$9.8trn investor initiative engages companies on water risk

Signatories commit to tackling 72 of the world's biggest water-polluting corporates

Aviva Investors, DWS and Pictet Group are among investment firms that have joined an initiative to engage 72 of the world’s biggest corporate water users and polluters.

The Valuing Water Finance Initiative, launched by the government of the Netherlands and non-profit Ceres, “provides investors with the tools required to ‘make the case’ for prioritizing water risk,” the latter said.

It launched with 64 signatories representing $9.8trn in assets under management.

“Water risk – including water scarcity, quality, and threats of floods – must be measured, disclosed and mitigated by the companies in which we invest,” said Betty Yee, controller, State of California.

The initiative sets out six science-based expectations for companies aligned with the UN Sustainable Development Goal for water. These are:

  1. Water quantity. Companies do not negatively impact water availability in water-scarce areas across their value chain. 
  2. Water quality. Companies do not negatively impact water quality across their value chain. 
  3. 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. 
  4. 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. 
  5. Board oversight. Corporate boards and senior management oversee water management efforts.  
  6. Public policy engagement. Companies ensure that all public policy engagement and lobbying activities are aligned with sustainable water resource management outcomes. 

“The water crisis is playing out across the US and around the world in many ways, from severe drought and pollution to inadequate access to safe drinking water, all of which disproportionately impact our most vulnerable communities,” said Mindy Lubber, CEO and president of Ceres.

“The private sector must recognize water’s importance for their institutions and investments lest they further expose themselves and society to increased material water risk.” 

Investor signatories have committed to engage Valuing Water Finance Initiative focus companies in: 

  • Ensuring that their current practices don’t negatively impact water quality and water availability.  
  • Integrating sound water management into business processes and governance, including board oversight and policy engagement.   
  • Securing access to water and sanitation across company value chains.  
  • Protecting ecosystems critical to the freshwater supplies that their businesses depend on. 

“The world’s fresh water supply is under severe stress in all regions, which poses risks not just to local communities, but also to those companies reliant upon water across their value chains. Investors have a critical role to play in helping companies assess those risks, and to respond to the opportunities ahead as we build resilience to climate change.” said Anne Simpson, global head of sustainability at Franklin Templeton.

“The Valuing Water Finance Initiative reflects investors’ fiduciary duty to generate sustainable risk-adjusted returns on behalf of the millions of people who rely upon those investments for their financial security.” 


Natasha Turner

Natasha was global editor at ESG Clarity, part of Mark Allen Financial, and a financial journalist for seven years. She has been shortlisted for Story of the Year and Investment Journalist of the Year...