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Water Footprints Their Impact On, And From, Corporate Reporting

Explore the impact of water footprints on corporate reporting and the potential solutions to address this issue. Learn about regulatory goals, climate change concerns, government and private sector action, SEC guidance, and sustainability reporting.

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Water Footprints Their Impact On, And From, Corporate Reporting

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  1. Water FootprintsTheir Impact On, And From, Corporate Reporting NJWEA 96th Annual Conference Issues of Emerging Concern Re-Evaluating Reuse May 12, 2011 David Restaino, Esq. Fox Rothschild LLP

  2. Water and its Regulation • Surface Water • Flooding and Stream Corridors • Wetlands • Controlling Discharges into Streams • Ground Water • Water Supply / Water Intake • Wastewater • Habitat

  3. Some Regulatory Goals • Clean and plentiful drinking water • Water for industry / water from industry • Groundwater recharge • Coastal flood protection, flood storage, unobstructed flow • Protect plants and critters • No adverse impact from one property owner upon another … no “water wars”

  4. Climate Change -Conceptual Concerns • The Climate Change Debate • “Unequivocal Proof” (2007 UN Report) • “Hottest Year in the Hottest Decade” (Climate Progress, 7/28/10) • “Your unsupported findings … threaten to usurp state enforcement authority[.]” (8/2/10 letter from Texas to USEPA) • Scientific Concerns (accurate data, etc.) • Potential Solutions • Government action • Private investment • Public and private contractors • Corporate policies • Act local, think global

  5. Potential Solutions • Private investment • Public and Private Contractors • Corporate policies • Securities & Exchange Commission (SEC) Guidance • Sustainability and ISO 26000 (Guidance on Social Responsibility) • Act Local, Think Global • Call in the Lawyers • Litigation • Challenge the Regulations • Not “If” But “How” • Government action • Regulation • Government Energy Usage

  6. Government & Other ActionIn Response To Climate Change • United Nations, global & regional initiatives • American Recovery & Reinvestment Act of 2009 • Clean energy incentives • USEPA Greenhouse Gas Regulations • Endangerment finding … upheld in court • Tailoring Rule … under attack • USEPA permit requirements … will states acquiesce? • State action – varied • Private action – “nuisance” lawsuits, etc.

  7. Enough About Air … … What about Water?

  8. Water Footprints & Corporate Policies • How We Got Here • Securities and Exchange Commission (SEC) Guidance (Feb. 2010) • For Publicly Traded Corporations • Shareholder Lawsuits • Internal Management • Track and Disclose Climate Change Impacts • Air and Water and ? • Water Risk Component • Discharges • Supply

  9. SEC Guidance • Disclosure of Water Footprint and the Financial Impact • Regulatory exposure … and opportunity • Volume used • Resource cost & availability • Recharge, and volume remaining • Salt-water intrusion • Discharge • Weather • Sea-level rise • Risk to facilities • Lawsuits • Insurance coverage • Financial implications

  10. SEC Guidance • Thorough Assessment of a Complete Water Footprint • Information readily available • Actual data • Modeling data • Statistical analysis of data • Future predictions • Calculating the financial impact, or, disclosing why the impact can’t be quantified • Is the impact “material”?

  11. Sustainability and ISO 26000 • ISO 26000 - Guidance on Social Responsibility • Publication – November 1, 2010 • Guidelines, Not Requirements • Intended for Application to Organizations and Their Sphere of Influence • Social Responsibility • Human Rights • Labor Practices • The Environment • Fair Operating Practices • Consumer Issues • Community Involvement & Development

  12. ISO 26000 • Defines The Environment as a Core Subject, and Goes Beyond Laws & Regulations • Precaution – Scientific Uncertainty is No Excuse For Postponing Cost-Effective Measures • Risk Management – Use a Sustainability Perspective, Including in Procurement • “Polluter Pays” – Costs of Activities, Products and Services • Life-Cycle Thinking – Use Sustainable Resources • Climate Change – Mitigation and Adaptation • Marketplace impact?

  13. SEC and ISO • How Much Difference Will These Make? • Different Areas, Same Concepts • Contracts • Will Help Reduce Water Footprints • Performance and Performance Metrics • Necessary to measure the benefit • Who measures? • Time / Cost • Incentives • Maintenance • How to maintain the benefits gained; no back-sliding • Insurance

  14. Sustainability Reporting • 2009 Sustainability Reporting of the World’s Largest Pharma Companies (Roberts Environmental Center) • Scored companies in the pharma sector • Top scorers: extensive reports & web disclosure • Low scorers: rarely mention corporate responsibility • Some correlation between score & annual revenue

  15. Sustainability Reporting • Environmental categories include: • Emissions to water • Energy • Recycling • Waste water released and/or recycled • “Green” purchasing

  16. Water Footprints & Corporate Policies • Flowing up the “Supply Chain” • Supply Chain agreements • Trickling Down into Distribution • Investor & Financing Agreements • Impact on Suppliers and Distributors • Global Impact?

  17. Practicalities of Coordinating a Solution #1 • Contracts • Experience • Guaranteed Performance? • Time and Cost • How Much? How Long? • Performance Metrics / Measuring Performance • Certifications, gallons saved, etc.

  18. Practicalities of Coordinating a Solution #2 • Post-Construction Issues • Maintenance • Who monitors, moving forward? • Legal Compliance • Who is “legally responsible”?

  19. Sustainability • Global Thinking … Local Action? • Planning • Accounting for Climate Change in Local Land Use Decisions … for example, water infrastructure projects • Addressing Sustainability in Leases & Contracts • Defining Objectives / Guarantees • Performance Metrics • Certifications and Proofs • Maintenance • Insurance • Confidentiality

  20. Final Pieces to Coordinating a Solution? • Insurance Portfolio • Can Insurance Help “Backstop” Performance? • Construction, General Liability, Professional Liability, Pollution Coverage, Green Upgrades / Rebuilds • Exclusions, Primary v. Excess Coverage, Additional Named Insured • Claims-Made or Occurrence-Based • Coverage Amount • Will We See New Insurance Products? • Services Industry … Contractors • Uncertainties … Lawsuits, Elections

  21. Contact Information David Restaino, Esq. Fox Rothschild LLP 609.895.6701 drestaino@foxrothschild.com

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