28 March 2012- WWF and DEG launch the Water Risk Filter, an online water risk tool with data sheets and interactive maps of 235 countries to help businesses and investors address water-related risks. The tool is free and it uniquely offers a practical, robust toolkit to help companies and investors mitigate risk. It is also incredibly easy to use. Geared specifically for non-experts, it guides users through a simple pre-assessment survey that uses industry and geographic information to determine in less than five minutes if additional evaluation is recommended.
China Water Risk believes that the Water Risk Filter is a timely tool given increasing investor and business focus on water risk arising from China’s water crisis and is pleased to be named as a knowledge resource in the Water Risk Filter site amongst others working in the water space. Stuart Orr, WWF International’s Freshwater Manager gives us more colour on the tool …
CWR: Can you give us some quick background as how this came about? What are the key reasons driving DEG to invest time and money into this?
Stuart: At a UNEP-FI meeting in Cape Town a few years ago, Peter Thimme from DEG asked WWF to help them look at water risk to their clients. They had identified water as a big issue but realised that this was poorly understood by their clients and under-reported as an issue. DEG had seen the work we had done on risk and thought we might be able to collaborate on the project. From there we put a TOR together and kicked off the process – and that’s nearly 2 years ago now.
DEG saw this as a great way to screen and support their investments and also create technical assistance off the back of the analysis. Their support for the work therefore was about putting this strong methodology we had developed into the public space. I think they have made a massive contribution to the effort of Water Stewardship.
CWR: Was the idea always to make it a free tool? SMEs usually complain that they do not have the resources to measure such risks – is this tool aimed at them?
Stuart: We always wanted this to be free. For a few reasons. DEG is a public institution first of all and WWF is not a consultancy. We do work with individual companies in partnerships that have strong elements of strategy support but our role is different than that of a company that wants to generate funds as a result of the intellectual capital. Our mission to secure water for people and nature is too big for us to do alone, so anything we do has to be magnified to be effective. For us we want others to take this tool up, others to help companies find their way through the water challenges.
CWR: What do you hope to achieve from this? Any targets?
Stuart: We want to see more companies and investors paying attention to water issues and starting to take them seriously. The issues are real and they need addressing and we cant have people siting on the sidelines thinking this is not their issue – it is. As for targets, we don’t have hard numbers we want to achieve. To be honest we have no way of knowing how useful, slow, fast the uptake of the tool will be. Time will tell.
CWR: Are companies paying more attention to water risks today? What do you think is the main reason why they would use this tool?
Stuart: Companies are certainly hearing more about risk, and they are perhaps asking questions they didn’t ask 5 years ago – but very, very few have even started to evaluate their risks in any tangible way. But partly this has been because It has been hard to do, confusing, expensive etc – the intent was for us to therefore put something out there that was free, robust, easy to use and allowed many more companies access to this type of information.
CWR: We like the Quick View function – which gives companies an overview of the basin and industry risk exposure to water. What other easy-to-use features have you incorporated to give the companies no reason not to use the Water Risk Filter Tool?
Stuart: We think the mapping, knowledge base, country fact sheets, mitigation actions and case studies are useful to anyone – and we need more! But this was intended to be easy to find and easy to extract so that everyone could find the information.
CWR: Companies can chose to use their WRF profile to answer the CDP Water questionnaire with the click of a mouse. Why did you link up with the CDP Water Disclosure Project? With the tool answering 85% of questions in the CDP water questionnaire, do you expect to see an increase in the response rate to the 2011 survey?
Stuart: We have been big supporters of the CDP water project from the beginning and in fact have helped them with their questionnaire. During the formation of our questionnaire it was important that we drew on other initiatives to ask the same or similar questions. Again, i think companies appreciate that these tools connect, making it less time-intensive for them to fill out and sharing information between efforts only makes the possibility of greater uptake higher. I hope this increases their numbers – we’ll see.
CWR: The tool is primarily built for companies but can investors also use this tool to assess whether companies they invest in have a very high / high/ limited or low risk exposure to basin or industry risk?
Stuart: Absolutely. Investors we the ones that helped us set this up – and clearly they need a way to assess their clients or investments so that they could understand water issues better. However i have to admit that this is also a double-edged sword, in the sense that we are not suggesting investors should penalise or move away from water scarce or high risk areas. Quite the opposite. We are all going to be living under some water stress or another – its really about how we manage systems in those situations. High risk should be high investment and the performance and behaviour of companies should be judged, not just where they are.
Companies using the tool are naturally concerned about the privacy of the data. We understand WWF will manage tool and the data. Will that be a conflict of interest for WWF if companies using the tool are huge polluters or large users of water in an already water scarce environment?
We can only see data if we are given permission. We do not see what companies put in the tool. But we don’t see this as a conflict of interest at all – we see this as a way to drive action on those issues. We know that there are big polluters or water users out there and this tool will make it very hard for them to hide. If we can make this a part of investment, due diligence, siting, improvements – then that’s a good thing – anything that helps to improve the state of how businesses interact with water is a good thing.
CWR: There is a lack of water usage data by industry. As companies use the Water Risk Filter, it will be a great database for benchmarking water use by sector, on a no-names basis of course – are you planning to do so in the future?
Stuart: No plans just yet, and again, we won’t have permission from everyone to see who is using the tool and where they are.
CWR: Has the assessment of the water risks of DEG client companies, led to a change in their risk profile and affected DEG’s lending policy towards them? Is using the Water Risk Filter perquisite to new lending for DEG?
Stuart: Existing clients of DEG with a higher water risk profile were offered support via the technical assistant fund of DEG, in order to assist the companies to lower the water risks. In the lending policy, water risks are an integral part of the evaluation of the environmental risks. The WRF will be applied for new loans when the company and/or basin presents a higher water risk profile and recommendations of the WRF will be considered in the environmental and social action plan for the companies.
To go to the Water Risk Filter click here