WATER RISK TOOLS FOR INVESTORS

Incorporating notions of water risk and water stewardship into your portfolio is more important than ever. However, a lack of information, or method of navigating available information, can make this a tricky task. Here are a few tools to help the conscientious investor integrate water sustainability into the decision-making process. 

CDP Water Disclosure

CDP pushes companies to disclose comprehensive details and targets regarding their water management, fostering accountability and transparency within water stewardship. For investors, CDP provides critical environmental data on disclosing companies, in order to integrate sustainability within the investment process.

https://www.cdp.net/en/water

The Ceres Investor Water Toolkit

Essentially a how-to-guide for investors to understand how to integrate water risk into their portfolio management. Includes an array of useful information and frameworks for assessing water risk, establishing priorities, and engaging with companies, as well as providing comprehensive case studies to help the investor develop a water-sustainable portfolio.

https://www.ceres.org/resources/toolkits/investor-water-toolkit?toolkit=view

Ceres’ Aqua Gauge

For investors, Aqua Gauge includes a downloadable, Excel-based tool and associated methodology that allows investors to evaluate, scorecard and compare a company’s water management activities against informed criteria of leading practice, based on a company’s publicly available information.

https://www.ceres.org/resources/tools/ceres-aqua-gauge-comprehensive-assessment-tool-evaluating-corporate-management

The World Resources Institute’s ‘Aqueduct’ Tool

Provides interactive layered maps which allow investors to assess water risk based on region of operation and sector, as well as by type of stress (physical risk to quantity, physical risk to quality, regulatory and reputational risk). Aqueduct also provides projected water stress data (change in seasonal variability, water supply and demand) with climate scenarios by outlook (optimistic, business as usual, or pessimistic). An engaging and easy-to-use tool, particularly for assessing regions and sectors.

https://www.wri.org/our-work/project/aqueduct/

The World Wildlife Fund’s Water Risk Filter

Provides interactive world maps with a comprehensive set of risk layers (physical, regulatory, reputational, and a series of specific environmental risks). Also provides an assessment tool allowing investors to assess a company’s water risk based on both the relevant river basin (though only a select number of river basins’ data is available), and the nature of operations. Risks can then be analysed visually, and the user can be directed to a customized set of risk responses. Also developing a value tool, which will allow investors to calculate the financial implications of water risk.

http://waterriskfilter.panda.org/

Emily Faithfull

Author: Emily Faithfull