Institutional investors from around the world joined Ceres in launching the Valuing Water Finance Initiative, a new effort to engage 72 corporate water users and polluters to value and act on water as a financial risk and drive the necessary large-scale change to better protect water systems. The initiative is the only global investor-led initiative aimed at moving companies to respond to the global water crisis.
The Ceres Valuing Water Finance Initiative offers the most comprehensive and ambitious guidelines available to investors while also considering the full suite of water-related issues, from water availability and quality to board oversight and public policy engagement. Signatories at launch include financial institutions such as pension funds, mainstream asset owners and socially responsible investors spanning the globe; click here to see the full list of focus companies Ceres is engaging through this initiative.
The Ceres Valuing Water Finance Initiative raises the profile of fresh water as the world’s most precious natural resource and its essential role in industries, communities, and ecosystems and provides investors with the tools required to “make the case” for prioritizing water risk. The initiative prioritizes a set of six science-based, actionable Corporate Expectations for Valuing Water, which is informed by scientific evidence that aligns with the United Nation’s 2030 Sustainable Development Goal for Water (SDG6) and supports the aims of the Ceres Roadmap 2030. The expectations lay out clear action steps for focus companies and set the stage for investor engagement focused on collective progress:
- 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.
"The water crisis is playing out across the U.S. 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. We are grateful to see so many investors signing on to the Ceres Valuing Water Finance Initiative at its launch, but we need more investors to step up and join us in supporting the Corporate Expectations for Valuing Water and engaging with the companies they own on water stewardship.”
The initiative is the only global investor-led initiative aimed at moving companies to respond to the global water crisis
The initiative and expectations were guided by an advisory council of major investors including members of the Valuing Water Finance Task Force and other investor and NGO partners, signaling capital market support for properly valuing water and centering the need for sustainable water management among corporations. Task Force members include ACTIAM, AustralianSuper, California State Controller Betty T. Yee, New York City Comptroller Brand Lander and PGGM Investments, among others. To see the full list of investor signatories, click here.
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, Ceres Board Member and 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. Benjamin Franklin wisely commented that ‘when the well is dry, we know the worth of water.’ We are perilously close to that point and as fiduciaries must act.”
“The global water crisis has been exacerbated by industrial and agricultural systems that pollute freshwater resources. If these risks are not mitigated the potential financial impact on companies and their shareholders are huge,” said John Anzani at the Local Authority Pension Fund Forum. “Institutional investors cannot meet their fiduciary obligations without factoring water into their engagement strategies. It’s never been more imperative that companies achieve sustainable water management through intentional use, pollution reduction, governance and other strategies.”
“Private sector involvement is critical to our ability to better manage and protect global water resources,” said Iris Bijlsma, Lead for the Valuing Water Initiative, an effort of the Government of the Netherlands to bring about the systemic change needed to appropriately value water. “The Valuing Water Finance Initiative engagement and its Corporate Expectations provide investors the framework they will need to move companies to better prioritize water and understand its material, reputational, regulatory and legal risks.”
The Valuing Water Finance Initiative builds on Ceres’ work over more than a decade to build the scientific and financial cases for investor water action and draw attention to the water crisis’ risks. Its development was informed by Ceres’ robust library of investor-centric resources, including the Ceres Investor Water Hub, Ceres Investor Water Toolkit and The Global Assessment of Private Sector Impacts on Water, a report released earlier this year which reveals how industry practices are driving five critical threats to global freshwater systems and undermining the functionality of global freshwater systems that underpin global economic and societal stability.