Water-related risks and opportunities

01 Aug 2009Archived News Climate Change Matters

The global financial crisis, water scarcity and action on climate change are leading to investor demand for increased transparency for water-related risk.


Mining is an example of one sector for which water presents a critical underlying resource and/or liability: there are supply limitations during drought, peak flow issues during floods, disruptions to operations and ecosystem management. Traditionally water management has been considered a site based issue and limited corporate interest and transparency was required for water related challenges. However, the landscape is rapidly changing with growing concerns amongst investors about how water, and related aspects, are managed. JPMorgan (2008) states that “... corporate disclosure of water-related risks is seriously inadequate ....” and identifies the mining sector as "high risk".

All Australian businesses however, should be aware that water prices are increasing. Water charges throughout Melbourne have increased by an average of 20 percent in 2009, Sydney Water will increase it's charges by 25-34% by 2012. Price increases reflect greater investment in water infrastructure to provide reliable water supplies. The current investments encompass energy intensive treatment technologies thereby providing closer links between energy and water prices.

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