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Drought, floods and water stress cost companies $14bn

A survey of 600 global companies released at the Marrakech climate change conference shows they are still not doing enough to mitigate water risks. Droughts, water scarcity and stricter environmental regulations cost businesses a reported $14bn (£11bn) this year, up from $2.6bn in 2015. Yet companies still aren’t doing enough to protect themselves from water risks, according to a new report.

Compiled by environmental non-profit CDP and released Tuesday at the climate summit in Marrakech, Morrocco, the report approached more than 1,200 of the largest listed companies around the world in sectors exposed to water risk. Just over 600 responded, meaning the $14bn figure is likely to be hugely underreported.

The businesses, which included consumer goods giant Unilever and oil and gas company Suncor Energy, were measured on a number of factors, such as their efforts to track their water use and goal-setting to save water.

Much of the increase in spending was related to Japanese power giant Tokyo Electric Power Company (Tepco), which spent $10bn over the past year to clean up groundwater pollution from its Daiichi nuclear power plant, damaged in the 2011 tsunami.

More than a quarter of the companies said water-related issues, including floods and pollution, had affected their bottom line, typically due to higher operating costs and a disruption in production.

One of the companies, Anglo American Platinum, said it was spending millions of dollars on infrastructure at its Mogalakwena mine in South Africa to protect its water supply against shortages, including a $6m upgrade to a nearby sewage works.

“Every business in every sector needs water in some form or another,” said Morgan Gillespy, head of water at CDP. “Addressing water risks is vital for business continuity, protecting the bottom-line and to enable an effective response to climate change.”

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