Valuing Water Finance Initiative signs up 89 investors with $16.7 trillion AUM to engage with
corporates on becoming better water stewards
22 March 2023, United Nations, New York – Today, at the side event “Business Leaders’ Call to Accelerate Water Action” at the UN 2023 Water Conference, Ceres, a partner of the Valuing Water Initiative, announced the Valuing Water Finance Initiative (VWFI) has signed up 89 institutional investors, representing a combined 16.7 trillion dollars of assets under management. Investor signatories to the VWFI recognize that companies have the potential to better steward and protect freshwater resources within their business operations and global supply chains to drive meaningful, global change.
he initiative is informed by a set of clear action steps called the Corporate Expectations for Valuing Water. This set of six, science-based, actionable expectations provide investors with the framework to inform their engagements to move companies to strategically address water risk, aligning with the United Nation’s 2030 Sustainable Development Goal for Water (SDG6). These collective steps include:
- Water Quantity. Companies do not negatively impact water availability in water-scarce areas across their value chain.
- Water Quality. Companies do not negatively impact water quality across their value chain.
- Ecosystem Protection. Companies do not contribute to the conversion of natural ecosystems critical to freshwater supplies and aquatic biodiversity and actively work to restore degraded habitats that their businesses depend upon.
- Access to Water and Sanitation. Companies contribute to the social, economic and ecological resilience of communities they interact with by contributing to achieving universal and equitable access to WASH across their value chain.
- Board Oversight. Corporate boards and senior management oversee water management efforts.
- Public Policy Engagement. Companies ensure that all public policy engagement and lobbying activities are aligned with sustainable water resource management outcomes.
VWFI was launched in August 2022 as an investor-led effort to engage companies with a significant water footprint to value and act on water as a financial risk and drive the necessary large-scale change to better protect water systems. While investors have made a great deal of progress in understanding the physical and financial transitional risks in their portfolios related to climate risk and acting to mitigate the risk, they have been slower to respond to the fact that water is also a systemic, global risk.
To inform investor engagements and to ensure that companies advance toward ambitious water stewardship actions, Ceres will assess and track progress on the water risk management practices of companies that align with the Corporate Expectations. Specifically, the benchmark assessment will inform investor dialogues with companies and the overall progress of VWFI by:
- Assessing alignment and gaps: Provide an assessment of the current alignment of companies to the ambitions in the Corporate Expectations.
- Informing investor engagement topics: Provide insights into where corporate action is lacking or where new, innovative ambition should be explored.
- Elevate best practices: Highlight best practices in water stewardship across and within sectors which can help illuminate opportunities for companies to elevate their ambitions to reduce their water risk.
- Tracking company progress: Serve as a tool for tracking company progress on the Corporate Expectations over time. Trends gathered will reinforce and clarify how company actions evolve to meet the Corporate Expectations.