November 15, 2018 

Dear Company 

We, the undersigned investors, with $6 trillion in total assets under management/advisement, believe that sustainable water resource management, including protecting water resources and securing the human right to water, is a critical aspect of risk oversight in the energy sector. For this reason we are writing to request that [Company] report on its water use through CDP’s Water Questionnaire. 

The World Economic Forum consistently rates water crises among the top five global risks facing society. Water is a growing challenge for the oil and gas industry. Oil and gas production is increasingly reliant on access to water, and water sources are already scarce in key production areas. Further, oil and gas production produces large volumes of wastewater that need to be managed.^[1]  Companies such as [Company] may be exposed to a range of physical, regulatory, reputational and community impact risks, which can have profound near-term business impacts such as disruption of operations and supply chains, increasing capital expenditures and operating costs, and constraining revenue growth. For example, Enbridge reported to CDP that it has spent more than US$2.88 billion over three years to prevent spills and leaks from its Liquid Pipeline networks to a watercourse.^[2] 

Companies that are able to efficiently manage and reduce their impacts on water resources will have  competitive advantages in a world where water is increasingly water-constrained and contaminated. 

Robust and comparable water disclosure from oil and gas companies is crucial to investors’ understanding of company performance and long-term resiliency. Earlier this year your company received a request for CDP reporting on water-related risk on behalf of over 650 global investors, including the investors signing this letter. [Company] did not respond to this investor request in CDP's 2018 disclosure cycle. We are again seeking your commitment to respond to this information request in 2019 in order to understand the company’s exposure to water-related risks and its mitigation strategies to reduce those risks. 

CDP offers a standardized and comparable water framework that enables investors to benchmark performance in the oil and gas industry. Many of your peers already respond to the CDP water information request, such as Anadarko, EOG Resources, Enbridge, Encana, Occidental and Suncor. In 2018, CDP moved towards sector-specific water disclosure for the oil and gas industry. This will improve investors’ ability to compare oil and gas peers on key best practice metrics for the sector. 

A complete response is requested, however should you wish to take a staged approach to disclosure, priority CDP indicators for the undersigned investors are detailed below: 

1. The company’s exposure to current and future water-related risks with the potential to have a substantive financial or strategic impact on your business, including regional areas of concern and detailed description of the risks;
2. The company’s water policy that sets out clear goals and guidelines for action;
3. Company-wide targets (quantitative) or goals (qualitative) related to water, and any contextual information on how well the goals match the scale of water risks and challenges;
4. Company-wide data on water withdrawals, water consumption, wastewater management and disposal risks and strategies, and major sources of water and means of disposal or discharge;
5. How the company has integrated water into its business strategy;
6. The company’s water-related risk assessment procedure, coverage, scale, frequency, and time frame considered; and,
7. The highest level of direct responsibility for water within the company including if there is board-level expertise on environmental or water issues.

Companies that respond to the questionnaire signal to investors that they are strategically measuring and managing water-related risks. 

We value your thoughts on this letter and would appreciate receiving notification of [Company] intent to respond to our request to disclose to the 2019 CDP Water Questionnaire by January 5, 2019 or immediately following your next Board meeting.