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Growing water risk, Vodafone lures women, Amazon's solar play, and Fairtrade boost despite Brexit
Companies ‘slow to act on growing water risk’
Exposure to water-related risks is becoming an increasing concern for European investors, yet companies are proving slow in responding. Of the 288 European companies approached last year by the investor-led transparency initiative CDP for water-related information, only 121 (42%) responded. Although this was up from 38% the previous year, disclosure rates “clearly need to change”, CDP states in a new report (pdf). Performance also needs to improve. Over one-third (36%) of responding companies report exposure to water risks in operations and supply chain, yet fewer than half have thoroughly assessed these risks. The most significant risks relate to the availability of sufficient quantity and quality of water at a local level (cited by 55%), new regulations or tariff changes (51%), and local conflicts over water resources (44%).
Among reporting companies, most attention is paid to the amount of water they withdraw (cited by 87%) and discharge (83%). Of these companies, however, fewer than four in 10 actually verify water withdrawal data by source for their at-risk facilities. The percentage falls even further for at-risk facility discharges. On a more positive note, three-quarters report board-level oversight of water issues, compared with the global average of 69%. Furthermore, four-fifths say that they integrate water issues into business strategy.
The findings come despite business leaders at this year’s World Economic Forum citing the threat of a future water crisis in their top three global risks (pdf) for the fourth consecutive year. According to the World Bank, the economic impact of water scarcity could put at risk 6% of GDP by 2050 in regions such as the Middle East and the Sahel. The bank also forecasts that water availability in cities could decline by as much as two-thirds by 2050, as a result of climate change and competition from energy generation and agriculture. Nearly a quarter (24%) of corporate efforts to mitigate climate change by reducing greenhouse gas emissions, meanwhile, depend on a stable supply of good quality water, the CDP report maintains.
One partial solution to the water-related risks faced by businesses could be to ramp up investment in the circular economy. According to a new report (pdf) commissioned by the Dutch bank ING, circular water measures could reduce global water demand by 412 billion cubic metres per year, equivalent to 11% of annual water demand. Such measures include simple water demand reduction (in industry in particular, where demand growth is highest), through to actually increasing water availability via water reuse, water purification and water retention. This last option includes steps such as: upstream investment in wetlands, forestry projects and other natural infrastructure; water storage projects, such as above-ground water reservoirs or rainwater harvesting; and underground aquifer storage and recovery activities. Global fresh water demand is expected to grow by 2% per annum over the coming decades, the report states. If no changes are made, demand is forecasted to outpace the sustainable water supply in 2040 by 35%.
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Vodafone woos women back to the workforce
TELECOMS COMPANY Vodafone is looking to entice career-break women back into the workforce as it sets out to hire 1,000 people worldwide over three years. The focus on these so-called “returners” follows researchby the financial services company KPMG that suggests an estimated 96 million skilled women aged between 30 and 54 are on career breaks worldwide. Of these, 55 million are qualified for middle management or senior roles. Vodafone says it is committed to having women in 30% of its 7,500 managerial team by the end of this decade, up from 27% at present.
The findings of the research dovetail with a recent report by KPMG on career-break women in the UK specifically (pdf). Of the 545,000 or so professional women currently on a break from work, 427,000 anticipate returning to work, although experience suggests three in five will return to lower-skilled or lower-paid jobs. Addressing the career break penalty could boost female earnings by £1.1bn annually, equivalent to £4,000 per woman. The net gains of women returners to the UK economy is estimated at £1.7bn.
Vodafone’s announcement, which is accompanied by a paid six-month transition programme, follows a meeting earlier in the year of the UK government’s Women and Work All Party Parliamentary Group. The group recommended that all companies with more than 250 employers should develop return to work policies for women. The biggest barrier to women returning to work is the cost of childcare, according to the group’s inaugural report (pdf). The report cites a 2014 study by Mumsnet and the independent think tank Resolution Foundation that found that 64% of women out of work said childcare costs prevent them taking on employment. For working mothers, the next most common barrier is employers being unable or unwilling to offer more hours once they are ready to go back to work. A third significant barrier is caring duties. Women make up a disproportionate amount of care-givers (58%), according to the charity Carers UK. In total, 2.3 million adults in the UK have given up work and nearly two million have reduced their working hours as a result of caring at some point, the all-party group states.
Solar power goes through the roof
AMAZON is to install large-scale rooftop solar systems on 50 distribution and sorting centres worldwide by 2020, delivering up to 41MW in zero-carbon capacity. The rooftop arrays could provide up to 80% of a single facility's annual energy needs, the US e-commerce and cloud services giant says. California-based Amazon is currently the largest corporate purchaser of renewable energy, the State of Green Business Report 2017finds. In November, the company announced a deal to source electricity for its massive cloud data centres from five new solar farms in Virginia, increasing its total annual purchase of clean energy 580,000 megawatt-hours.
Globally, meanwhile, solar power is going through the roof. According to new figures from the trade association SolarPower Europe, an all-time record of 76.2 gigawatts of new capacity was installed last year – up 49% on the previous year. The increase in capacity is driven primarily by China, which contributed over two-fifths (34.2GW) of all new capacity, a 125% rise on the year before. The next fastest-growing market is the US, which saw solar capacity jump by 14GW in 2016, up from 7.3GW in 2015. More recent statistics from the US-based Solar Energy Industries Association show that solar ranked as the top source of electricity capacity additions in the US for the first time ever, representing 39% of all new electricity supply. On average, a new megawatt of PV is coming online every 36 minutes in the US. Japan came third in SolarPower Europe’s rankings, reaching around 8.6GW, ahead of India with 4.5 GW.
The figures show a worrying trend for Europe, however, with the rate of new installations falling 21% to 6.7GW last year. The figures come despite solar power prices dropping to their lowest levels across much of the continent. The EU is currently proposing a target of sourcing at least 27% electricity from renewables by 2030.
Fairtrade gains ground amid fears of Brexit
THE FAIRTRADE market in the UK increased by 2% in 2016, according to an initial estimate by the Fairtrade Foundation. The rise brings the total retail value of the market to £1.65bn. Several corporate commitments have helped drive growth, including US confectionery giant Mars’ completion of its first full year of sourcing Fairtrade cocoa, retail food chain Greggs’ decision to sell Fairtrade coffee, tea and bananas, and the expansion of Fairtrade wines at supermarkets Co-op and Tesco. The best-performing categories were bananas (up 8%) and coffee (up 6%), while tea and cocoa both slipped back (down 3% each). The overall net increase in sales will result in additional financial premiums to certified farmers of around £30m. The value of the UK market has still to bounce back from its 2014 high of £1.7bn. Sales revenues dropped by £100m in 2015 due to a collapse in the Fairtrade sugar market following changes in EU market regulations.
The UK is one of the world’s leading markets for Fairtrade produce, leading to worries for the movement when Brexit is triggered. In a new report on the topic (pdf), the Fairtrade Foundation is warning that the UK’s exit from the European Union will be “make or break”. In a worst-case scenario, Brexit could lead to at least £1bn in “crippling” extra taxes for Fairtrade importers into the UK. EU measures currently exempt the payment of UK duties or other charges on products imported from the world’s poorest countries. At present, 116 developing world countries trade with the UK, with total import values at £34bn per year. Nearly half (47%) of these importers could face tariffs if the UK does not commit to continue their tax exemption after leaving the EU. On the flipside, a post-Brexit UK has the opportunity to reverse certain EU measures that currently harm poor-country farmers. The most obvious example is the payment of agricultural subsidies to EU farmers. European public expenditure on agriculture and rural development amounts to €58bn (£50.4bn) per year, according to the EU’s most recent budget figures, equivalent to 38% of the EU’s overall budget.
By the most recent count, Fairtrade International, the Germany-based international Fairtrade advocacy group, reaches 1.6 million certified farmers in 75 countries. The most significant sectors by volume are flowers and plants, bananas, coffee, sugar and cocoa.