Findings

Outputs provided included the following for each company:

• Overall consumption of water in highly and severely water stressed regions for all crops covered by ESCHER.
• Water consumption in severely water stressed cropcountry combinations:
  • Paddy rice in Bangladesh
  • Paddy rice in India
  • Plant-based fibres (cotton) in India
  • Plant-based fibres (cotton) in Uzbekistan, Tajikistan and Turkmenistan
  • Sugar cane and sugar beet in Bangladesh
  • Sugar cane and sugar beet in India
  • Wheat in China
  • Wheat in India
  • Wheat in Uzbekistan, Tajikistan and Turkmenistan

In both cases, data was available in both absolute terms as well as relative to company revenue (normalised). The data on water consumption provided by PwC ESCHER allowed the steering committee to rank the universe of companies based on their overall water consumption in highly and severely water stressed regions around the world. Specific data on individual companies is not provided in this report, rather is only available to PRI signatories who are participating in the coordinated engagement. Despite this, a number of general conclusions on company exposure to water risk within agricultural supply chains can be made from the ESCHER data:

• Strong association to revenue: Unsurprisingly, there was a strong correlation between individual company revenue and estimated water consumption in water scarce regions; that is, the higher the revenue, the higher the consumption.

• Significant exposure to some crop-country combinations; limited exposure to others:
  • There was very low company exposure to water stressed Bangladeshi sugar and paddy rice, and relatively low exposure to water stressed Chinese wheat.
  • Conversely, the universe was found to be highly exposed to water stressed Indian wheat.
• Large difference between the average and median water consumption: Even when normalised to revenue, there was a significant difference between companies in terms of water consumption. Many showed very large or very small consumption figures. The average estimated total water consumption in highly or severely water stressed regions is 127.5m3 per 1000 USD revenue, whereas the median is 81.1m3 per 1000 USD revenue.
• Agricultural products, food retail, packaged foods & meats and soft drinks companies the biggest consumers: The average agricultural products company was found to have the highest water consumption in highly and severely water stressed regions by a significant margin, both in absolute and relative terms. Companies in food retail, packaged foods & meats and soft drinks were also found to be relatively high consumers. 
• Apparel, luxury goods, brewers and distillers & vintners had lowest average consumption in water scarce regions: All had relatively low total consumption, but still around 50m3 water use per 1000 USD in revenue.

Risk management 

Oekom research data on company risk management for both direct and supply chain operations showed that while there were some obvious strong performers, namely well known, consumer facing brands, the general performance across the universe of companies was poor. The average score for food, beverage and agricultural products companies was 1.68 out of 4 (approximately D+) and 1.43 out of 4 (approximately D) for apparel. Some sectors performed slightly better than others, with agricultural products and apparel scoring poorly and brewers scoring the highest. As mentioned above, data on retailers was not available.