By Sanjeev Sharma New Delhi, Sep 28 : An analysis of 500 listed Indian corporates shows that four out of five companies have inadequate water-related disclosures. According to research by Jefferies University, an executive-level education programme of the global stock broking firm, of the 500 companies analysed, only 49 made a quantified disclosure on water in their 2019 reporting, of which 16 are part of Nifty 50 companies. "Indeed, we found that (around) 80 per cent of companies had inadequate disclosures. However, several companies did have a better disclosure quality," the research said. The analysis suggests that the top 10 companies with respect to the quality and depth of their respective water related disclosures, in alphabetical order, are ACC, Ambuja Cement, Ashok Leyland, Brigade Enterprises, Infosys, ITC, Kansai Nerolac Paints, Maruti Suzuki, Tech Mahindra and Wipro. Given the lack of detailed guidelines from Indian regulators on water-related disclosures, the research studied a combination of global and Indian best practices for the same. For analysis of corporate India, it ranked top 500 companies by market cap on several water disclosure-related parameters. A call for boosting disclosures is based on the belief that measurement can start driving improvements. Infosys, for example, has seen per capita water consumption decline to nearly a third of what it used to be a decade back. Reliance Industries is recycling 23 per cent more water now than it did a decade back. Adani Ports is sourcing more than 20 per cent of its water requirements from third-party treated wastewater in FY20 vs. under 5 per cent less than five years back, the report said. Water availability can hit companies that are not obvious consumers of water as a raw material. For example, for the three leading IT companies in India (TCS, Infosys and Wipro), the municipal source of water is able to meet only 40-68 per cent of the total water needed. Almost 5-14 per cent of the water is sourced from the internal groundwater source/ borewell. Tankers, private providers and third party sources supply 22-52 per cent of the total water withdrawal by the three IT companies. The groundwater source as well as tanker water source are indeed a vulnerable source of water, the research notes. In India, the SEBI mandates that the annual report of the top 500 companies by market capitalisation carries a section on Business Responsibility Reporting (BRR). Only one question in the BRRs directly relates to disclosures regarding water. Quantified disclosures aren't mandated as such by Indian regulators but are optional as part of BRR. One of the top 500 market cap companies in India stated in its 2019 annual report: "India has one of the lowest costs when it comes to labour, power and water across the globe." Unfortunately, low cost of water is not a competitive advantage of India; rather a reliable good quality water supply would make India more competitive in the global arena, the report said. Apart from freshwater availability, investors also need to assess the risks associated with closure of the investee company operations if the wastewater is not properly discharged. The Telangana State Pollution Control Board had issued closure notices to nine pharma firms located in an industrial park on allegation of unsafe disposal of pollutants. It was alleged that these pharma companies had been injecting polluted water into the ground, thereby polluting the groundwater and rendering it unfit for drinking as well as irrigation usage by the locals. A large chunk of companies had a "Score" of less than 4 out of 10. Most of them did not have a Sustainable Reporting or Integrated Reporting other than their Business Responsibility Reporting. However, the companies make a conscious choice as to how much they want to discuss in the annual report as well as through their BRRs about their water security. For example, in BRR, there is only one direct question on water but that solitary question is optional. Less than 15 companies answered this optional question with a valid statistic. Less than 15 companies provided any kind of tangible statistics in their BRR about water withdrawal, water consumption or water discharge. Many banks felt that water is not critical to their operations and hence they do not disclose any water-related statistics or have zero water-related discussions in their reports. However, there are exceptions like Kotak Bank, which discloses its own total water consumption; Mahindra Finance which gives its water withdrawal by source; and Axis Bank which discusses the Sustainable Lending Policy & Procedures for the real estate borrowers who may be using groundwater. Admittedly, there are a set of companies that may not have material risk from water related issues and hence they will disclose less and discuss less about the water in their reporting. "Close to 80 per cent of the companies got a score less than 4 and we find it difficult to believe that all these companies have low material risk from water," the report said. It added that it was not uncommon to find that a few mega-billion market cap companies have no mention of the words sustainability or water in their annual reports. Some of the potential large users of water did not mention the water withdrawal by their source. In water reporting by an industrial major company that is among the top 20 market capitalisation in India, there was a lack of clarity about sources of its water. This company disclosed that more than 40 per cent of the freshwater source is from "other sources" though the "other source" was not defined. Probably, it would be prudent to discuss the risks associated with the "other source", especially when it is such a dominant share of water source. A large textile company states that "by using water recycling and reuse technologies, a total of 6,920 million m3 of water was recycled in 2018 - equivalent to New York city's water consumption for 5 years". This report opines that such a claim needs to be re-checked. "To provide context we note that the largest user of water in the listed space in India is NTPC, which withdrew 593 million cu metres of water in 2019," it added. Less than 10 per cent of the total sample companies or 49 companies disclosed their total volume of water withdrawn or consumed in 2019. The total volume of water withdrawn or consumed by these 49 companies in 2019 was 1.52 BCM. As per the Central Water Commission, India's estimated industrial water demand including energy was 56 BCM in 2010 and is expected to increase to 151 BCM in 2050 (CWC, 2014). WRG estimates that India's industrial demand for water in 2030 will be 195 BCM. The water withdrawn or consumed by these 49 companies in 2019 is 1.3 per cent of India's estimated industrial demand in 2020 by WRG, the report adds. (Sanjeev Sharma can be reached at sanjeev.s@ians.in) /IANS