As sustainability expectations evolve, companies are being asked to move beyond reporting water data toward demonstrating measurable impact. What was once a matter of compliance is becoming a strategic discipline—one that connects financial resilience, environmental responsibility, and long-term competitiveness.
During a recent Waterplan webinar, Joe Ray, Head of Water at CDP, outlined the shifting dynamics shaping corporate water disclosure today. His message was clear: the global sustainability ecosystem is transforming, and so must the way companies measure and communicate their water performance.
“The sustainability world is almost unrecognizable today from where it was five years ago,” said Joe Ray. “That presents a big challenge for all of us—but also an opportunity to influence and shape those trends going forward.”
This shift comes at a pivotal moment. Even as ESG frameworks face skepticism in some regions, water issues are gaining unprecedented visibility. According to CDP, the number of corporate water disclosures has doubled between 2023 and 2024, reflecting a widespread recognition that water risk is business risk.
“In spite of all the headwinds around sustainability and ESG, water is actually rising on the agenda,” Ray noted. “We’ve seen a doubling of water disclosure—no matter the politics.”
That momentum isn’t just regulatory—it’s behavioral. A recent independent evaluation found that companies that disclosed consistently through CDP over a decade significantly reduced their water withdrawals. The conclusion is intuitive yet powerful: transparency drives improvement. When companies are asked to measure and report, they are more likely to act. As Ray summarized, “What gets measured gets managed.”
From Compliance to Strategy
For investors, this new era of transparency represents an opportunity to de-risk portfolios and reward preparedness. For long-horizon funds, Ray explained, “being invested in a company that’s not properly managing its environmental exposure is a red flag. But when companies identify and mitigate risks, they reassure investors that they’re managing for resilience.” Disclosure, in other words, is now a signal of operational maturity.
The companies embracing this mindset see disclosure not as a reporting burden but as a framework for introspection. The CDP process prompts them to quantify dependencies, assess vulnerabilities, and surface opportunities—insights that often lead to efficiency gains and stronger governance. “It’s the act of asking and responding that creates value,” said Ray.
But the scope of responsibility is expanding. While 70% of companies have mapped their supply chains, most stop at their direct suppliers, leaving deeper vulnerabilities unaddressed. “Very few have visibility into tiers two, three, and four, where the greatest vulnerabilities often sit,” Ray observed. For many industries, those hidden tiers are where climate volatility and water scarcity collide most severely. To bridge the gap, CDP will be adding new water questions to its existing SME questionnaire in 2026, enabling smaller suppliers to participate in water disclosure and allowing large corporations to collect comparable, decision-useful data across their value chains.
Within companies, leadership on water disclosure increasingly hinges on integration. High-performing organizations are those that embed water into governance structures, set quantifiable targets, and align sustainability data with business objectives. “Water can’t be treated as peripheral CSR—it has to sit within governance and financial planning,” Ray emphasized. Progress, he added, is often incremental: year-over-year consistency and transparent baselines matter more than one-off perfection.
A More Integrated, Technological Future
Looking ahead, Ray sees corporate water disclosure becoming increasingly interconnected—both across environmental themes and through technology. CDP’s integrated questionnaire, which aligns water, climate, and biodiversity reporting, reflects this shift toward systems thinking. “Water affects climate, which affects biodiversity,” he said. “The time has come for businesses to think holistically about their environmental relationships.”
Technology will accelerate that change. CDP is modernizing its platform and exploring how automation and AI can simplify data collection and strengthen integrity. “We know how labor-intensive disclosure can be,” Ray acknowledged. “We are absolutely all in on the technological evolution of our platform—and that includes exploring how AI can help.”
For organizations everywhere, the direction is clear: water has moved from a peripheral issue to a core element of business strategy. As climate volatility grows, regulators and investors are demanding sharper transparency. “The penny has dropped when it comes to the financial materiality of water,” Ray concluded. “If you’re not disclosing yet, you’ll be under pressure soon—from investors or regulators.”
This marks a new chapter for corporate water stewardship—one defined by integration, accountability, and measurable impact.
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