Corporate Water Risk: A Critique of Prevailing Best Practice
Journal of Management and Sustainability, Vol. 4, No. 1, 2014
18 Pages Posted: 26 Feb 2014
Date Written: December 13, 2013
This paper considers corporate water risk from the perspective of company disclosure. An empirical study, it reviews 6 years’ disclosure for 58 companies in the global consumer staples sector. Drawing on a conceptual framework of institutional theory and resource dependence, it examines the disclosed yardsticks by which multinational companies measure their management of water risk. The first empirical study of its kind, it suggests that companies target future improvements that are generally less aspirational than their historic achievements. This appears to be a function of diminishing marginal returns on efficiency investment, exacerbated by a rational reluctance to venture beyond the 'fence line'. The evidence suggests that corporate water risk is increasingly viewed as a political rather than operational issue within the disclosure matrix. Current perceptions of best practice are entrenching a status quo that is fundamentally unfit for purpose given the scale of the challenges that need to be addressed over the rest of this decade, and beyond.
Keywords: water risk, corporate disclosure, resource dependence, enterprise, environment
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