Thirsty Business: Global Companies Not Prepared for Looming Threat of Water Shortage



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

    NEW YORK, September 6 /CNW/ - 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.

    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 - 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 short term 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 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
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 further information:

For further information: Marsh Inc. Neal McGarity, 212-345-1470 Mobile:
347-324-8055 Neal.McGarity@marsh.com

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THE MARSH CENTER FOR RISK INSIGHTS

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