain are excluded from your risk assessment process. Explain your reasons in W3.3b.

Risk assessment procedure (column 3)

• For the stages of your value chain selected in column 1, indicate your company’s main procedure for identifying and assessing water-related risk. If multiple approaches apply, select the main or primarily applicable procedure and note this in column 10.
• If none of the available options are suitable, select “Other, please specify” to provide a label for the risk assessment procedure.
• You will be able to explain your approach and give a rationale in W3.3b.
• Note: “Enterprise risk management” is an established standardized framework for integrating sustainability risks into company risk assessment. See the ‘Explanation of terms’.

Type of tools and methods used/Tools and method used (columns 6-7)

• Your selection in column 6 will determine which tools/response options appear in column 7.
• If you select “Other, please specify”, provide a label for the tool or method used.

Contextual issues considered (column 8)

• Select all issues that are considered in your organization's water-related risk assessment(s).
• If you select ‘Other, please specify’, provide a label for the issue you consider.

Stakeholders considered (column 9)

• Select all the stakeholders that most accurately reflect the stakeholders considered as part of your risk assessment.
• If you select ‘Other, please specify’, provide a label for the stakeholder you consider.

Comment (column 10) (optional)

• If ‘Partial’ is selected in column 2, provide the level of coverage, e.g. which geographies, business units, products or which tiers of supply chain.
• If “Other” tools are selected in column 7, you can give some details here.
• You will be able to explain your approach and give a rationale in W3.3b.

Explanation of terms

• Direct operations: Your organization’s operations include anything your company does itself for the purpose of producing goods and services and maintaining the functionality of the business. This covers any internal supply chains between your organization’s business units. For example, a business unit within your company that supplies components to another business unit within your company would be considered part of your organization’s own operations.
• Supply chain: Your organization’s supply chain is comprised of all external inputs to your operations, including materials, components, consumable inputs, and services. The scope of your supply chain may extend to multiple levels of supply, e.g., component suppliers and the suppliers of raw materials used to produce those components.
• Product use phase: This stage of the value chain starts when the product reaches the consumer and ends when the consumer disposes of the product.
• Value chain stage: One part of the sequence of activities that provide value to or receive value from the organization’s products and services. This can include activities within the organization’s direct operations, or up or downstream of those operations; such as the supply chain, joint ventures, franchisees, product users.
• Risk management: Risk management involves understanding, analyzing and addressing risk to make sure organizations achieve their objectives. So it must be proportionate to the complexity and type of organization involved (Institute of Risk Management, 2016).
• Enterprise risk management: This is an integrated and joined up approach to managing risk across an organization and its extended network (Institute of Risk Management, 2016).
• Contextual issue: External influences relevant to the organization’s water security and water-related risks.
• Water availability: The natural runoff (through groundwater and rivers) minus the flow of water that is required to sustain freshwater and estuarine ecosystems and the human livelihoods and well-being that depend on these ecosystems. Water availability typically varies within the year and also from year to year. Water availability might be reduced by decreases in both the water quantity and quality of water resources (adapted from the CEO Water Mandate’s “Corporate Water Disclosure Guidelines”).
• Regulator: A body with a statutory authority to enforce laws, standards, and other legal regulations. They are appointed by government but can operate independently of it.

(W3.3b) Describe your organization’s process for identifying, assessing, and responding to water-related risks within your direct operations and other stages of your value chain.

Question dependencies

• This question only appears if you select “Yes, water-related risks are assessed” in response to W3.3.

Change from last year

Modified question

Rationale

By providing an explanation for the steps and procedures that make up your risk assessment process, including identification, prioritizing and decision making, investors and other data users will know whether your organization has a robust approach to risk management. They will be able to consider whether it is optimal for your activities, and the locations and markets that you and your suppliers operate in.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

Response options

Please complete the following table:

Requested content

General

• This question asks you to provide a rationale for your approach to risk assessment and to explain your choice of procedures and tools described in W3.3a.
• Note that specific details of inherent risks and opportunities faced by your organization should be disclosed in Module 4.
• Note that your response to this question may refer to the position of employees relevant to your risk assessment process. In this case, do not include the name of any individual or any other personal data in your response.

Rationale for approach to risk assessment (column 1)

• Include an explanation of:
  • Value chain stage not risk assessed: rationale for not assessing certain stages of the value chain.
  • Level of coverage: why you have chosen the level of coverage (i.e., full or partial). For example, partial coverage based on geography or supply chain tiers.
  • Tools and methods used: rationale for the selections in column 'Tools and methods used' in W3.3a and brief explanation of their application (e.g., which datasets or indicators are used and why).
  • Risk classification: how decisions are made on the severity of the risks.

Explanation of contextual issues considered (column 2)

• Explain why each of the contextual issues was selected in column 'Contextual issues considered' in W3.3a.

Explanation of stakeholders considered (column 3)

• Explain why each of the stakeholders was selected in column ‘Stakeholders considered’ in W3.3a.

Decision-making process for risk response (column 4)

• Explain your decision-making process for risk response – including for example:
  • how the information collected, such as on contextual and stakeholder issues, is used in decision making;
  • how decisions are made to mitigate, transfer, accept, or controls risks;
  • references to risks terminology / approaches that you employ.

Explanation of terms

• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
• Residual risk: The risk remaining after a specific action has been taken to manage the risk.
  
• Risk procedures: The details of the steps that make up a risk identification, assessment and management process, such as frequency, geographic scope, tools used, issues addressed and stakeholders considered.
• Risk process: The combination of steps taken to identify, quantify, monitor, record, prioritize, and respond to risk to minimize its likelihood or impact so that business objectives can be met.

(W3.3c) Why does your organization not undertake a water-related risk assessment?

Question Dependencies

• This question only appears if you select “No, water-related risks are not assessed” in response to W3.3.

Change from last year

No change

Rationale

Your company has received this questionnaire because it is believed to conduct activities with a high dependency on a stable supply of fresh water and/or has a significant potential for polluting freshwater resources. As such, investors are likely to consider that you are exposed to water-related risks.

A thorough risk assessment is integral to appropriately identifying, understanding and addressing water-related risks. Without undertaking a risk assessment, companies may be unable to determine the best ways to prepare for future uncertainties and liabilities.

Companies may have many reasons for not undertaking risk assessments, and CDP data users are interested in learning more about why this is the case for your company and the planning processes and contexts for this.

Response options

Please complete the following table:

Requested content

Primary reason (column 1)

• Choose the option that best explains why your organization does not undertake a water-related risk assessment.
• If multiple options reasonably apply to your company, select the primary option in column 1 and explain any additional reasons in column 2.
• If you select “Other, please specify”, provide a label for the primary reason.

Please explain (column 2)

• Use this space to provide company-specific insight as to your selection in column 1.
• Your answer here should align with the importance you assign to water in W1.1.
• Describe any future plans to undertake a water risk assessment (or details of any risk assessment process currently underway) and the likely timescale for implementation. Include company-specific information in your description.

W4 Risks and opportunities

Module Overview

The structure of the water security questionnaire allows an organization to tell investors, customers and other data users about its water stewardship journey. With modules 1-3 complete, data users now understand the current state of an organization’s use of water and how water related risks are identified.

An understanding of the number, location and nature of inherent water risks is valuable for disclosing organizations, as well as CDP data users. Module W4 allows organizations to show that they have a clear awareness of the extent to which they are exposed to inherent water risks in their direct operations and other parts of their value chain.

CDP asks organizations to report substantive water-related risks, the potential impacts of those risks and share details of their associated response strategies. We also invite organizations to share any water-related operational or market opportunities being realized that could substantively benefit their business.

The financial related information requested in W4.1, W4.2, and W4.3 may help organizations with their climate-related disclosures in line with the TCFD recommendations. This information helps investors assess the potential impacts to valuations and the adequacy of the organization's risk response.

In module W5, organizations exposed to substantive risk are requested to provide facility-level information.

Note:

Providing information about inherent risk exposure rather than residual risk allows data-users to consider the potential impact and the appropriateness of the organization’s response. Water risk impacts the cost of doing business and may impact on stock volatility.

CDP asks about risks anywhere in your business that are substantive at the corporate level (not those that are significant only at the facility level, for example). We wish only to know about risks that have the ability to impact the business, financially, strategically or otherwise, at the corporate level.

You may wish to consult with your financial, legal, and/or compliance departments for advice on your organization’s general approach to the provision of forward-looking statements and information concerning risks.

Key changes

• Six questions with modified guidance:
  • W4.1b and W4.1c include additional guidance to specify that these questions refer to facilities in direct operations.
  • W4.2b and W4.2c include additional guidance to explain why the potential impacts are considered as not substantive for an organization.
  • W4.3a includes additional guidance to provide an example of the action(s) taken to realize the opportunity.
  • W4.3b includes additional guidance to provide details of the method for assessing opportunities and when the evaluation will be complete.
• Click here for a list of all changes made this year.

Sector-specific content

• W4.1c presents an additional column for Oil & Gas, Metals & Mining, Coal, and Electric utilities.
• Sector specific additions to drop downs in risk tables: Metals & Mining, Coal, Food, Beverage & Tobacco, Agricultural Commodities, and Chemicals.
• Sector specific additions to drop downs in opportunities table: Oil & Gas.

Pathway diagram - questions

This diagram shows the questions contained in module W4. To access question-level guidance, use the menu on the left to navigate to the question.

Risk exposure

(W4.1) Have you identified any inherent water-related risks with the potential to have a substantive financial or strategic impact on your business?

Question dependencies

• Your response to W4.1 will determine which subsequent questions are presented. If your response to W4.1 is amended, data in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions. The guidance for each question indicates if it is a dependent question.

Change from last year

No change

Rationale

Data users wish to know whether your organization has knowledge of any water risks across any part of your value chain that are substantive at the corporate level. This information is critical for guiding investments and actions to improve business resilience and water stewardship.

Note that we only request information on issues that are exposing your facilities, business units etc. to risks that have the potential to substantively impact, strategically as well as financially, on your business at the corporate level.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

Response options

Select one of the following options:

• Yes, both in direct operations and the rest of our value chain
• Yes, only within our direct operations
• Yes, only in our value chain beyond our direct operations
• No

Requested content

General

• Indicate if you have identified any inherent water-related risks, and in which part of your value chain; or select ‘No’ if none have been identified and explain why not (W4.2b and/or W4.2c will be presented).
• For the purposes of this response, the risks considered should only be those which:

- pose potential substantive financial or strategic impacts (as per the definition of “substantive” you provide in W4.1a)
- pose a risk at the corporate level, and not simply at the asset/business unit/geographic level at which they may occur
- are inherent (the risk that exists in the absence of controls, i.e. before taking into account any potential mitigation or management measures that have been or could be implemented).

• These risks may have the potential to impact on your organization either currently or in the future.

Explanation of terms

• Direct operations: An organization’s operations include anything it does itself for the purpose of producing goods and services and maintaining the functionality of the business. This covers any internal supply chains between the organization’s business units. For example, a business unit within a company that supplies components to another business unit within the company would be considered part of the organization’s direct operations.
• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
• Residual risk: The risk remaining after a specific action has been taken to manage the risk.
  
• Substantive impact on the business: An impact that has a considerable or relatively significant effect on an organization at the corporate level. This could include operational, financial or strategic effects that undermine the entire business or part of a business.
  
• Value chain: The entire sequence of activities or partners that provide value to or receive value from an organization’s products and services, either within, upstream or downstream of direct operations.
  
• Water-related risk to the business: The possibility of an organization experiencing a water-related challenge (e.g., water scarcity, water stress, flooding, infrastructure decay, drought) (adapted from the CEO Water Mandate's "Corporate Water Disclosure Guidelines"). The extent of risk is a function of the likelihood of a specific challenge occurring and the severity of the challenge’s impact. The severity of impact depends on the intensity of the challenge, as well as the vulnerability of the organisation.
  

(W4.1a) How does your organization define substantive financial or strategic impact on your business?

Change from last year

No change

Rationale

Explaining your threshold for including risk data in this disclosure provides critical context for CDP data users. What is considered as a substantive impact for a business will be different for each responding company, so before proceeding with any further questions in this module, it is important that companies explain how they define a substantive impact at the corporate level.

Response options

This is an open text question with a limit of 5,000 characters.

Requested content

General

• Describe and quantify, in detail, how your organization defines a ‘substantive impact’ on your business at the corporate level, in the context of a water-related risk.
• What constitutes a substantive impact will vary between companies. For example, a 1% reduction in profits could have a different effect on different companies depending on their respective profit margins. Companies are therefore asked to determine ‘substantive’ in the way that they would use for their business decision-making. For example, a substantive impact of relatively high magnitude could occur because of a large number for any one of the following aspects, or because of a small number for all three combines to create a larger impact:

- the proportion of business units affected
- the size of the impact on those business units
- the dependency of the organization on that unit
- the potential for shareholder or customer concern.

• The description of your definition should make clear the thresholds for:

- the magnitude
- probability
- frequency of the impact
- and how they are applied together.

• Include details of any metrics used and report how often these metrics are reviewed and updated.
• The substantive change may relate, for example, to operations, revenue or expenditure, assets & liabilities, or capital allocation. Examples of substantive change would be: the closure of two strategic facilities for which the probability is over 30%; a reduction of 10% in projected revenue; an unexpected prolonged drop in consumer interest over a busy shopping period.
• Indicate if your definition/thresholds/metrics relate to direct operations and/or other parts of your value chain.
• Note that in this question, we are not requesting:

- information about what is a substantive impact at the level of facilities, business units, etc; only about what is substantive for the company as a whole
- details of the risks your organization is exposed to, but to illustrate your response you should include at least one example of an impact at any level of your organization and why it is considered as substantive to your business.

Explanation of terms

• Substantive impact on the business: an impact that has a considerable or relatively significant effect on an organization at the corporate level. This could include operational, financial or strategic effects that undermine the entire business or part of the business.

(W4.1b) What is the total number of facilities exposed to water risks with the potential to have a substantive financial or strategic impact on your business, and what proportion of your company-wide facilities does this represent?

Question dependencies

• This question only appears if you select any of the following options in response to W4.1:
  • Yes, both in direct operations and the rest of value chain
  • Yes, only within our direct operations
  • Yes, only in our value chain beyond our direct operations

Change from last year

Modified guidance

Rationale

Water is a local issue, and CDP data users want to know that companies are considering risks and impacts at the facility level. Reporting on the total number of facilities that expose your company to substantive risk and the proportion of your facilities that this represents provides a basic but useful indication of risk exposure.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

Response options

Please complete the following table:

Requested content

General

• This question only relates to facilities in your direct operations (not supplier facilities). These facilities could be at risk as a result of water-related risk drivers across your value chain – e.g., if a critical supplier is exposed to water-related risk and the shut-down of that supplier would substantially affect any of your own facilities.
• This question only requests information about facilities exposed to risks with the potential to substantively impact your business at the corporate level (as defined in W4.1a). Do not count local risks unless they are substantive for the organization as a whole.
• Note that you are requested to disclose inherent risks – so include those that your organization is exposed to prior to the implementation of any response strategies.
• For the facilities you report here as being exposed to substantive water risk, W4.1c requests their river basin location.

Total number of facilities exposed to water risk (column 1)

• Defining facility: The term ‘facilities’ may be used broadly to refer to types of business operations as well as fixed buildings or factories. For example, organizations in the extractive industries might normally collate information by asset or business unit and may wish to define facility in this way.
• Aggregating facilities: Organizations may have hundreds of sites, such as in the hotel, construction, or retail industries. They may wish to report facilities by aggregate, rather than individual buildings or sites. For example, a hotel chain may wish to group hotels by grade or resort type. Rather than assessing each of its 20 hotels individually it may be more appropriate to combine 20 hotels within the same river basin into one ‘facility’, and then assessing this against its threshold for substantive change to the business described in W4.1a.
• Note the following on the aggregation of facilities:

- Due to the local nature of water risks and impacts, only facilities in the same river basin and the same jurisdiction may be aggregated. In the case of very large river basins, facilities in a single basin may face different regulatory as well as local physical risks so that aggregation would obscure an understanding of the organization's water dependency and risk exposure in the region.
- Organizations should consider aggregating facilities within a river basin if the corporate-level risk exposure due to a single local facility is not substantive but would be substantive in aggregate with other similar local facilities; for example, where water use in individual facilities is very small and therefore associated risks and impacts are more material at the river basin level, but is significant within the river basin as a whole.
- Aggregation of facilities should not be used where information on the risk exposure, or water accounting data, of the single facility would be meaningful and specific to that facility.

• There is a limit of 1,000 on the total number of facilities that you may report as being at risk. This is because you should only count facilities, or groups of facilities, that expose your organization to substantive risk - according to your definition in W4.1a. If you have more than 1,000 it may be that your definition of substantive risk in question W4.1a is extreme. You should consider aggregating some facilities in line with the above note and use the 'Comment' column to describe the aggregation.

% company-wide facilities this represents (column 2)

• Detail the proportion of your organization’s company-wide facilities exposed to substantive water risk - as represented by the number given in column 1. For example, the 11 facilities that are exposed to substantive water risk reported in column 1 may comprise 26-50% of your organization’s total facilities company-wide. You may estimate this data and use column 3 to state that this is the case.
• If you cannot provide this figure, select “unknown” and explain your response in column 3.

Comment (column 3) (optional)

• You may comment on how you have defined ‘facility’. If your organization does aggregate for reporting purposes, please state that this approach has been taken and briefly describe the methodology for aggregation.
• To help data users understand the number of facilities you have reported, please provide any further context. For example, you may wish to give a general, company-specific comment on the nature, severity and location of the corporate-level risks your company is exposed to, whether they result from any particular business activity, and the relationship between the inherent risk and your residual risk exposure. You may have reported that 60% of your facilities are exposed to inherent risks due to their location, but this represents only a 30% of your total output and the residual risk has been much reduced due to the introduction of new controls. It is helpful to data-users if you give company-specific information.
• Note that river basin level information about facilities at risk should be disclosed in W4.1c.

Explanation of terms

• Facility: “Facilities” may be used throughout this questionnaire as a broad term and not restricted to a particular site or grouping of fixed buildings and factories. For example, if your organization is in the extractive industries you might normally collate business information for assets or business units, and so you may wish to define ‘facility’ information in this way.
• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
  
• Residual risk: The risk remaining after a specific action has been taken to manage the risk.
  

Example response

(W4.1c) By river basin, what is the number and proportion of facilities exposed to water risks that could have a substantive financial or strategic impact on your business, and what is the potential business impact associated with those facilities?

Question Dependencies

• This question only appears if you select any of the following options in response to W4.1:
  • Yes, both in direct operations and the rest of our value chain
  • Yes, only within our direct operations
  • Yes, only in our value chain beyond our direct operations

• Note that W5 will request water accounting data for facilities located in the basins reported here.

Change from last year

Modified guidance; Minor change for CO

Rationale

This information provides a list of hot-spot basins for CDP data users to focus on when reviewing your CDP disclosure and enables a deeper understanding of the potential significance of the water risk exposure associated with each basin.

Knowing the percentage of facilities at risk for each basin and the potential impact of this risk exposure helps companies with decision making based on basin level issues. It allows financial planning at that level to take account of water issues and provides a powerful indicator to support river basin action and investment.

Assigning and understanding the amount of financial productivity that may be at risk from water-related issues in any one basin provides a powerful indicator for any business case for investment in those basins, and the potential significance of the water risk exposure associated with that basin.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

Response options

Please complete the following table. The table is displayed over several rows for readability. You are able to add rows by using the “Add Row” button at the bottom of the table.

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Requested content

• Note: Organizations responding to a metals & mining and/or coal sector request should refer to additional sector-specific guidance on this question at the end of the "Requested content" section.

General

• This question only relates to facilities in your direct operations (not supplier facilities). These facilities could be at risk as a result of water-related risk drivers across your value chain – e.g., if a critical supplier is exposed to water-related risk and the shut-down of that supplier would substantially affect any of your own facilities.
• Consider risks with the potential to substantively impact your business at the corporate level. Do not consider local risks unless they are substantive for the organization as a whole. For example, a business may have 10 facilities in one river basin exposed to water risk, but only three of those might lead to a substantive impact to the business at the corporate level should they materialize. So, it is only those three facilities that should be reported.
• Note that you are requested to disclose inherent risk – so consider risks those that your facilities are exposed to prior to the implementation of any response strategies.
• Module 5 requests water accounting information for all the ‘facilities’ you disclose here as being exposed to substantive water risk.
• If you have facilities exposed to water risks in a basin which covers multiple countries/areas, please add a new row for each country/area and disclose the number of facilities located in that country/area.
• Note that W4.2 and W4.2a ask for details of individual risk drivers, their impact and your response, so any information provided here should relate to the basin level.
• Oil & gas sector only: Data on the organization's production volume associated with these facilities will provide further information on the potential implications of the water risk exposure and assist with the assessment of the company's response.
• Electric utilities sector only: Data on the organization's annual electricity generation associated with these facilities will provide further information on the potential implications of the water risk exposure and assist with the assessment of the company's response.

Country/Area (column 1a)

• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

River basin (column 1b)

• From the drop-down options provided, select the river basin where your facilities are exposed to substantive water risk. If you do not see a basin that applies to your organization, select “Other, please specify” and write in the correct river basin using the text box provided.
• For companies withdrawing water from large confined aquifers that may not discharge to the river basin they are located in e.g. Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source. Ensure that the correct country/area name is selected in column 1a (Country/Area).
• You may want to put the sub-basin of a bigger river basin identified in the drop-down menu. In this case use the “Other, please specify” option in the following format: “Putumayo, Amazon”.
• For full instructions regarding this list, see the Introduction to CDP's water security reporting guidance.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

Number of facilities exposed to water risk (column 2)

• For the selected river basin, indicate the number of facilities exposing your company to a potential substantive impact. This number will have been included in the total figure you reported in W4.1b. We are not asking for the total number of facilities located within each river basin, only those facilities facing a water risk that could generate a substantive change in your business, operations, revenue or expenditure. A business may have 10 facilities in one river basin exposed to water risk. However, if just three of them might lead to a substantive impact to the business at the corporate level, it is only those three facilities that should be reported here.
• The term ‘facilities’ may be used broadly to describe different types of business operations as well as fixed buildings or factories. Please refer to the guidance for W4.1b.
• If you aggregated facilities in W4.1b when providing the total number of facilities that expose your organization to risk, you should apply that identical aggregation in this question so that the total number of facilities entered in column 2 equals the figure you provided in W4.1b and does not exceed 1,000.
• Note that W5.1 will request water accounting and other data for up to 50 facilities reported here.

% company-wide facilities this represents (column 3)

• This column asks for the proportion of your total company facilities represented by the facilities reported in column 2. For example, the 11 facilities reported in column 2 may comprise 6-10% of your organization’s total number of facilities globally.
• If you cannot provide this figure, select “unknown” and explain your response in the last column (Comment).

Electric utilities sector only: % company's annual electricity generation that could be affected by these facilities

• Only select "Not applicable" if no facilities in the basin generate electricity and explain this in the last column (Comment).

Oil & gas sector only: % company's global oil & gas production volume that could be affected by these facilities

• Only select "Not applicable" if no facilities in the basin are associated with your oil & gas sector activities and explain this in the last column (Comment).

% of company’s total global revenue (column 7)

• This column seeks to answer the question: what proportion of your organization’s total global revenue is derived from the facilities listed in column 2? For example, 11 facilities reported in column 2 may deliver 16-30% of your organization’s total global revenue.
• This revenue may be at risk to some extent in the absence of an appropriate response strategy - if the facilities were unable to operate, for example.
• If you cannot provide this figure, please select “unknown”, or you may estimate the figure. Use the last column (Comment) to explain your response.

Comment (column 8) (optional)

• Provide any further context to help data users understand your basin level disclosure. For example, you may wish to comment on the nature or severity of the risk in the river basin as a whole that these facilities are exposed to and the company’s approach to addressing these risks.
• Provide any further details you wish to add about the figure you have provided for the potential value at risk in these river basins. This will provide context for data-users.
• If you have used estimates in any response, please state this.

Explanation of terms

• Revenue: Income arising in the course of an entity's ordinary activities (less discounts, allowances and returns) - before deducting costs for the goods/services sold and operating expenses to arrive at profit (based on the International Financial Reporting Standard).

Example response

Water-related risks and response

(W4.2) Provide details of identified risks in your direct operations with the potential to have a substantive financial or strategic impact on your business, and your response to those risks.

Question Dependencies

• This question only appears if you select one of the following options in response to W4.1:
  • Yes, both in direct operations and the rest of our value chain
  • Yes, only within our direct operations

Change from last year

Minor change

Rationale

Your response to this question will allow CDP data users to see, in one place, details of the inherent water risks that your company is exposed to due to drivers associated with its direct operations within particular river basins, and also the estimated potential impact of the risk at the corporate level and your response strategy to address the risk.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Quantity & Quality-Related Water Risks

CEO Water Mandate

Implications: Business risks

Response options

Please complete the following table. The table is displayed over several rows for readability. You are able to add rows to this table using the "Add row" button at the bottom of the table.

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Primary risk driver (column 2b)

Primary potential impact (column 3)

Primary response to risk (column 13)

Requested content

General

• This question asks about water-related risk drivers associated with your direct operations and their potential to substantively impact your organization, currently or in the future. (W4.2a asks about risk drivers in the rest of your value chain and their potential impact on your organization).
• For the purposes of this response, the risks reported should only be those which:

- Expose your organization to substantive financial or strategic impacts to your business - such as to operations, revenue, or expenditure, assets and liabilities, or capital allocation (as per the definition of ‘substantive’ you provide in W4.1a);
- Pose a risk at the corporate level, and not simply at the asset/business unit/geographic level at which they may occur;
- Are inherent (a risk that exists in the absence of controls, so not taking into account any potential mitigation or management measures that have been or could be implemented).

• Use each row to report a primary risk driver and the potential substantive impact it could cause. If there is more than one impact, please select the primary impact. If there is more than one response to this risk, select the primary response.
• To report additional risk drivers or impacts associated with a basin, you are able to add a new row. Please report no more than 3 risk drivers or impacts per river basin and report the most substantive.

Country/Area (column 1a)

• From the drop-down menu provided, please select the country/area associated with the driver of the risk you are reporting.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

River basin (column 1b)

• From the drop-down menu provided, please select the river basin associated with the driver of the risk you are reporting. If you select “Other, please specify”, provide a label for the river basin.
• For companies withdrawing water from large confined aquifers that may not discharge to the river basin they are located in e.g. Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source. Ensure that the correct country/area name is selected in column 1a (Country/Area).
• You may want to report the sub-basin for a main river basin that is listed. In this case select “Other, please specify” and use the following format: “Putumayo, Amazon”.
• Refer to the instructions in the Introduction to CDP’s water security reporting guidance for more details on how to response to ‘River basin’ columns.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

Type of risk (column 2a)

• Select the type of risk you would like to report. Your selection will determine the list of risk drivers that will appear in column 2b.
• Note that a selection must be made for both column 2a and column 2b. Your data will not be saved if either column is left blank.

Primary risk driver (column 2b)

• The drop-down options presented are linked to the type of risk you selected in column 2a.
• In the case that there may be more than one driver or a chain of causes for the potential substantive impact you are reporting, you should select what you consider to be the primary driver.
• If you do want to choose an additional driver for a river basin, you will need to add another row to report the details. Please refrain from providing more than three drivers per river basin.
• If you select “Other, please specify”, provide a label for the primary risk driver.
• Note that a selection must be made for both column 2a and column 2b. Your data will not be saved if either column is left blank.

Primary potential impact (column 3)

• Select the option that best describes the primary potential impact to your company due to the risk driver reported in column 2b.
• The impact must be substantive at the corporate level as defined in W4.1a.
• If there is more than one potential impact associated with a risk driver, you should select what you consider to be the primary impact and use column 4 to describe the secondary impacts. This could, for example, be increased costs, decreased revenue, or closure of operations. Impacts can be operational or financial and can affect your organization, your consumers or other stakeholders as well as your company.
• If you do want to choose an additional substantive impact for a river basin or a risk driver, you will need to add another row to report the details. Please refrain from providing more than three impacts per river basin.
• If you select “Other, please specify”, provide a label for the type of potential impact.

Company-specific description (column 4)

• Provide further contextual information on the risk driver selected in column 2b, including more detail on its nature and location.
• Include a company-specific description of how the risk driver could impact your organization, including the nature of any secondary impacts. For example: “Our organization has found the increased seasonal water stress in the Limpopo river basin to be a risk with the potential to constrain planned growth in steel production in the region. More immediately, this could lead to periodic suspensions of operations and a substantial financial impact equating to $100,000 a day. Any major delays in production would hinder our ability to meet our contractual agreements with customers and importantly our ability to win new business”.

Timeframe (column 5)

• Select the timeframe in which the inherent risks would be most likely to materialize. It is acknowledged that there is likely to be a higher degree of uncertainty associated with long-term risks. For example, you may consider you company to be at risk due to increasing pollution levels but this is unlikely to impact your business within the next 5 years. In this case you would select ‘4-6 years’.

Magnitude of potential impact (column 6)

• The magnitude describes the extent to which the impact, if it occurred, would affect your business. You should consider the business as a whole. This means that the potential magnitude of the impact can be a combination of the scale of the damage and your organization’s state of resilience prior to responding to the risk.
• Magnitude of impact will vary from company to company. For example:

- Two companies may have identical facilities located on a coast in an area which is vulnerable to flooding. However, if company A relies on that facility for 90% of its production capacity and company B relies on it for only 40% of its production capacity, the magnitude of impact due to the same flooding damage will be comparatively higher on company A than on company B;
- A 1% reduction in profits will have different effects on different companies depending on the profit margins on which they work.

• As it is not possible for CDP to accurately define terms for magnitude of impact, companies are asked to determine and report magnitude using a qualitative 5 point scale from High to Low. Factors to consider when classifying the magnitude of the impact on your organization include:

- The proportion of business units affected;
- The size of the impact on those business units;
- The dependency of the company on those units;
- The potential for shareholder or customer concern.

• An impact could have a relatively high magnitude for the company as a whole because of a large effect in one of these aspects or small effects in all four combining to create a larger impact.
• The magnitude should align with the proportion of global revenue at risk you reported in W4.1c for the river basin associated with the impact (selected in column 1b). For example, if 50% of global revenue could be affected by water risk in the Yellow River basin then the magnitude for a risk reported in the Yellow River basin should align.
• If the financial impact has not been assessed by your organization, please select ‘Unknown’.

Likelihood (column 7)

• Likelihood refers to the probability of the inherent impact occurring within the time frame reported in column 5. In the case of an inherent risk, the probability of the impact might be similar to the probability of the risk event (the risk driver) itself.
• Likelihood along with the magnitude are the building blocks for quantifying and prioritizing risk.
• The terms used to describe likelihood are taken from the Intergovernmental Panel on Climate Change’s (IPCC) 2013 report and are consistent across all CDP information requests.
• As a guide to quantifying likelihood on a % basis, we suggest:

- Virtually certain (greater than 99% probability);
- Very likely (greater than 90% probability);
- Likely (greater than 66% probability);
- More likely than not (greater than 50% probability);
- About as likely as not (between 33% and 66% probability);
- Unlikely (less than 33% probability);
- Very unlikely (less than 10%);
- Exceptionally unlikely (less than 1% probability);
- Unknown.

• For example, you may consider your company to be potentially exposed to a risk of water rationing in the next ‘4-6 years’ which would cause an impact of high magnitude - but the risk is not considered very likely to materialize. You would select ‘unlikely’. Alternatively, if the risk related to a piece of new legislation which has already been prepared in draft form, the likelihood of the impact associated with that risk occurring will be relatively high and you would select ‘very likely’.

Are you able to provide a potential financial impact figure? (column 8)

• Your selection will determine whether column 9 or columns 10 and 11 will be presented.
• It is acknowledged that these figures will be estimates.
• If you are unable to provide a figure for a financial impact, you may use column 12 (‘Explanation of financial impact’) to provide a description of the impact in relative terms; for example, as a percentage relative to a stated or publicly available figure, or give a qualitative estimate of the financial impact.

Potential financial impact figure (currency) (column 9)

• Provide a single figure for the inherent financial impact of the risk (before taking into consideration any controls you may have in place to mitigate the impacts). This figure should be in the same currency that you selected in question W0.4 for all financial information disclosed throughout your response.
• An example would be the value of stranded assets or the value lost due to halted production (before taking into consideration any insurance coverage that might compensate you).

Potential financial impact figure - minimum/maximum (currency) (columns 10, 11)

• Provide the estimated range for the inherent financial impact (before taking into consideration any controls you may have in place to mitigate the impact).This figure should be in the same currency that you selected in question W0.4 for all financial information disclosed throughout your response.
• Potential financial impact figure - minimum (currency) use this field to report the lower point of your estimated financial impact associate with the risk. For example, if the range is from US $5,000 to $50,000, ‘5,000’ should be reported here.
• Potential financial impact figure - maximum (currency) use this field to report the upper point of your estimated financial impact associate with the risk. For example, if the range is from US $5,000 to $50,000, ‘50,000’ should be reported here.

Explanation of financial impact (column 12)

• Use this field to explain the figure(s) provided in 'Potential financial impact' (columns 9, 10, 11).
• Describe how you arrived at this figure (or range), including:

- What approach was employed to calculate the figure;
- Any assumptions the figure is dependent on;
- The likely timescale for the financial impact.

• If 'We do not have this figure' was selected in column 8, use this column to provide a description of the financial impact in the relative terms (for example as a percentage relative to a stated or publicly available figure) or give a qualitative estimate of the financial impact. Otherwise, if you have no information about the financial impact, please state “The impact has not been quantified financially”.

Primary response to risk (column 13)

• Select the response strategy that most closely describes how your organization expects to respond to the reported risk. If there is no appropriate response strategy for your organization included in the list, please select “Other, please specify” and add your own response label.
• If you select “Other, please specify”, provide a label for the primary response to risk.

Description of response (column 14)

• Provide additional details of your organization’s response to mitigate, control, transfer or accept the risk associated with the driver reported in this row. You may include any secondary response strategies.
• Include the timeframe expected for the response strategy to be implemented. Is the response underway, not yet implemented, or completed? What is the projected progress for lowering risidual risk?
• Describe the difference the response has made/is likely to make. This may include:

- How effective the response has been/is expected to be in preventing the inherent risk driver reoccurring, or for improving your organization’s resilience at the asset or corporate level, so preventing future financial, operational or strategic impacts;
- Whether water security for your company is likely to improve as a result, at either the asset or corporate level;
- Whether water security for other users is likely to improve as a result;
- Whether the response contributes to the progress of other UN Sustainable Development Goals;
- Whether the response strategy involves any collective action initiatives.

• Report whether the response strategy involves any collective action initiatives, or if it contributes to the progress of a UN Sustainable Development Goal.
• State how the risks have influenced your strategic and/or financial planning.
• Your public response to this question may be shared with the Water Action Hub, which works to promote water stewardship knowledge sharing and collaboration. Before submitting your disclosure to CDP, you will be requested to indicate your permission for CDP to share contact details. This enables the Hub to contact you about a project suitable for sharing on their platform and obtain your consent. This is optional.

In this question, we ask that you provide as much information about your response as possible, particularly local projects, including:

- Who else is involved in the joint project /initiative (such as names of organizations or government offices) or who you would like to work with (government agencies, other companies, NGOs, etc.);
- The geographic or other scale of the project;
- What the project seeks to accomplish including expected benefits for the watershed beyond the company;
- When the project started and if it has concluded or if it is continuing;
- If possible, the specific location of the project.

Note that these criteria are not scored but are crucial to building a project to share in the Water Action Hub and without this detail the project may not be suitable to transfer to this platform.

Cost of response (column 15)

• Provide a quantitative figure for the cost of your risk response actions. If there are no costs to responding to the risk, enter '0'. If the value you have reported is an estimate, please state this in column 16 (Explanation of cost of response).
• If you cannot provide an absolute value, you may use column 16 to provide a percentage value.
• This figure should be in the same currency that you selected for all financial information disclosed throughout your response in question W0.4.

Explanation of cost of response (column 16)

• Use this field to explain the figure provided in column 15. Please describe how you derived this figure, including:

- What approach was taken to arriving at the cost of your response strategy;
- If it is an estimate;
- Any assumptions the figure is dependent on;
- The likely timescale for the cost of response.

• In case no figure is provided in column 15, provide a description of the cost in relative terms or give a qualitative estimate of the cost of the response. Otherwise, if you have no information about the financial impact, please write “cost of response not quantified at corporate level".

Explanation of terms

• Direct operations: An organization’s operations include anything it does itself for the purpose of producing goods and services and maintaining the functionality of the business. This covers any internal supply chains between the organization’s business units. For example, a business unit within a company that supplies components to another business unit within the company would be considered part of the organization’s direct operations.
• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
  
• Physical risk: Risk driven by water stress or scarcity (too little water), flooding (too much water) or pollution (lower water quality). Disruption in water supply or decline in water quality can adversely affect operations where water is used for production, irrigation, material processing, cooling, washing and cleaning, and personal consumption. Physical risks can adversely affect production or cause damage to physical assets.
  • Acute physical risk: Risk that is event-driven, including increased severity of extreme weather events, such as cyclones, hurricanes, or floods (adapted from the Recommendations of the Task Force for Climate-related Financial Disclosures, 2017).
  • Chronic physical risk: Risk driven by long-term changes, such as rising sea levels, changing precipitation patterns and types, or declining water quality (adapted from the Recommendations of the Task Force for Climate-related Financial Disclosures, 2017).

- Note that weather events such as snow, or physical events such as high tide or earthquakes, are not a water risks in themselves but may cause water risks. If snow or earthquakes cause flooding, then it is the flooding that is the water risk and should be reported as such. However, snow, high tide and earthquakes could be considered water risks if they could cause predictable disruption to water supply or have groundwater impacts. For example, if heavy snow on property is common it could cause pollution release incidents when it melts if not managed properly.

• Regulatory risk: Risks driven by an expected or unexpected change or uncertainty, in law or regulation that may have direct or indirect impacts on a company. A change in law or regulation can increase the costs of operating a business, reduce the attractiveness of an investment, or change the competitive landscape in which a company operates. Water regulatory measures may include, among others, new water permit structures, rate changes to control withdrawals and discharge, redistribution of water to various users, and restrictions on pollutant types and levels.
• Reputational risk: Risk driven by litigation, product risks due to changes in consumer behavior, and risks that may impact decisions made by investors, consumers and current/potential employees concerning a company.
• Residual risk: The risk remaining after a specific action has been taken to manage the risk.
• Risk driver: The factor/ driving force that could cause the potential impact. Risk drivers are typically physical (e.g. weather extreme events), regulatory, reputational and markets related, or technological.
• Soil degradation: Degradation of the topsoil quality related to soil loss from erosion processes of degradation from the nutrient loss or salinization.
• Technological risk: Risk driven by technological improvements or innovations; for example, those that support water security or the transition to a lower-carbon, energy-efficient economic system.
• Water scarcity: Refers to the volumetric abundance, or lack thereof, of freshwater resources. Scarcity is human driven; it is a function of the volume of human water consumption relative to the volume of water resources in a given area. As such, an arid region with very little water, but no human water consumption would not be considered scarce, but rather “arid.” Water scarcity is a physical, objective reality that can be measured consistently across regions and over time. Water scarcity reflects the physical abundance of freshwater rather than whether that water is suitable for use. For instance, a region may have abundant water resources (and thus not be considered water scarce), but have such severe pollution that those supplies are unfit for human or ecological uses.

Example response

(W4.2a) Provide details of risks identified within your value chain (beyond direct operations) with the potential to have a substantive financial or strategic impact on your business, and your response to those risks.

Question Dependencies

• This question only appears if you select one of the following options in response to W4.1:
  • Yes, both in direct operations and the rest of our value chain
  • Yes, only in our value chain beyond our direct operations

Change from last year

Minor change

Rationale

Your response to this question will allow CDP data users to see, in one place, details of the inherent water risks that your company is exposed to due to drivers associated with its value chain within particular river basins, and also the estimated potential impact of the risk at the corporate level and your response strategy to address the risk.

Connection to other frameworks

S&P Global Corporate Sustainability Assessment

Quantity & Quality-Related Water Risks

Exposure of Suppliers to Water Risks

Water Risks Management of Suppliers

Supply Chain Risk Exposure

CEO Water Mandate

Implications: Business risks

Response options

Please complete the following table. The table is displayed over several rows for readability. You are able to add rows to this table using the "Add row" button at the bottom of the table.

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Primary risk driver (column 3b)

Primary potential impact (column 4)

Primary response to risk (column 14)

Requested content

General

• This question asks about risk drivers associated with your value chain beyond your direct operations. Consider which risks drivers have the potential to substantively impact your organization at the corporate level, either currently or in the future, and what the response has been. (W4.2 asks about water-related risk drivers in your direct operations.).
• For the purposes of this response, the risks reported should only be those which:

- Expose your organization to substantive financial or strategic impacts to your business - such as to operations, revenue, or expenditure, assets and liabilities, or capital allocation (as per the definition of “substantive” you provide in W4.1a);
- Pose a risk at the corporate level, and not simply at the asset/business unit/geographic level at which they may occur;
- Are inherent (a risk that exists in the absence of controls, so not taking into account any potential mitigation or management measures that have been or could be implemented).

• Use each row to report a primary risk driver and the potential substantive impact it could cause. If there is more than one impact, please select the primary impact. If there is more than one response to this risk, select the primary response.
• To report additional risk drivers or impacts associated with a basin, you are able to add a new row. Please report no more than 3 risk drivers or impacts per river basin and report the most substantive.

Country/Area (column 1a)

• From the drop-down menu provided, please select the country/area associated with the driver of the risk you are reporting.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

River basin (column 1b)

• From the drop-down options provided, select the river basin associated with the driver of the risk you are reporting. If you select “Other, please specify”, provide a label for the river basin.
• For companies withdrawing water from large confined aquifers that may not discharge to the river basin they are located in e.g. Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source. Ensure that the correct country/area name is selected in column 1a (Country/Area).
• You may want to report the sub-basin for a main river basin that is listed. In this case select “Other, please specify” and use the following format: “Putumayo, Amazon”.
• Refer to the instructions in the Introduction to CDP’s water security reporting guidance for more details on how to response to ‘River basin’ columns.
• Note that a selection must be made for both column 1a and column 1b. Your data will not be saved if either column is left blank.

Stage of value chain (column 2)

• Select the stage of the value chain where you have identified a risk with the potential to impact your business either currently or in the future.
• If you select “Other, please specify”, provide a label for the stage of value chain.

Type of risk (column 3a)

• Select the type of risk you would like to report. Your selection will determine the list of risk drivers that will appear in column 3b.
• Note that a selection must be made for both column 3a and column 3b. Your data will not be saved if either column is left blank.

Primary risk driver (column 3b)

• The drop-down options presented are linked to the type of risk you selected in column 3a.
• In the case that there may be more than one driver or a chain of causes for the potential substantive impact, you should select what you consider to be the primary driver.
• If you do want to choose an additional driver for a river basin, you will need to add another row to report the details. Please refrain from providing more than three risk drivers per river basin.
• If you select “Other, please specify”, provide a label for the primary risk driver.
• Note that a selection must be made for both column 3a and column 3b. Your data will not be saved if either column is left blank.

Primary potential impact (column 4)

• Select the option that best describes the primary potential impact to your company due to the risk driver reported in column 3b.
• The impact must be substantive at the corporate level as defined in W4.1a.
• If there is more than one potential impact associated with a risk driver, you should select what you consider to be the primary impact and describe the secondary impacts in column 5. This could, for example, be increased costs, decreased revenue, or closure of operations. Impacts can be operational or financial and can affect your organization, your consumers or other stakeholders as well as your company.
• If you do want to choose an additional substantive impact for a river basin or a risk driver, you will need to add another row to report the details. Please refrain from providing more than three impacts per river basin.
• If you select “Other, please specify”, provide a label for the stage of type of potential impact.

Company-specific description (column 5)

• Provide further contextual information on the risk driver selected in column 3b, including more detail on its nature and location.
• Include a company-specific description of how the risk driver will impact your organization, including the nature of any secondary impacts.

Timeframe (column 6)

• Select the timeframe in which the inherent risks would be most likely to materialize. It is acknowledged that there is likely to be a higher degree of uncertainty associated with long-term risks. For example, you may consider you company to be at risk due to increasing pollution levels but this is unlikely to impact your business within the next 5 years. In this case you would select ‘4-6 years’.

Magnitude of potential impact (column 7)

• The magnitude describes the extent to which the impact, if it occurred, would affect your business. You should consider the business as a whole. This means that the potential magnitude of the impact can be a combination of the scale of the damage and your organization’s state of resilience prior to responding to the risk.
• Magnitude of impact will vary from company to company. For example:

- Two companies may have identical facilities located on a coast in an area which is vulnerable to flooding. However, if company A relies on that facility for 90% of its production capacity and company B relies on it for only 40% of its production capacity, the magnitude of impact due to the same flooding damage will be comparatively higher on company A than on company B;
- A 1% reduction in profits will have different effects on different companies depending on the profit margins on which they work.

• As it is not possible for CDP to accurately define terms for magnitude of impact, companies are asked to determine and report magnitude using a qualitative 5 point scale from High to Low. Factors to consider when classifying the magnitude of the impact on your organization include:

- The proportion of business units affected;
- The size of the impact on those business units;
- The dependency of the company on those units;
- The potential for shareholder or customer concern.

• An impact could have a relatively high magnitude for the company as a whole because of a large effect in one of these aspects or small effects in all four combining to create a larger impact.
• The magnitude should align with the proportion of global revenue at risk you reported in W4.1c for the river basin associated with the impact (selected in column 1b). For example, if 50% of global revenue could be affected by water risk in the Yellow River basin then the magnitude for a risk reported in the Yellow River basin should align.
• If the financial impact has not been assessed by your organization, please select ‘Unknown’.

Likelihood (column 8)

• Likelihood refers to the probability of the impact occurring within the time frame reported in column 6. In the case of an inherent risk, the probability of the impact might be similar to the probability of the risk event (the risk driver) itself.
• Likelihood along with the magnitude are the building blocks for quantifying and prioritizing risk.
• The terms used to describe likelihood are taken from the Intergovernmental Panel on Climate Change’s (IPCC) 2013 report and are consistent across all CDP information requests.
• As a guide to quantifying likelihood on a % basis, we suggest:

- Virtually certain (greater than 99% probability);
- Very likely (greater than 90% probability);
- Likely (greater than 66% probability);
- More likely than not (greater than 50% probability);
- About as likely as not (between 33% and 66% probability);
- Unlikely (less than 33% probability);
- Very unlikely (less than 10%);
- Exceptionally unlikely (less than 1% probability);
- Unknown.

• For example, you may consider your company to be potentially exposed to a risk of water rationing in the next ‘4-6 years’ which would cause an impact of high magnitude - but the risk is not considered very likely to materialize. You would select ‘unlikely’. Alternatively, if the risk related to a piece of new legislation which has already been prepared in draft form, the likelihood of the impact associated with that risk occurring will be relatively high and you would select ‘very likely’.

Are you able to provide a potential financial impact figure? (column 9)

• Your selection will determine whether column 10 or columns 11 and 12 will be presented.
• It is acknowledged that these figures will be estimates.
• If you are unable to provide a figure for a financial impact, you may use column 13 (‘Explanation of financial impact’) to provide a description of the impact in relative terms; for example, as a percentage relative to a stated or publicly available figure, or give a qualitative estimate of the financial impact.

Potential financial impact figure (currency) (column 10)

• Provide a single figure for the inherent financial impact of the risk (before taking into consideration any controls you may have in place to mitigate the impacts). This figure should be in the same currency that you selected in question W0.4 for all financial information disclosed throughout your response.
• An example would be the value of stranded assets or the value lost due to halted production (before taking into consideration any insurance coverage that might compensate you).

Potential financial impact figure - minimum/maximum (currency) (columns 11, 12)

• Provide the estimated range for the inherent financial impact (before taking into consideration any controls you may have in place to mitigate the impact).This figure should be in the same currency that you selected in question W0.4 for all financial information disclosed throughout your response.
• Potential financial impact figure - minimum (currency) use this field to report the lower point of your estimated financial impact associate with the risk. For example, if the range is from US $5,000 to $50,000, ‘5,000’ should be reported here.
• Potential financial impact figure - maximum (currency) use this field to report the upper point of your estimated financial impact associate with the risk. For example, if the range is from US $5,000 to $50,000, ‘50,000’ should be reported here.

Explanation of financial impact (column 13)

• Use this field to explain the figure(s) provided in 'Potential financial impact' (columns 10, 11, 12).
• Describe how you arrived at this figure (or range), including:

- What approach was employed to calculate the figure;
- Any assumptions the figure is dependent on;
- The likely timescale for the financial impact.

• If 'We do not have this figure' was selected in column 9, use this column to provide a description of the financial impact in the relative terms (for example as a percentage relative to a stated or publicly available figure) or give a qualitative estimate of the financial impact. Otherwise, if you have no information about the financial impact, please state “The impact has not been quantified financially”.

Primary response to risk (column 14)

• Select the response strategy that most closely describes how your organization expects to respond to the reported risk. If there is no appropriate response strategy for your organization included in the list, please select “Other, please specify” and add your own response label.
• If you select “Other, please specify”, provide a label for the primary response to risk.
• Note that you will be required to make two selections for this column. One for the risk response type and one for the primary response to risk. Your data will not be saved if one selection is left blank.

Description of response (column 15)

• Provide additional details of your organization’s response to mitigate, control, transfer or accept the risk associated with the driver reported in this row. You may include any secondary response strategies.
• Include the timeframe expected for the response strategy to be implemented. Is the response underway, not yet implemented, or completed? What is the projected progress for lowering residual risk?
• Describe the difference the response has made/is likely to make. This may include:

- How effective the response has been/is expected to be in preventing the inherent risk driver reoccurring, or for improving your organization’s resilience at the asset or corporate level, so preventing future financial, operational or strategic impacts;
- Whether water security for your company is likely to improve as a result, at either the asset or corporate level;
- Whether water security for other users is likely to improve as a result;
- Whether the response contributes to the progress of other UN Sustainable Development Goals;
- Whether the response strategy involves any collective action initiatives.

• Report whether the response strategy involves any collective action initiatives, or if it contributes to the progress of a UN Sustainable Development Goal.
• State how the risks have influenced your strategic and/or financial planning.
• Your public response to this question may be shared with the Water Action Hub, which works to promote water stewardship knowledge sharing and collaboration. Before submitting your disclosure to CDP, you will be requested to indicate your permission for CDP to share contact details. This enables the Hub to contact you about a project suitable for sharing on their platform and obtain your consent. This is optional.
  In this question, we ask that you provide as much information about your response as possible, particularly local projects, including:

- Who else is involved in the joint project /initiative (such as names of organizations or government offices) or who you would like to work with (government agencies, other companies, NGOs, etc.);
- The geographic or other scale of the project;
- What the project seeks to accomplish including expected benefits for the watershed beyond the company;
- When the project started and if it has concluded or if it is continuing;
- If possible, the specific location of the project.

Note that these criteria are not scored but are crucial to building a project to share in the Water Action Hub and without this detail the project may not be suitable to transfer to this platform.

Cost of response (column 16)

• Provide a quantitative figure for the cost of your risk response and management actions. If there are no costs to responding to and managing the risk, enter '0'. If the value you have reported is an estimate, please state this in column 17 (Explanation of cost of response).
• If you cannot provide an absolute value, you may use column 17 to provide a percentage value.
• This figure should be in the same currency that you selected for all financial information disclosed throughout your response in question W0.4.

Explanation of cost of response (column 17)

• Use this field to explain the figure provided in column 16. Please describe how you derived this figure, including:

- What approach was taken to arriving at the cost of your response strategy;
- If it is an estimate;
- Any assumptions the figure is dependent on;
- The likely timescale for the cost of response.

• In case no figure is provided in column 16, provide a description of the cost in relative terms or give a qualitative estimate of the cost of the response. Otherwise, if you have no information about the financial impact, please write “cost of response not quantified at corporate level".

Explanation of terms

• Inherent risk: The risk that exists in the absence of controls, i.e. not taking into account any potential mitigation or management measures that could be implemented.
• Physical risk: Risk driven by water stress or scarcity (too little water), flooding (too much water) or pollution (lower water quality). Disruption in water supply or decline in water quality can adversely affect operations where water is used for production, irrigation, material processing, cooling, washing and cleaning, and personal consumption. Physical risks can adversely affect production or cause damage to physical assets.

- Note that weather events such as snow, or physical events such as high tide or earthquakes, are not a water risks in themselves but may cause water risks. If snow or earthquakes cause flooding, then it is the flooding that is the water risk and should be reported as such. However, snow, high tide and earthquakes could be considered water risks if they could cause predictable disruption to water supply or have groundwater impacts. For example, if heavy snow on property is common it could cause pollution release incidents when it melts if not managed properly.

• Regulatory risk: Risks driven by an expected or unexpected change or uncertainty, in law or regulation that may have direct or indirect impacts on a company. A change in law or regulation can increase the costs of operating a business, reduce the attractiveness of an investment, or change the competitive landscape in which a company operates. Water regulatory measures may include, among others, new water permit structures, rate changes to control withdrawals and discharge, redistribution of water to various users, and restrictions on pollutant types and levels.
• Reputational risk: Risk driven by litigation, product risks due to changes in consumer behavior, and risks that may impact decisions made by investors, consumers and current/potential employees concerning a company.
• Residual risk: The risk remaining after a specific action has been taken to manage the risk.
• Risk driver: The factor/ driving force that could cause the potential impact. Risk drivers are typically physical (e.g. weather extreme events), regulatory, reputational and markets related, or technological.
• Technological risk: Risk driven by technological improvements or innovations; for example, those that support water security or the transition to a lower-carbon, energy-efficient economic system.
• Soil degradation: degradation of the topsoil quality related to soil loss from erosion processes of degradation from the nutrient loss or salinization.
• Value chain (beyond direct operations): The sequence of activities or partners, either upstream or downstream of direct operations, that provide value to or receive value from an organization’s products and services; for example, suppliers, product users and franchisees.
• Water scarcity: Refers to the volumetric abundance, or lack thereof, of freshwater resources. Scarcity is human driven; it is a function of the volume of human water consumption relative to the volume of water resources in a given area. As such, an arid region with very little water, but no human water consumption would not be considered scarce, but rather “arid.” Water scarcity is a physical, objective reality that can be measured consistently across regions and over time. Water scarcity reflects the physical abundance of freshwater rather than whether that water is suitable for use. For instance, a region may have abundant water resources (and thus not be considered water scarce), but have such severe pollution that those supplies are unfit for human or ecological uses.

(W4.2b) Why does your organization not consider itself exposed to water risks in its direct operations with the potential to have a substantive financial or strategic impact?

Question Dependencies

• This question only appears if you select “No” or “Yes, only in our value chain beyond our direct operations” in response to W4.1.

Change from last year

Modified guidance

Rationale

A risk assessment may identify no substantive water-related risks. This conclusion is important to disclose and explain. Knowing why your organization has concluded that it is not exposed to risks is crucial for data users to understand your business. This is especially relevant if you responded to W1.1 by rating water as important to your direct operations.

Response options

Please complete the following table:

Requested content

Primary reason (column 1)

• Choose the option that best explains why your organization does not consider itself exposed to any water-related risks in your direct operations with the potential to have a substantive financial or strategic impact on your business - given your own definition of substantive reported in W4.1a.
• If none of the reasons listed are applicable, select "Other, please specify" and fill in the text box with the appropriate reason.

Please explain (column 2)

• If relevant to your selection in column 1:
  • Explain why the risks and anticipated impacts are not substantive to your organization, including examples; or
  • Briefly describe the evaluation process that is in progress, mention the risks included (with examples), and indicate when the evaluation will be complete; or
  • Explain why you have not yet conducted a risk assessment.

(W4.2c) Why does your organization not consider itself exposed to water risks in its value chain (beyond direct operations) with the potential to have a substantive financial or strategic impact?

Question dependencies

• This question only appears if you select “No” or “Yes, only within our direct operations” in response to W4.1.

Change from last year

Modified guidance

Rationale

A risk assessment may identify no substantive water-related risks. This conclusion is important to disclose and explain. Knowing why your organization has concluded that it is not exposed to risks is crucial for data users to understand your business. This is especially relevant if you responded to W1.1 by rating water as important to your value chain.

Response options

Please complete the following table:

Requested content

Primary reason (column 1)

• Choose the option that best explains why your organization does not consider itself exposed to any water-related risks anywhere in your value chain (beyond direct operations) with the potential to have a substantive financial or strategic impact on your business - given your own definition of substantive reported in W4.1a.
• If none of the reasons listed are applicable, select "Other, please specify" and fill in the text box with the appropriate reason.

Please explain (column 2)

• If relevant to your selection in column 1:
  • Explain why the risks and anticipated impacts are not substantive to your organization, including examples; or
  • Briefly describe the evaluation process that is in progress for your value chain, mention the risks included (with examples), and indicate when the evaluation will be complete; or
  • Explain why you have not yet conducted a risk assessment.

Water-related opportunities

(W4.3) Have you identified any water-related opportunities with the potential to have a substantive financial or strategic impact on your business?

Question dependencies

• Your response to W4.3 will determine which subsequent questions are presented. If your response to W4.3 is amended, data in those dependent questions may be erased. In this case, be sure to re-enter data for all relevant questions. The guidance for each question indicates if it is a dependent question.

Change from last year

No change

Rationale

Changes in water management, availability, climatic conditions and other physical, market or regulatory developments related to water may pose commercial or other opportunities to some companies. CDP data users are interested in understanding how companies are approaching and capitalizing on potential water-related opportunities, especially those with market significance and financial value.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

Implications: Business opportunities

Response options

Select one of the following options:

• Yes, we have identified opportunities, and some/all are being realized
• Yes, we have identified opportunities but are unable to realize them
• No

Requested content

General

• Consider whether your organization has identified water-related opportunities that could have a substantive impact on your business at the corporate level. Also consider whether or not the opportunities are being realized.
• Select one of the ‘Yes’ options if water presents a strategic, operational or market opportunity that is substantively benefiting, or has the potential to substantively benefit, your organization.
• The opportunities may:

- be commercial or operational in nature
- be driven at the asset, business unit, geographic or other level
- bring direct financial benefits
- bring other kinds of benefits, such as policy influence, strengthening of reputation, or reduced environmental impact
- also be of benefit to other water users; for example through stewardship or collective action programs that address shared risks or aim to secure water for all.

• Select ‘Yes, we have identified opportunities, and some/all are being realized’ if your organization has taken action to pursue any substantive opportunities. More details will be requested in W4.3a.
• Select ‘Yes, we have identified opportunities but are unable to realize them’ if your organization has not taken action to pursue any substantive opportunities. More details will be requested in W4.3b.
• Only select ‘No’ if you have not identified any substantive opportunities.

Explanation of terms

• Substantive impact on the business: An impact that has a considerable or relatively significant effect on an organization at the corporate level. This could include an operational, financial or strategic effect on the entire business or part of a business

(W4.3a) Provide details of opportunities currently being realized that could have a substantive financial or strategic impact on your business.

Question dependencies

• This question only appears if you select “Yes, we have identified opportunities, and some/all are being realized” in response to question W4.3.

Change from last year

Modified guidance

Rationale

Investors and data users are interested to know if you are realizing the opportunities stemming from changes in water availability, climatic conditions, and other water-related developments and their potential financial impact. Details related to these opportunities can be important when evaluating businesses' plans and environmental strategies.

Connection to other frameworks

CEO Water Mandate

Implications: Business risks

SDG

Goal 6: Clean water and sanitation

Response options

Please complete the following table. You are able to add rows by using the “Add Row” button at the bottom of the table.

(*column/row appearance is dependent on selections in this or other questions)

[Add Row]

Primary water-related opportunity (column 2)

Requested content

General

• For the purposes of this response, the opportunities reported should only be those which currently or potentially have a positive substantive impact on your business at the corporate level, directly or indirectly.
• You should only report opportunities which you are currently taking action to realize.
• The opportunities may:

- Be commercial or operational in nature;
- Be driven at the asset, business unit, geographic or other level;
- Bring direct financial benefits;
- Bring other kinds of benefits, such as policy influence, strengthening of reputation, or reduced environmental impact;
- Also be of benefit to other water users; for example through stewardship or collective action programs that address shared risks or aim to secure water for all.

Type of opportunity/Primary water-related opportunity (columns 1, 2)

• The drop-down options presented in column 2 depend on the type of opportunity you selected in column 1.
• If you select “Other, please specify”, provide a label for the primary water-related opportunity.
• Other examples of opportunity types are provided in the Additional Information row.

Company-specific description & strategy to realize opportunity (column 3)

• Include details of the opportunity:

- A description of the actual or anticipated positive benefit for your organization;
- Where in the organization the benefit applies, e.g. - company-wide, to a certain location, geographic scale, business line, stage of your value chain, or with a particular product or service;
- What is driving the opportunity and where in the organization the opportunity originates, e.g. - company-wide, to a certain location, geographic scale, business line, stage of your value chain, or with a particular product or service;
- An explanation of why this opportunity is considered strategic for the company and how it has influenced your overall strategic and/or financial planning.
- An example of the action(s) taken to realize the opportunity, with reference to their outcome (expected or actual) and timescale of implementation.

• Describe how you have defined ‘substantive’ impact in the context of an opportunity, and reference the definition of substantive impact you gave in W4.1a if applicable.
• With reference to your organization specifically, describe the strategy your organization has in place to take advantage of the opportunities and include an example of the strategy in action, if possible. Actions might include, for example, developing new product lines to address water challenges or increased demand for certain product lines due to changing consumer attitudes; or strengthening catchment relationships in order to realize a collective action opportunity.

Estimated timeframe for realization (column 4)

• This refers to the estimated timeframe it will take to realize the opportunity from the current reporting year. Your organization may have already begun work in previous years to realize this opportunity.

Magnitude of potential financial impact (column 5)

• Indicate your understanding of the magnitude of the financial benefit that has arisen or will arise due to this opportunity. Your response should be in terms of your entire organization, rather than a local asset/business unit/geography.
• This is an estimate of the inherent potential financial benefit of the opportunities i.e. before taking into consideration any processes you may have in place to capitalize on the opportunity.
• The ‘magnitude’ of the potential benefit arising from a financial value will vary in scale and metric from company to company, so it is not possible for CDP to accurately define the listed terms for magnitude. For example, two companies may report a potential financial impact figure of $500,000. For company A this could represent a 1% increase in profits, but a 15% increase in revenue for company B.
• For this reason, companies are asked to determine and report magnitude using a qualitative 5-point scale from High to Low, and then give more details in column 7.
• If the financial impact has not been assessed by your organization, please select ‘Unknown’.

Are you able to provide a potential financial impact figure? (column 6)

• Your selection will determine whether column 7 or columns 8 and 9 will be presented.
• It is acknowledged that these will be estimates and, where possible, assumptions made in arriving at a financial impact figure should be stated column 10.
• If you are unable to provide a figure for a financial impact, you may use column 10 ('Explanation of potential financial impact') to provide a description of the impact in relative terms; for example, as a percentage relative to a stated or publicly available figure, or give a qualitative estimate of the financial impact.

Potential financial impact figure (currency) (column 7)

• Provide a single figure for the financial impact of the opportunity. This figure should be in the same currency that you selected in question W0.4 for all financial information disclosed throughout your response.

Potential financial impact figure - minimum/maximum (currency) (columns 8, 9)

• Provide the estimated range for the financial impact of the opportunity. This figure should be in the same currency that you selected in question W0.4 for all financial information disclosed throughout your response.
• Potential financial impact figure - minimum (currency) use this field to report the lower point of your estimated financial impact associated with the risk. For example, if the range is from US $5,000 to $50,000, ‘5,000’ should be reported here.
• Potential financial impact figure - maximum (currency) use this field to report the upper point of your estimated financial impact associated with the risk. For example, if the range is from US $5,000 to $50,000, ‘50,000’ should be reported here.

Explanation of potential financial impact figure (column 10)

• Comment on your selection in column 5, how you arrive at that assessment of magnitude and the assumptions made in calculating the financial figure(s) provided in 'Potential financial impacts' (columns 7, 8, 9).
• Include any further information with regards to the information provided, including for example the geographic scale associated with the potential financial impact.
• If 'We do not have this figure' was selected in column 6, use this column to provide a description of the financial impact in relative terms (for example as a percentage relative to a stated or publicly available figure) or give a qualitative estimate of the financial impact. Otherwise, if you have no information about the financial impact, please state 'The impact has not been quantified financially'.

Example response

Additional information

Examples of opportunities:

Efficiency

• Cost savings: Reducing water use through water efficiency, recycling or re-use of wastewater, may provide savings by reducing energy use, water bills or the need for discharge permits.
• Improved water efficiency: Reducing water use through improving process and/or procedures. Improved water efficiency can lead to cost savings, increased brand value, or the creation of a new product or service. Efficiency gains are consistently set as targets for large corporations and can be used across different sectors as a relative measure of water use.

Resilience

• Climate change resilience: Investing in solving water-related challenges such as poor water infrastructure, implementing flood risk strategies or catchment restoration for example, may have the dual purpose of sustaining important operational inputs such as water supply or product distribution as well as ensuring resilience against climate change.
• Collective action: By engaging with other water users in local catchments or working with policy makers for example, business may share in the value created from tackling difficult local water challenges in a collective manner.This is an opportunity to influence how water is used locally and help ensure the sustainability of business locally in the face of water challenges such as increasing water scarcity.
• Ensuring supply chain resilience: Water challenges may provide greater impetus to invest in ensuring supply chain resilience ensuring the long-term resilience of current and future growth strategies.

Products and services

• Sales of new products and services: Local water issues in certain markets e.g. poor water quality in China, may create greater demand for new products e.g. domestic water filters. Designing new products or services in response to increasing water challenges.
• Research & Development (R&D): Water challenges may provide greater impetus to fund specific research areas.
• Improved community relations: By being transparent about water use and engaging with the local community to understand and alleviate concerns about water issues, a business may maintain their social licence to operate and possibly grow their business in the future locally.

Markets

• Stronger competitive advantage: By investing in solving water-related challenges or water-related innovation, may put some businesses ahead of their competitors or help capture greater market share.
• Stronger competitive advantage: The introduction of new standards, for example, for water use and quality of effluent discharged, can provide a competitive advantage to those organizations well prepared to quickly implement changes.
• Increased brand value: By associating a company’s brand in a positive way with consumer interest in local water issues, a company might accrue increased brand value. For example, by selling products that promote water-efficiency in water-scarce regions, consumer confidence may grow in a brand and prompt consumers to buy other products from the same brand. This might provide a commercial advantage over a competitor, increasing market share or helping to position a company in new markets, ultimately increasing sales and revenue.
• Increased shareholder value: By taking action on water that ensures the sustainability of your business, whether through brand reputation, operational improvements or safeguarding against regulatory changes may contribute directly or indirectly to increased shareholder value.
• Staff retention: By associating a company’s brand in a positive way in local water issues, a company can maintain a working environment that supports current staff. By enhancing staff job satisfaction, a company can substantially reduce costs in hiring and training new staff.
• Social license to operate: Working with local communities or maintaining/improving brand reputation with customers or the general public in relation to water issues may help to maintain a social license to operate in regions of increasing water stress.

Other

• Carbon management: Greater investment in water efficiency can contribute to a reduction in carbon emissions and help achieve emission reduction targets especially in industries that are water-intensive.
• Implementing adequate sanitation: Investment in building adequate sanitation protects the surrounding water bodies, the environment, and community from infectious disease. Circular sanitation systems can provide additional returns in the form of recycled water, energy, or fertilizers.

(W4.3b) Why does your organization not consider itself to have water-related opportunities?

Question dependencies

• This question only appears if you select “No” or “Yes, we have identified opportunities but are unable to realize them” in response to W4.3.

Change from last year

Modified guidance

Rationale

Investors and other data users are interested to know whether you are aware of water-related opportunities. An explanation of why your organization has concluded that it is not exposed to opportunities is crucial for understanding how your business strategy is aligned with water issues.

Response options

Please complete the following table:

Requested content

Primary reason (column 1)

• Select the reason that best describes why you consider your organization not exposed to water-related opportunities, or why you have been unable to realize them.
• If you select “Other, please specify”, provide a label for the reason.

Please explain (column 2)

• If relevant to your selection in column 1:
  • Outline the method for assessing opportunities;
  • Indicate when you will next repeat an assessment of opportunities;
  • Include how you have defined ‘substantive’ impact in the context of an opportunity and reference the definition of substantive impact you gave in W4.1a if applicable;
  • If opportunities exist, provide an example of opportunities found and explain why these are not considered substantive;
  • Explain why you have not yet conducted a risk assessment/why it is considered unimportant for your business;
  • Briefly describe the evaluation process that is in progress and indicate when the evaluation will be complete.

W5 Facility-level water accounting

Module Overview

The module is only presented if companies have reported in W4 that they have facilities exposing the company to risk. It asks companies to disclose water accounting data at facility level – only for sites exposing the company to a potential substantive change (as defined in W4.1a and reported in W4.1c). This is why this accounting data is requested after risks have been disclosed and is not included with the corporate level accounting questions in Module 1.

Data users are interested in a company’s ability to measure, monitor, and disclose this granular accounting data as a proxy for sound risk assessment and management at the facility and corporate level. Limiting this disclosure to ‘at risk’ facilities helps a company to focus its understanding of how it uses and impacts water resources at ‘hotspot’ locations. Given the local nature of water risks, reporting at this level is considered as good practice. For any facilities for which you do not have data, please leave the field blank. Emphasis should be placed on reporting transparently and providing an explanation for lack of measured data, uncertainty in your data or estimated data.

Disclosure note:

• All organizations are advised to refer to the CDP Technical Note on water accounting definitions when responding to this module.
• You will need to complete this section only if you completed W4.1c because you have facilities exposed to water risks that have the potential to generate a substantive change to your business. CDP is not asking for information for all facilities, just those exposed to substantive water risk as defined in question W4.1a.
• The number of sites you provide this water accounting data for should be the same as the number of sites reported in section W4.1.
• Units: Volumes must be reported in megaliters per year (1 megaliter = 1 million liters or 1,000 m³) in all questions, unless otherwise stated.
• Blank cells: Please ensure when responding to these water accounting questions that cells are only intentionally left blank if you have no data to disclose. Blank cells are interpreted as non-disclosure, i.e. information is not available due to lack of measurement or a choice not to disclose, and are therefore awarded no points by the scoring methodology.
• Values of zero: entering a zero implies a measurement has been made, and the value is zero. Do not enter a zero if no data is available.
• Data accuracy: CDP recognizes that there may be uncertainty linked to water accounting information that could impact on data accuracy. Uncertainty can arise from data gaps, assumptions, metering/measurement constraints including equipment accuracy, data management, etc. The emphasis should be on reporting transparently and on providing an explanation for why reported data is uncertain or wholly or partially estimated or modelled, rather than sourced from direct measurements.

Key changes

• No key changes.
• Click here for a list of all changes made this year.

Sector-specific content

• W5.1: Additional response options for Electric Utilities and Oil & Gas.

Pathway diagram - questions

This diagram shows the questions contained in module W5. To access question-level guidance, use the menu on the left to navigate to the question.

Facility-level water accounting

(W5.1) For each facility referenced in W4.1c, provide coordinates, water accounting data, and a comparison with the previous reporting year.

Question dependencies

• This question only appears if you report that you have facilities exposed to water risk in W4.1c.
• Your response to W5.1 prompts W5.1a.

Change from last year

No change

Rationale

Reporting information on facilities exposed to water-related risks helps CDP data users have confidence that your organization is monitoring local water aspects at the corporate level. It provides insight to dependency on different sources and potential impacts associated with water discharges. For example, withdrawing from an overdrawn freshwater aquifer rather than from seawater will have significantly different consequences for local areas with water stress and an organization's water security. In regions where water sources are highly restricted, the organization's water consumption patterns can influence relations with other stakeholders.
Providing facility-level information is useful for demonstrating regulatory compliance (e.g., discharges to the local environment), for risk assessments and for providing insight to risk responses (e.g., tracking water efficiency improvements).
CDP requests the geo-location coordinates for your facilities exposed to a risk that is substantive at the corporate level. This enables CDP data users to analyze geographically linked risks and to do so across multiple companies. This also makes possible the integration of CDP’s water data with other geographically linked data.

Connection to other frameworks

SDG

Goal 6: Clean water and sanitation

Goal 7: Affordable clean energy

S&P Global Corporate Sustainability Assessment

Water Consumption

Water Use

Exposure to Water Stressed Areas

GRI

Standard 303-3: Water withdrawal

Response options

Please complete the following table. You are able to add rows using the “Add Row” button at the bottom of the table.

[Add Row]

Requested content

• Note: Organizations responding to an electric utilities, metals & mining, coal, or oil & gas sector request should refer to additional sector-specific guidance on this question at the end of the "Requested content" section.

General

• This question asks for water accounting data only for your facilities exposed to substantive water risk (according to the definition you provided in W4.1a) – not for all your facilities.
• Please refer to CDP's water accounting definitions before completing this question.
• Enter data for each facility (or groups of facilities) you identified in W4.1c as being exposed to risk. The table has a maximum of 50 rows. If you reported more than 50 facilities at risk in question W4.1c, you should use the 'Please explain' column of the first row here to indicate how you have selected the 50 facilities for this question; for example 'We reported more than 50 facilities in module W4 so we are providing water accounting data for our 50 facilities with potential to impact most on our global revenue' or 'We reported more than 50 facilities in module W4 so we are providing water accounting data for our 50 facilities with the highest water withdrawals'.
• Please report volumetric data in megaliters per year for the reporting year (the time period you stated in response to W0.2). (1 megaliter = 1 million liters or 1000 m³).
• If you are estimating or extrapolating to provide complete coverage, please give an explanation in column 25 (Please explain). Please remember that a zero should only be used for reporting zero volumes and not for an absence of data.
• If you do not have a figure for any of the facilities you disclose here, you may provide an estimate. Explain this in the last column (Please explain). For withdrawals, data may be collected from several sources, including “water meters, water bills, calculations derived from other available water data or the organization’s own estimates (if neither water meters nor bills or reference data exist).
• Before deciding whether your withdrawals, discharges or consumption can be reported as “zero”, please refer to CDP’s water accounting definitions. This may be the case, for example, if a closed water circuit is in operation.
• If reporting “zero consumption” please remember to check your discharge volumes. Scorers will check that discharge and withdrawals volumes balance (approximately).
• Cooling water: Cooling water (freshwater or sea water) is often withdrawn in large quantities and discharged back to its original source with negligible losses or variation in quality. However, this volume should be included in your water accounts.
• Rainwater: If a company is managing rainwater (for example, by harvesting for use or storage, or to prevent flooding), or is dependent on it for production of goods or the delivery of services, it should try to estimate and disclose it as a withdrawal from the hydrological system into the company boundary. Note that in some jurisdictions rainwater is considered a withdrawal source and organizations are required to report its collection and use.
  • Companies may choose to exclude collected rainwater and domestic sewage from their water withdrawal/discharge volumes only if the resulting error in their water balance would be less than 5%. (This avoids your discharge volumes being larger than your withdrawals).
  • Including rainwater helps companies better understand their water dependency and risks. For some companies, precipitation/rainwater volumes may constitute a principal input of water at site level. This includes run-off where it has to be managed. In these cases, excluding rainwater from water accounting – withdrawal and discharge - would not be a true reflection of site water balance. In addition, there may be reduced impacts from using rainwater in place of other local freshwater sources.

Facility reference number (column 1)

• This CDP facility reference number is used to track information related to the same facility in subsequent questions. It is not specific to your organization, however it does prevent you from having to repeat contextual information e.g., river basin and facility name.

Facility name (column 2)

• You may use the text box to provide a name for the facility. This is to ease reporting and analysis. This name should be used for the same facility throughout the questionnaire.

Country/Area (column 3a)

• Note that a selection must be made for both column 3a and column 3b. Your data will not be saved if either column is left blank.

River basin (column 3b)

• From the drop-down options provided, select the river basin where the facility is located. If you do not see the basin required, select “Other, please specify” and write in one river basin only using the text box provided.
• For companies withdrawing water from large confined aquifers that may not discharge to the river basin they are located in e.g., Ogallala aquifer in the United States, please select “Other, please specify” and type in the name of the local aquifer source. Ensure that the correct country/area name is selected in column 3a (Country/Area).
• You may want to put the sub-basin of a bigger river basin identified in the drop-down menu. In this case use the “Other, please specify” option in the following format: “Putumayo, Amazon”.
• If you select “Other, please specify”, provide a label for the river basin.
• For full instructions see the Introduction to CDP's water security reporting guidance.
• Note that a selection must be made for both column 3a and column 3b. Your data will not be saved if either column is left blank.

Latitude (column 4)

• Enter the latitude coordinates for the facility reported in column 1. Your response should be in the format of decimal degrees and can range from 0 to +/-90.000000.
• If you are disclosing for a cluster of facilities (in accordance with the guidance for W4.1b), you may provide the coordinates for the facility with the largest total withdrawal volumes.

Longitude (column 5)

• Enter the longitude coordinates for the facility reported in this row. Your response should be in the format of decimal degrees and can range from 0 to +/-180.000000.
• If you are disclosing for a cluster of facilities (in accordance with the guidance for W4.1b), you may provide the coordinates for the facility with the largest total withdrawal volumes.

Located in area with water stress (column 6)

• Credible, publicly available methodologies for classifying an area as water stressed include the WRI Aqueduct Water Risk Atlas and WWF Water Risk Filter. Refer to the guidance for W1.2d for more details.
• As good practice, a water-stressed area must be evaluated as a minimum at catchment level.
• Commonly accepted global risk indicators to assess areas as water stressed in terms of quantity and their thresholds for reporting to CDP include:
  • Baseline water stress - higher values indicate more competition among users; equal to/greater than 'High': 40-80% (WRI Aqueduct)
  • Baseline water depletion - higher values indicate larger impact on the local water supply and decreased water availability for downstream users; equal to/greater than 'High': 50-75% (WRI Aqueduct)
  • Water scarcity - higher values indicate greater water stress, based on a multi-model approach including global risk indicators: Water depletion, Baseline water stress, Blue water scarcity, and Available Water Remaining (AWARE); equal to/greater than risk score 3 (WWF Water Risk Filter)

• These indicators account for water stress in terms of the quantity of water resources available. There are currently no commonly used tools/indicators which also take account of accessibility and water quality.

Comparison with previous reporting year (columns 10, 18, 24)

• CDP does not define the threshold for considering a value as ‘much higher’ rather than simply ‘higher’ (or ‘much lower’/’lower’). CDP requests this information from many different industries with huge variations in water use, and it would therefore be difficult to provide a universal threshold that is meaningful (as proportions will equate to different absolute values and impacts).
• You should define your own threshold for what is ‘much higher’ (and ‘much lower’) and apply it consistently so that each year the reported data for this question is comparable and data users can track your water accounts more effectively. A company-specific explanation for these thresholds should be provided in the last column ("Please explain").
• If your response is an estimate, please explain why in the last column.
• If the data was not previously reported, but was collected, you may choose to indicate a comparison with the previous reporting year or select "This is our first year of measurement". In either case, use the “Please explain” column to provide details about the information reported.

Withdrawals from fresh surface water, including rainwater, water from wetlands, rivers, and lakes (column 11)

• For the purposes of this disclosure you should include all surface water sources of a higher quality than brackish (i.e., a TDS lower than 10,000 mg/l).

Total water discharges at this facility (megaliters/year) (column 17)

• Zero discharge permit: If your organization has a zero discharge permit, please consider any discharges that may exist outside this permit and may still be relevant to CDP’s definition of discharges.
• Domestic sewage: Domestic sewage is only regarded as water discharge if excluding it would result in an error in your balance of more than 5%. This may be significant for healthcare residential properties or hotels, for example.
• Aquifer reinjection: Reinjection to aquifers should be considered as a discharge to groundwater.
  
• Soakaway: Water returning to a groundwater source via a soakaway should be considered as a discharge.
  

Please explain (column 25)

• Please comment on the location coordinates, as required. If the facility is an aggregate of multiple locations, ensure that you explain how your methodology for aggregating facilities was applied here.
• If 'Yes' or 'No' was selected in column 6, indicate the tool used to classify the location of the facility as water stressed.
• To assist CDP data users to understand a facility’s water use, you should explain the volumetric data and trends that you report for withdrawals, discharges and consumption and include company-specific information.
• Describe the thresholds for what is ‘much higher’ and ‘much lower’ for the change in volume for each water aspect compared to the previous year. You should account for the change compared to last year and also indicate the anticipated future trends for these volumes, if known (note that future trends should be at least one year after the end of the reporting year provided in W0.2).
• Report whether your volumes for each facility are estimated, modelled, or sourced from direct measurements. If estimation or modelling has been used, report the estimation or modelling methods. If there is any level of uncertainty in your response, or if there is an estimated figure, you should explain it in this field and give the range of uncertainty
• Include any contextual information necessary to understand how the volumetric data have been compiled, such as any standard methodologies used and any assumptions made.
• For ‘Withdrawals from fresh surface water’, it is important that you state which sources apply (rainwater, water from wetlands, rivers and lakes, etc.). Also state if the withdrawal volume for each source is increasing or decreasing. Note: if your use of rainwater equates to more than 5% of your water balance please explain if it is harvested, treated, etc.
• For ‘Third party sources’, specify whether the third party is a municipal supplier or another type of third party organization.
• For discharges to ‘Third party destinations’, state if this includes water to other organizations for further use.
• To give data users confidence in your response, please explain any zero volumes.
• If you have left any column blank because you do not have the data, please describe the barriers to reporting that data and any plans to collect and report it.
• Note: CDP expects withdrawals, discharges and consumption figures to balance (approximately; +/- 5%) so if there is a good reason why this cannot happen, it should be explained in here.

Please explain – additional guidance for consumption volume

• Regarding your water consumption figure, you should indicate if your figure is based on local measurements or is a calculation (for example using withdrawals minus discharges).
• If known, you may provide breakdown of this figure (with reference to CDP’s definition of consumption) including:
  • Volume incorporated into products, crops or waste;
  • Volume evaporated or transpired;
  • Volume consumed by humans or livestock;
  • Net volume stored in a controlled manner;
  • Net volume stored for future use;
  • Volumes otherwise excluded from discharges out of the organization’s boundary.
• It is important that you explain a negative consumption figure where this is the case. This would indicate that your discharges are larger than your withdrawals for the reporting year - due to a net release of water from storage, for example.

Explanation of terms

• Facility: “Facilities” may be used throughout this questionnaire as a broad term and not restricted to a particular site or grouping of fixed buildings and factories. For example, if your organization is in the extractive industries you might normally collate business information for assets or business units, and so you may wish to define ‘facility’ information in this way.
• Facility boundary:This is a management boundary, rather than a physical boundary or a legal entity. Water is considered to have crossed the boundary of your facility when your organization in any way uses it, comes into contact with it, is required to manage it or when it becomes incorporated into your products. It therefore includes any water use and management by your organization outside of the physical fence of a facility; for example, to provide a street cleaning service or when used in fields that are remote from a processing plant.
• Facility reference number: The facility reference number is used to track information related to a facility that is disclosed in different questions. The number is not specific to an organization, but simply avoids an organization having to repeat contextual information such as river basin and facility name.
• Latitude and longitude:Geographic coordinates that specify, respectively, the north-south and east-west position, of a point on the Earth's surface. They are expressed as angular measures and thus, latitude can vary from 0 to +/-90 and longitude from 0 to +/-180.
• Fresh surface water, including rainwater, water from wetlands, rivers and lakes: Water that is naturally occurring water on the Earth's surface in ice sheets, ice caps, glaciers, icebergs, bogs, ponds, lakes, rivers and streams, and has a low concentration of dissolved solids.
  For the purposes of reporting water accounting data to CDP, this surface water source includes water of a quality generally acceptable for, or requiring minimal treatment to be acceptable for, domestic, municipal or agricultural uses (at least <10,000 mg/l TDS, though a range of additional quality properties may also be considered). ‘High quality’ fresh water sources considered acceptable for potable use are typically characterized as having concentrations of dissolved solids less than 1,000 mg/l.
• Brackish surface water/seawater: Surface water in which the concentration of salts is high and far exceeds normally acceptable standards for municipal, domestic or irrigation use (at least higher than 10,000 mg/l TDS). Seawater has a typical concentration of salts above 35,000 mg/l TDS.
• Water withdrawal: The sum of all water drawn into the boundaries of the organization (or facility) from all sources for any use over the course of the reporting period.
• Withdrawals from groundwater (renewable): Water which is being held in, and can be recovered from, an underground formation. Renewable groundwater sources can be replenished within 50 years and are usually located at shallow depths.
• Withdrawals from groundwater (non-renewable): Water which is being held in, and can be recovered from, an underground formation. Non-renewable groundwater has a negligible rate of natural recharge on the human time-scale (more than 50 years), and is generally located at deeper depths than renewable groundwater. This is sometimes referred to as “fossil” water.
• Produced water: Water which enters the organization’s boundary as a result of the extraction, processing, or use of any raw material, so that it must be managed by the organization.
  When reporting to CDP, this water should not be counted as recycled water when put to use within a single cycle of a business process. Examples of produced water include moisture derived from vegetation such as in sugar cane crushing and the water content in crude oil. (Note that companies with oil and gas activities should refer to CDP’s sector specific guidance for this water aspect).
• Produced water (Oil & gas sector only): Water that is brought to the surface during the production of hydrocarbons including formation water, flow-back water and condensation water (IPIECA “Oil and gas industry guidance on voluntary sustainability reporting”, 4th edition, 2020).
• Third party sources: This includes water provided by municipal water suppliers, public or private utilities, and wastewater from any other organization.
• Water discharge: The sum of effluents and other water leaving the boundaries of the organization (or facility) and released to surface water, groundwater, or third parties over the course of the reporting period.
• Discharges to groundwater: Water which is being held in, and can be recovered from, an underground formation. Discharge to groundwater, by human activity or natural activity, refers to a destination beneath the soil surface, such as a water bearing layer of rock (aquifer). Examples of discharges to groundwater include disposal of sewage, trade effluent and surface water run-off from urban areas, through such methods as spreading basins, soakaways, swales or injection wells.
• Third party destinations: This includes municipal wastewater plants, public or private utilities, and other organizations involved in the transport, treatment, disposal or further use of wastewater. Note that to qualify as a third-party destination, “other organizations” using your wastewater must be outside your reporting boundary given in question W0.5. Any of your wastewater that has been treated on your own site should be reported as discharge according to its ultimate destination (for example, to groundwater), as this is where any potential risks for the company lie.
• Water consumption: The amount of water drawn into the boundaries of the organization (or facility) and not discharged back to the water environment or a third party over the course of the reporting period.
• Water diversions (Metals & mining and coal sectors only): According to the Water Accounting Framework from the Mineral Council of Australia water diversions are flows from an input to an output without being utilized by the operational facility. The flow is not stored with the intention of being used in a task or treated.
• Carbon capture and storage (CCS) (Electric utilities sector only): As defined by the IEA, a family of technologies and techniques that enable the capture of carbon dioxide (CO₂) from fuel combustion or industrial processes, the transport of CO₂ via ships or pipelines, and its storage underground, in depleted oil and gas fields and deep saline formations.