Thirsty Business: Global Companies Not Prepared For Looming Threat Of Water Shortage

Thirsty Business: Global Companies Not Prepared For Looming Threat Of Water Shortage

September 11, 2007

Marsh Launches Center for Risk Insights to Provide Guidance
on Business Risk Issues


    NEW YORK, Sept. 11 /Xinhua-PRNewswire/ -- With less
than three percent of the world's water now reachable and
fit for human consumption -- a figure that is shrinking --
40 percent of Fortune 1000 companies surveyed said the
impact of a water shortage would be severe or even
catastrophic.  Despite this, less than one-in-five (17%)
say they have prepared for such a crisis, according to
research sponsored by the Marsh Center for Risk Insights. 

    (Logo: 
http://www.xprn.com.cn/xprn/sa/200708011810-min.jpg ) 

    The findings are based on work conducted for the Marsh
Center by Public Opinion Strategies, an internationally
respected polling firm that spoke to senior officials from
more than 100 executive suites from a cross-section of
Fortune 1000 companies. 

    Marsh Inc., the world's leading insurance broker and
risk advisor, formed the Marsh Center for Risk Insights as
a working forum for experts to identify, debate and tackle
the most critical global business risks ¨C- with water
being one of the newest threats on the horizon. The
founding advisors of the Marsh Center, which launches
today, include:

    -- Dean Alexander, Director of the Homeland Security
Research Program
       and Assistant Professor, Homeland Security, at
Western Illinois 
       University (USA)

    -- Philip Armstrong, Head of the Global Corporate
Governance Forum 
       (South Africa)

    -- Carol Browner, Principal of The Albright Group and
former 
       Administrator of the U.S. Environmental Protection
Agency (USA)

    -- Dr. Sheikh Faisal F.J. Althani, Deputy General
Manager Anadarko 
       Petroleum Corp., (Qatar)

    -- Dr. Rohan Gunaratna, Head of Singapore's
International Centre for
       Political Violence and Terrorism Research
(Singapore)

    -- Dr. Howard Kunreuther, Co-director of the Risk
Management and 
       Decision Processes Center, Wharton School,
University of Pennsylvania
       (USA)

    -- Harvey Pitt, Chief Executive Officer of global
business consulting 
       firm Kalorama Partners and former Chairman of the
Securities and 
       Exchange Commission (USA)

    -- Andrew Winston, Founder of Winston Eco-Strategies
and co-author 
       of "Green to Gold" (USA)

    "From terrorist attacks to natural disasters to
droughts, businesses today face a new breed of risks that
can threaten supply chains, stall expansion plans and harm
profitability," said John Merkovsky, executive
director of the Marsh Center for Risk Insights.  

    Water Denial 

    Almost half of the Marsh Center survey respondents, 47
percent, said water is critical or very important to their
day-to-day operations, but only 6 percent believe it is
likely that in the next five to ten years access to water
for manufacturing and drinking will be significantly
reduced because of quality degradation or scarcity.  

    "Many corporations across seemingly unrelated
economic sectors are exposed to water scarcity and
pollution risks, usually in their supply chains," said
Ms. Browner. "Changes in our global climate, along with
rising consumption levels, will dramatically alter water
distributions and availability over the coming decades.
Businesses need to take time to identify the challenges and
opportunities posed by local and regional changes in water
availability."

    Water-related costs already are climbing, as
manufacturers must treat both source water and waste output
to improve quality. Even non-water-intensive businesses are
being affected as suppliers pass on their own water-related
costs.

    Risk Responsibility 
    
    Whether it's a loss of water, the outbreak of
potentially fatal disease or the aftermath of a terrorist
act, executives today are being tasked with risk-management
responsibilities their predecessors never faced.

    "Business leaders have a fiduciary responsibility
to their board, shareholders, employees and customers to
understand the implications of emerging threats and take
steps to address these challenges," said Mr. Pitt. 
"It's no longer acceptable for CEOs to stand up and
say, `I didn't realize it could happen' after a crisis
occurs."
    
    Other Risks Beyond Water

    Survey respondents were asked about preparedness for
eight different potential risk scenarios, including natural
disasters, terrorist attacks, oil price spikes, global
climate change, housing market collapse, risks associated
with nanotechnology, access to water and pandemics. 
Despite the growing number of threats, 44 percent of
respondents said one of the main reasons their companies
didn't bother to prepare for crisis situations because they
felt these types of risks weren't relevant.

    "A number of business leaders today are taking a
narrow view of risk and operating under the false
assumption that even though these risks are on the horizon,
they don't need to act on them promptly," said  Mr.
Kunreuther of Wharton. "While these decisions may not
affect them in their term of office, it could have dire
effects on their successors and those connected to their
companies years later."

    Complete survey results are available on the Marsh
Center for Risk Insights' Web site at
http://www.risksmarts.com .

    About the Marsh Center for Risk Insights

    The Marsh Center for Risk Insights is a growing
assembly of leading authorities on global risk issues
working to identify, debate and provide guidance on the
world's most critical business risks. An independent and
objective source of critical information and insight, the
Marsh Center does not market, promote or sell any products
or services. Please see http://www.risksmarts.com for
research, white papers, articles and information.

    About Public Opinion Strategies

    Public Opinion Strategies is a survey research company
specializing in corporate, public policy and litigation
research, with offices in Washington, Denver and Los
Angeles. Since its founding in 1991, Public Opinion
Strategies has completed more than 10,000 research projects
and interviewed more than four million Americans across the
United States. These projects have ranged in scope from
neighborhood studies to national samples in all 50 states.
Internationally, Public Opinion Strategies has completed
research projects in 18 different countries. Since Public
Opinion Strategies' roots are in political campaign
management, their research is focused on producing
information that compels decisions -- and then results.

    Survey Methodology

    On behalf of The Marsh Center for Risk Insights, Public
Opinion Strategies conducted a telephone survey of 101
C-level executives of Fortune 1000 companies, June 6-29,
2007. The list of C-Level Executive contacts was obtained
directly from Fortune.  


    For more information, please contact:

     Starry Zou
     Marketing & Communications Manager ¨C Greater
China
     Tel:   [phone]
     Email: [e-mail]