The US Security and Exchange Commission’s (SEC) new guidance for including climate change risks in corporate disclosures includes a focus on water risks. Although corporate reporting related to climate change issues is often limited to energy and emissions data, the SEC’s guidance includes looking at exposure to impacts of climate change like water scarcity, and salt-water intrusion from rising sea levels. The new guidance may have a global impact in the form of a ‘ripple effect’ along a business’ supply chain, as firms subject to SEC regulation require similar reporting from their suppliers and distributors. However, this may also mean heavy reporting requirements for businesses – identifying and measuring water risks will be highly industry- and location-specific, and the concept of water risk is still relatively undeveloped and unstandardized.
