New report identifies actions for investors to address systemic water risks
Findings include seven corporate actions and investor considerations to address global water threats and reduce financial risks
pril 11, 2022 – A new report released today by the sustainability nonprofit Ceres, released in partnership with the Valuing Water Initiative, reveals how industry practices are driving five critical threats to global freshwater systems that underpin global economic and societal stability – groundwater depletion, metal contamination, plastic pollution, water diversion and transfer and eutrophication.
The Global Assessment of Private Sector Impacts on Water (“Global Assessment”) provides valuable insights to institutional investors seeking to advance corporate adaptation and innovation to systemic water and climate risks. By focusing on and investing in these challenges today, companies can substantially reduce financial risks and bottom-line losses down the road. The assessment offers detailed recommendations to help investors strategically focus engagements with the private sector and what they should expect from companies when it comes to global water threat adaptation and innovation, including via seven core actions:
- Water quantity: Ensure practices do not negatively impact water availability
- Water quality: Ensure corporate activities do not pollute local and regional water bodies
- Ecosystem protection: Ensure business activities do not degrade natural ecosystems; help restore ecosystems the business depends on
- Access to water and sanitation: Collaborate on efforts to support clean water access and sanitation in the communities in which the business operates and those it impacts
- Business integration: Integrate water-related risks and opportunities into corporate governance and decision-making at all levels across the organization; disclose comprehensive water use across the corporate supply chain
- Public policy engagement and water governance: Proactively support public policies and water governance structures that further sustainable water resource management
- Multi-stakeholder collaboration: Build, engage and invest in industry and cross-industry efforts that challenge traditional business practices and encourage both research and system-level changes
The new report analyzed scientific literature to identify the critical sectors and industries – as well as key business practices – most significantly impacting freshwater. Through a comprehensive scientific evidence and literature review, the Global Assessment helps investors connect the dots as to how these damaging impacts pose long-term financial risks, especially as population growth and climate change dramatically impact the planet. The assessment evaluates industry impacts based on severity, such as the damage caused to water resources, and the systemic nature of those impacts. It also examines the extent to which damage is affecting accessibility of other water users regionally.
“Many of the world’s largest institutional investors have yet to consider the private sector’s impact on freshwater when making investment and engagement decisions,” said Kirsten James, senior program director of water at Ceres. “The Global Assessment of Private Sector Impacts on Water makes the extent of those impacts clear for investors and outlines which industries are causing the most harm – and have the most to lose – if improvements aren’t made. Investors have a critical role to play in spurring greater corporate engagement on water stewardship, and we hope this assessment is a useful tool to help them strategically focus their efforts.”
Iris Bijlsma, Lead, Valuing Water Initiative, commenting on the report’s release said “Changing how water is valued requires collective effort and the private sector is critical to action and progress. While some companies have made progress in addressing their water impacts, system-wide change is necessary to truly mitigate the water crisis’ far reaching financial risks.”
“The Global Assessment of Private Sector Impacts on Water is the first report to clearly establish the scientific case that industry activities are leading to severe and systemic impacts to freshwater resources,” said Jay Famiglietti, director of the Global Institute of Water Security at the University of Saskatchewan which conducted the science-based research and analysis on the strong linkages between industries, their practices and threatened global water supplies. “Private sector leadership is critical to advancing global water security, and collaboration across sectors is key to reinforcing global water security, fortifying economic development and protecting the lives of millions.”
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.
About Global Institute for Water Security
The Global Institute for Water Security (GIWS) at the University of Saskatchewan is the top water resources research institute in Canada and one of the most advanced cold regions hydrology centers in the world. GIWS is dedicated to helping protect precious freshwater resources needed for the world’s growing demand for sustainable food production, mitigating the risk of water-related disasters such as floods, droughts, and fires, predicting and forecasting extreme global change through the use of advanced remote sensing and modelling techniques, and co-creating traditional knowledge with western science to empower Indigenous communities in protecting water health. www.water.usask.ca.
About Valuing Water Initiative
The Valuing Water Initiative (VWI) calls for water to be prioritised in decision making to ensure we can live in a sustainable water-secure world. VWI uses practical case studies to showcase the implementation of the United Nations Valuing Water Principles in order to bring systemic change in the way water is valued in policy, practice, finance and behaviour and to inspire others to do the same. VWI was launched at the World Economic Forum in January 2019 by Dutch Prime Minister Mark Rutte.