Indian Financials Fail To Identity Water Management As Material; Its Negative Implications: Report
Despite an increase in water consumption year-on-year (YoY), financials in India have not identified water management as material or any negative financial implications from it, revealed a report by cKinetics.
The report titled, 'State of Sector: Climate Action by India Inc 2023' raised concerns about the rising water consumption in water-stressed regions by corporations operating there. This not only exacerbates existing water scarcity but also poses risks to the sustainability of these companies' operations.
A higher number of companies in utilities (92 per cent), energy (75 per cent) sector considered water management as material and having negative financial impact. Only one company from financials considered water management as material, however, did not identify any potential negative financial impacts from it. Communication Services did not identify water management as material.
The report suggested that implementing Zero Liquid Discharge (ZLD) technologies can significantly reduce water dependence and promote circularity, yet only ten per cent of the top 100 companies currently have ZLD mechanisms in place.
Talking about focus on reducing water consumption at India Inc, the report mentioned that water consumption reduction (82), water positivity (35) and water neutrality (25) goals find flavor at India Inc, demonstrating willingness by Indian corporates to reduce their water footprint.
"Financials, energy sectors reporting no significant water management goals," according to the report.
The top 200 companies in sectors with high water consumption intensity reported a negative correlation with size of business and percentage of water management goal achieved. In comparison, less water intensive sectors reported a positive correlation with growth in business and their ability to meet climate action targets.
