This document summarizes a presentation on water scarcity and the role of investors. It discusses how water scarcity poses global challenges, particularly for agriculture and the food industry. It analyzes the indirect water consumption of major food companies and finds their disclosures are still lacking. The document also examines controversies over dams, finding 60% face environmental and social issues. A joint study with NGO International Rivers used the World Commission on Dams criteria to assess compliance and estimated cost overruns of 50-100% for many dams. The presentation calls on investors to raise standards on water and dams issues.

1. « Water scarcity:
what role for the investor ?»
OXFAM Cheuvreux SRI Forum « Access to Water »
Paris, September 24th

2. From collective investor responsibility …
• Water scarcity and unequal distribution of resources
• Drinkable Water
• Water Pollution
• Climate Change
A global issue with many water-intricated ESG challenges

3. … to individual investor responsibility
• A focus on water scarcity
– A problem for agriculture
– A problem for the food industry
• 2 governance questions
– What responsibility of the food industry in water scarcity ?
– How much cost dams-related environmental and social
controversies ? (analysed with International Rivers)

4. Responsibility of the food industry: missing link
Indirect water consumption
Product l / kg Product l / kg
1 000
(600-1 400)
Milk powder 3 000
(2 000 - 4 000)
9 000
(7 000-11 000)
Vegetable oils 7 000
(3 000 - 20 000)
Cocoa 7 000
(5 000 -10 000)
Coffee 20 000
(15 000 - 30 000)
Sources : Hoekstra, Inter Expansion

5. Responsibility of the food industry
• Indirect water consumption
(more on calculation)
Direct (M m3 / y) Indirect (M m3 / y)
Danone 8 10 000
Nestlé 157 40 000
Unilever 61 15 370
• An emerging answer but still a lack of understanding
• Unilever on tea : “it is not a problem, it is green water”
• Danone on milk in Saudi Arabia or Mexico
• Nestlé : 0,004% or 1% of total water consumption

6. Controversies regarding dams
• Facts
– 60% dams projects in the world generate controversies on
impact and use
– Average overcost is 60% of estimated cost
– Environmental and social issues are hidden, not extra costs.
• Joint analysis Inter Expansion – International Rivers
– Analysis of compliance of the 7 World Commission on Dams
conditions for a sample of 13 dams (International Rivers)
– Each condition considered as a failure probability
– Double use : double impact on overcost

7. Financial impacts regarding dams : what else ?
• Compliance analysis : 3 conditions satisfied at best
• Financial impacts :
– 4 projects overcost of 100% or more
– 7 projects overcost: 50 to 65%
– 2 projects overcost : 25%
More details
• Who pays the bill ?
– Lenders : supranationals and more specifically AFD
– Carbon markets : many projects have asked for CER
– Future generations : with damned dams in crazy sites

8. Conclusions of the survey
Engagement under discussion at BELSIF
• Food industry : water is a key issue
– Raise the standard of disclosure by asking for indirect water
consumption
– Raise the issue of relative water consumption of countries to
help improve the efficiency of water use in agriculture
• Dams : environmental and social costs are hidden
– Use probabilistic approach to reassess the viability of dams
– Avoid CER to be used as a laundry for failed dams
– Promote in-flow dams for electricity generation

9. Thank You for your attention
Dr Grégory Schneider-Maunoury
Head of SRI
APRIONIS – Inter Expansion
Tél. : + 33 1 46 84 38 47
E-mail : gregory.schneidermaunoury@aprionis.fr

10. Growth of the different water use
Source: UNESCO
UNESCO (2006)
Back to
presentation

11. Water scarcity : a moving area
« Thirst
triangle »
Rectangle of
scarcity
Asiatic only problem ?
Asia
• 63% world population
• 36% freshwater resources
Percentage of population that will be in water scarcity
Less than 10%
More than 40%
11 source : UN 2005

12. Water scarcity : unequality or waste ?
12
IWMI, 2007
Back to
presentation

13. Water consumption is dertermined by
food and crop choices
Two key choices:
Meat Consumption (vs. Fish)
Water consuming export production (cotton)
Rockstrom & Barron, UNESCO, 2005
Back to
presentation

14. Corporate environmental disclosure
Direct Water
Consumption
(M m3)
Specific Water
Consumption
(l/kg)
Comment
Danone 8 Not disclosed Decrease of 22% over
2000-07
(1,63 l / l bottled water)
Nestlé 157 4,05 Decrease of 35% over
2002-06 for specific
(1,82 l / l bottled water)
Unilever 61 2,98 Decrease of 55% for
absolute and 40% for
specific since 2002

15. Some more financial data
Major raw materials (% sales)
Danone Milk : 16%
Nestlé Milk : 6%
Coffee : 3%
Cocoa : 2%
Unilever Palm oil : 6%
Tea : 3%
Cocoa : 3%
This table enables to estimate the quantity of materials if not disclosed
Source : Cheuvreux

16. Quantification of indirect consumption
Product l / kg Product l / kg
1 000
(600-1 400)
Milk powder 3 000
(2 000 - 4 000)
Tea 9 000
(7 000-11 000)
Vegetable oils 7 000
(3 000 - 20 000)
Cocoa 7 000
(5 000 -10 000)
Coffee 20 000
(15 000 - 30 000)
Sources : Hoekstra, Inter Expansion

17. Water risk exposure in the food industry
Water direct
consumption
million m3 / yr
Water indirect
consumption
million m3 / yr
Comment
Danone 8 10 000
700 l / € sales
Least exposed in absolute
Nestlé 157 40 000
600 l / € sales
The most transparent
Unilever 61 15 370
400 l / € sales
Least dependent on milk,
with significant local
initiatives
Back to
presentation

18. Sample of the survey
(with International Rivers)
Dam Country Utility
Financing
body Power (MW)
Nam Theun 2 Laos EDF
AES
DANS
Tala PA
Eskom
Eskom
IPS
EEPC
AES
EDF
XiaoXi
Suez
EDF
1088
Changuinola 1 Panama
ADB, BM
WB, USAID
-
WB, Bhoutan
AFD, GTZ
Afrique du Sud
AFD
JP Morgan
USAID
AFD
China
IADB …
222
Jorethang Loop India 96
Tala Bhutan 1022
Mphanda Nkuwa Mozambique 1000
Epupa Namibia 360
Bujagali Uganda 200
Gibe III Ethiopia 1870
Urra Colombia 750
Son La Vietnam 2400
Xiaoxi China 136
AFD, GTZ
Madeira Brazil 3200
Theun Hiboun Laos 280

19. Quantification of potential overcosts
Dam
Not realised
conditions
Overcost
probability
Double
use Impact
Nam Theun 2 4
6
6
6
6
7
7
6
4
4
6
4
4
Yes Overcost of 65%
Changuinola 1
56%
85%
85%
85%
85%
100%
100%
85%
56%
56%
85%
56%
No Overcost of 50%
Jorethang Loop Yes Overcost of 96%
Tala Yes Overcost of 100%
Mphanda Nkuwa No Overcost of 50%
Epupa Yes Non achievement
Bujagali No Non achievement
Gibe III No Overcost of 50%
Urra No Overcost of 25%
Son La No Overcost of 25%
Xiaoxi No Overcost of 50%
56%
Madeira Yes Overcost of 65%
Theun Hiboun Yes Overcost of 50%
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20. Conditions of the World Commission on Dams
1. Gaining Public Acceptance
2. Comprehensive Options Assessment
3. Addressing Existing Dams
4. Sustaining Rivers and Livelihoods
5. Recognizing Entitlements and Sharing Benefits
6. Ensuring Compliance
7. Sharing rivers for peace, development and security
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