@Risk

In the second annual Carbon Disclosure Project (CDP) Water Disclosure Global Report released last week, more than half (59 percent) of the companies surveyed said they are exposed to water-related risks such as flooding, scarcity and reputational damage.

What’s more, almost four in 10 (38 percent) already have experienced water-related business impacts, including disruption to operations from severe weather events (e.g., flooding) and water shortages.

And companies described most of their water risks as near- term. Nearly two-thirds (66 percent) of risks in the supply chain and 64 percent of risks in direct operations were identified as occurring between now and 2016.

But even so, the report also found that only 57 percent of the 190 publicly listed organizations that participated in the survey implement board-level oversight of water policies, strategies or plans. By comparison, a report released by CDP in September 2011 showed that 94 percent of Global 500 companies report board-level oversight of climate change.

Why the gap? While it’s encouraging to see that awareness about water risks is on the rise, it’s also clear that companies need to strengthen their oversight of water-related issues –particularly in the supply chain. The CDP report revealed that more than one-third of companies (38 percent) are unaware of whether they are exposed to water risk in their supply chains. In the Consumer Discretionary sector, which is dominated by industries that are particularly exposed to supply chain risk (e.g., retailers, hotels, resorts, and automobile manufacturers), that percentage rose to 41 percent.

The report also found that: (more…)

Last week, the world population reached 7 billion. Almost concurrently, NRG Expert released new forecasts which show that, given the current rate of population growth, global electricity supply is not likely to keep pace with future energy needs.

According to the new study, the energy tipping point is only about 20 years from now. NRG Expert predicts that 2032 will be the pivotal year where global electricity demand is likely to surpass supply based on global generation.

Of course, population growth isn’t the only factor that impacts the sustainability of the world’s energy supply. As NRG Expert points out, depleted natural resources and the phasing out of nuclear power in developed and developing countries also play a role.

A new report from Capgemini seems to draw a similar conclusion. The 13^th edition of the European Energy Markets Observatory (EEMO) found that energy consumption growth in developing countries, the Fukushima accident and the slowing down of the needed investments made by utilities all will have negative consequences on the security of energy supply and greenhouse gas emissions in Europe. (more…)

More than 100 global economies –including six G7 economies –have energy supplies that are at “extreme” or “high” risk in the short-term, according to a new analysis from Maplecroft.

The study, titled The Energy Security (short-term) Index, assesses immediate risks to the availability, affordability and continuity of energy supplies in 196 countries by evaluating energy imports, diversity of supplies, import security and energy costs.

Maplecroft rated three countries, Sierra Leone (1), Gambia (2) and Guinea Bissau (3), as “extreme risk” in the short-term index.

In addition, another 122 nations are rated “high risk” in the short-term index, including the G7 economies of: (more…)

Water is one of our most important natural resources, and it is quickly becoming a significant business growth and development risk. Climate change, population growth and increasing living standards are the culprits, each contributing to rising pressure on already scarce water resources.

Investors are beginning to take note, as it becomes more and more clear that sustainable water management is needed to mitigate business risks and help ensure access to sufficient quality and quantity of water supplies.

A new report by WWF and German development bank DEG contains some sobering news. According to DEG and WWF, 191 out of 319 companies studied as part of the report showed high potential business risks related to freshwater. These risks break down into three broad, inter-related categories: (more…)

Rare earth elements are essential for the manufacture of a variety of today’s new technologies, ranging from computer hard drives and precision-guided munitions to critical components of the clean energy economy.

These days, clean energy technologies –such as hybrid-electric batteries, wind turbines, solar cells and energy-efficient lighting –constitute about 20 percent of global consumption of rare earths. However, as these technologies become increasingly popular, their share of global consumption will continue to grow.  As a result, it’s no surprise that the US Department of Energy is keeping a careful eye on the global supply of rare earths.

Last week, the DOE released its Critical Materials Strategy, a report that analyzes fourteen elements and identifies five rare earth metals (dysprosium, neodymium, terbium, europium and yttrium), as well as indium, as the most critical based on importance to clean energy technologies and supply risk.

The report also explores eight policy and program areas that could help reduce vulnerabilities and address critical material needs. According to DOE, these areas include: (more…)