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Ceres Reports on Water Risk and Investors

Water risk is on the radar for global businesses. Ceres interviewed 35 different global asset owners to determine their thoughts on water risk and the ways they’ve been addressing it. They found that many of these companies were concerned about water risks, but only about one-third of them deeply considered it in their investment decisions. This trailing level of integration was attributed to greater attention on energy and greenhouse gases, inconsistent disclosures, and a lack of a suitable framework to reflect on water risks.

As a result of its investigation, Ceres created An Investor Handbook for Water Integration.

The Handbook gives investors a tool to integrate water risks into their overall analysis and investment decisions on ESG issues. The Handbook reviews how water risks are analyzed, goes over ways to use the data for investing, and gives suggestions for deeper strategies. Ceres outlines ways to make water risks more prominent in investments and throughout an organization.

Here are a few takeaways from the Handbook’s recommendations:

  • Simplify water risk analyses using “shadow water prices” to help moderate use.  Higher “shadow water prices” that try to account for externalized costs can be used in risk areas.
  • Use a scoring system with central and consistent scores.  Explore how monitoring is being implemented.
  • Take advantage of analysis to build client relationships and develop new products. Seize opportunities to make low-water risk exposure products.

Ceres emphasizes the intensifying pressures of water risks in the world. The Handbook provides valuable, detailed steps of what businesses can do about water risks to flourish in the future.

Get the Handbook here.

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