Water scarcity puts fear into SA companies

Seventy percent of South African companies surveyed believe they are at direct risk from water scarcity, according to the 2011 Water Disclosure Report released on Monday.

“Water scarcity is a significant risk for South African companies,” the National Business Initiative (NBI) said in a statement on the report it helped compile.

“Eighty-five percent of South African companies report some exposure to water-related risk in their direct operations, with 70 percent of respondents believing that risks to their direct operations could occur within the next five years.”

Forty-six percent said the majority of their operations were located in areas where water scarcity was a risk.

Twenty-six South African companies took part in the survey.

The survey found water issues were not receiving the same attention as climate change at board level.

One-third of companies did not exercise board level oversight of water issues, compared to 90 percent of companies that dealt with climate change at board level. According to the survey few companies were setting concrete, quantitative targets relating to water.

“Climate change risks are typically viewed to be more long term.

“Due to the near-term nature of water risks, the number of stakeholders involved, the technological and capital requirements for solutions and this immediacy, companies must start to act now in support of a consistent and stable supply of water,” the report found.

South Africa could suffer from a water supply shortage by 2030.

“[I]f no action is taken, South Africa is expected to experience a 17 percent gap between water demand and supply by 2030, equating to a water shortfall of 2.7 billion cubic metres.”

The report found that some of the country’s most economically important catchment areas would be worst affected.

“South Africa will have to resolve tough trade-offs in water use between agriculture, key industrial activities such as mining and power generation, and the supply to rapidly growing urban centres.

“These trade-offs will be further complicated by an increasingly uneven and unpredictable supply of rainfall as a result of climate change, declining water quality, and reliance on significant water transfers from neighbouring countries coupled with an ailing and overburdened water infrastructure system.”

The NBI is a voluntary group of national and multi-national companies, which work together to find solutions to sustainable growth and development in South Africa.

The Water Disclosure Report is part of the international Carbon Disclosure Project which conducts annual surveys to discover the extent to which companies are dealing with climate change problems.

The Carbon Disclosure Project, managed by the NBI, was introduced in South African five years ago.

The project’s Water Disclosure Report was introduced internationally in 2010 with the backing of 354 investors representing US43 trillion (about R325.8 trillion) in assets.

Fifty-six of the JSE’s top 100 companies in South Africa and leading companies in Australia were invited to participate. The two countries were selected because they are particularly water-stressed.

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