Water Footprints Their Impact On, And From, Corporate Reporting NJWEA 96 th Annual Conference Issues of Emerging Concern Re-Evaluating Reuse May 12, 2011.

Water FootprintsWater Footprints

Their Impact On, And From, Corporate ReportingTheir Impact On, And From, Corporate Reporting

NJWEA 96NJWEA 96thth Annual Conference Annual Conference

Issues of Emerging ConcernIssues of Emerging Concern

Re-Evaluating ReuseRe-Evaluating Reuse

May 12, 2011May 12, 2011

David Restaino, Esq.David Restaino, Esq.

Fox Rothschild LLPFox Rothschild LLP

Water and its RegulationWater and its Regulation

Surface WaterSurface Water Flooding and Stream CorridorsFlooding and Stream Corridors WetlandsWetlands Controlling Discharges into StreamsControlling Discharges into Streams

Ground WaterGround Water Water Supply / Water IntakeWater Supply / Water Intake WastewaterWastewater HabitatHabitat

Some Regulatory GoalsSome Regulatory Goals

Clean and plentiful drinking waterClean and plentiful drinking water Water for industry / water from industryWater for industry / water from industry Groundwater rechargeGroundwater recharge Coastal flood protection, flood storage, Coastal flood protection, flood storage,

unobstructed flowunobstructed flow Protect plants and crittersProtect plants and critters No adverse impact from one property No adverse impact from one property

owner upon another … no “water wars”owner upon another … no “water wars”

Climate Change -Climate Change -Conceptual ConcernsConceptual Concerns

The Climate Change DebateThe Climate Change Debate ““Unequivocal Proof” (2007 UN Report)Unequivocal Proof” (2007 UN Report) ““Hottest Year in the Hottest Decade” (Climate Progress, 7/28/10)Hottest Year in the Hottest Decade” (Climate Progress, 7/28/10) ““Your unsupported findings … threaten to usurp state Your unsupported findings … threaten to usurp state

enforcement authority[.]” (8/2/10 letter from Texas to USEPA)enforcement authority[.]” (8/2/10 letter from Texas to USEPA) Scientific Concerns (accurate data, etc.)Scientific Concerns (accurate data, etc.) Potential SolutionsPotential Solutions

Government actionGovernment action Private investmentPrivate investment

• Public and private contractorsPublic and private contractors Corporate policiesCorporate policies Act local, think globalAct local, think global

Potential SolutionsPotential Solutions Private investmentPrivate investment

Public and Private ContractorsPublic and Private Contractors Corporate policiesCorporate policies

Securities & Exchange Commission (SEC) GuidanceSecurities & Exchange Commission (SEC) Guidance Sustainability and ISO 26000 (Guidance on Social Responsibility)Sustainability and ISO 26000 (Guidance on Social Responsibility)

Act Local, Think GlobalAct Local, Think Global Call in the LawyersCall in the Lawyers

LitigationLitigation Challenge the RegulationsChallenge the Regulations Not “If” But “How”Not “If” But “How”

Government actionGovernment action RegulationRegulation Government Energy UsageGovernment Energy Usage

Government & Other ActionGovernment & Other ActionIn Response To Climate ChangeIn Response To Climate Change

United Nations, global & regional initiativesUnited Nations, global & regional initiatives American Recovery & Reinvestment Act of 2009American Recovery & Reinvestment Act of 2009

Clean energy incentivesClean energy incentives

USEPA Greenhouse Gas RegulationsUSEPA Greenhouse Gas Regulations Endangerment finding … upheld in courtEndangerment finding … upheld in court Tailoring Rule … under attackTailoring Rule … under attack USEPA permit requirements … will states acquiesce?USEPA permit requirements … will states acquiesce?

State action – variedState action – varied Private action – “nuisance” lawsuits, etc.Private action – “nuisance” lawsuits, etc.

Enough About Air …Enough About Air …

… … What about Water?What about Water?

Water Footprints & Water Footprints & Corporate PoliciesCorporate Policies

How We Got HereHow We Got Here Securities and Exchange Commission (SEC) Securities and Exchange Commission (SEC)

Guidance (Feb. 2010)Guidance (Feb. 2010) For Publicly Traded CorporationsFor Publicly Traded Corporations

• Shareholder LawsuitsShareholder Lawsuits• Internal ManagementInternal Management

Track and Disclose Climate Change ImpactsTrack and Disclose Climate Change Impacts Air and Water and ?Air and Water and ?

Water Risk ComponentWater Risk Component DischargesDischarges SupplySupply

SEC GuidanceSEC Guidance

Disclosure of Water Footprint and the Financial ImpactDisclosure of Water Footprint and the Financial Impact Regulatory exposure … and opportunityRegulatory exposure … and opportunity Volume usedVolume used Resource cost & availabilityResource cost & availability Recharge, and volume remainingRecharge, and volume remaining Salt-water intrusionSalt-water intrusion DischargeDischarge WeatherWeather Sea-level riseSea-level rise Risk to facilitiesRisk to facilities LawsuitsLawsuits Insurance coverageInsurance coverage Financial implicationsFinancial implications

SEC GuidanceSEC Guidance

Thorough Assessment of a Thorough Assessment of a CompleteComplete Water FootprintWater Footprint Information readily availableInformation readily available

Actual dataActual data Modeling dataModeling data Statistical analysis of dataStatistical analysis of data Future predictionsFuture predictions

Calculating the financial impact, or, disclosing Calculating the financial impact, or, disclosing why the impact can’t be quantified why the impact can’t be quantified

Is the impact “material”?Is the impact “material”?

Sustainability Sustainability and ISO 26000and ISO 26000

ISO 26000 - Guidance on Social ResponsibilityISO 26000 - Guidance on Social Responsibility Publication – November 1, 2010 Publication – November 1, 2010 Guidelines, Not RequirementsGuidelines, Not Requirements Intended for Application to Organizations Intended for Application to Organizations andand Their Their

Sphere of InfluenceSphere of Influence Social ResponsibilitySocial Responsibility

Human Rights Human Rights Labor PracticesLabor Practices The EnvironmentThe Environment Fair Operating PracticesFair Operating Practices Consumer IssuesConsumer Issues Community Involvement & DevelopmentCommunity Involvement & Development

ISO 26000ISO 26000

Defines The Environment as a Core Subject, Defines The Environment as a Core Subject, and Goes Beyond Laws & Regulationsand Goes Beyond Laws & Regulations Precaution – Scientific Uncertainty is No Excuse For Precaution – Scientific Uncertainty is No Excuse For

Postponing Cost-Effective MeasuresPostponing Cost-Effective Measures Risk Management – Use a Sustainability Perspective, Risk Management – Use a Sustainability Perspective,

Including in ProcurementIncluding in Procurement ““Polluter Pays” – Costs of Activities, Products and Polluter Pays” – Costs of Activities, Products and

ServicesServices Life-Cycle Thinking – Use Sustainable ResourcesLife-Cycle Thinking – Use Sustainable Resources Climate Change – Mitigation and AdaptationClimate Change – Mitigation and Adaptation

Marketplace impact? Marketplace impact?

SEC and ISOSEC and ISO How Much Difference Will These Make?How Much Difference Will These Make? Different Areas, Same Concepts Different Areas, Same Concepts

ContractsContracts Will Help Reduce Water FootprintsWill Help Reduce Water Footprints Performance and Performance MetricsPerformance and Performance Metrics

• Necessary to measure the benefitNecessary to measure the benefit• Who measures?Who measures?

Time / CostTime / Cost IncentivesIncentives MaintenanceMaintenance

• How to maintain the benefits gained; no back-slidingHow to maintain the benefits gained; no back-sliding InsuranceInsurance

Sustainability ReportingSustainability Reporting

2009 Sustainability Reporting of the 2009 Sustainability Reporting of the World’s Largest Pharma Companies World’s Largest Pharma Companies (Roberts Environmental Center)(Roberts Environmental Center)

• Scored companies in the pharma sector Scored companies in the pharma sector • Top scorers: extensive reports & web disclosureTop scorers: extensive reports & web disclosure• Low scorers: rarely mention corporate Low scorers: rarely mention corporate

responsibilityresponsibility• Some correlation between score & annual revenueSome correlation between score & annual revenue

Sustainability ReportingSustainability Reporting

Environmental categories include: Environmental categories include: Emissions to waterEmissions to water EnergyEnergy RecyclingRecycling Waste water released and/or recycledWaste water released and/or recycled ““Green” purchasingGreen” purchasing

Water Footprints Water Footprints & Corporate Policies& Corporate Policies

Flowing up the “Supply Chain”Flowing up the “Supply Chain” Supply Chain agreementsSupply Chain agreements

Trickling Down into DistributionTrickling Down into Distribution Investor & Financing AgreementsInvestor & Financing Agreements Impact on Suppliers and DistributorsImpact on Suppliers and Distributors Global Impact?Global Impact?

Practicalities of Practicalities of Coordinating a Solution #1Coordinating a Solution #1

ContractsContracts Experience Experience Guaranteed Performance?Guaranteed Performance? Time and CostTime and Cost

• How Much? How Long?How Much? How Long? Performance Metrics / Measuring Performance Metrics / Measuring

Performance Performance • Certifications, gallons saved, etc.Certifications, gallons saved, etc.

Practicalities of Practicalities of Coordinating a Solution #2Coordinating a Solution #2

Post-Construction IssuesPost-Construction Issues MaintenanceMaintenance

• Who monitors, moving forward?Who monitors, moving forward? Legal Compliance Legal Compliance

• Who is “legally responsible”?Who is “legally responsible”?

SustainabilitySustainability Global Thinking … Local Action?Global Thinking … Local Action? PlanningPlanning

Accounting for Climate Change in Local Land Use Accounting for Climate Change in Local Land Use Decisions … for example, water infrastructure Decisions … for example, water infrastructure projectsprojects

Addressing Sustainability in Leases & ContractsAddressing Sustainability in Leases & Contracts Defining Objectives / GuaranteesDefining Objectives / Guarantees Performance MetricsPerformance Metrics Certifications and ProofsCertifications and Proofs MaintenanceMaintenance InsuranceInsurance ConfidentialityConfidentiality

Final Pieces to Final Pieces to Coordinating a Solution?Coordinating a Solution?

Insurance PortfolioInsurance Portfolio Can Insurance Help “Backstop” Performance?Can Insurance Help “Backstop” Performance? Construction, General Liability, Professional Liability, Construction, General Liability, Professional Liability,

Pollution Coverage, Green Upgrades / RebuildsPollution Coverage, Green Upgrades / Rebuilds Exclusions, Primary v. Excess Coverage, Additional Exclusions, Primary v. Excess Coverage, Additional

Named InsuredNamed Insured Claims-Made or Occurrence-BasedClaims-Made or Occurrence-Based Coverage AmountCoverage Amount Will We See New Insurance Products?Will We See New Insurance Products?

Services Industry … ContractorsServices Industry … Contractors Uncertainties … Lawsuits, Elections Uncertainties … Lawsuits, Elections

Contact InformationContact Information

David Restaino, Esq.David Restaino, Esq.

Fox Rothschild LLPFox Rothschild LLP

609.895.6701609.895.6701

[email protected]@foxrothschild.com