Bridging gaps in ESG water data offers new opportunities for investors

Posted on March, 21 2022

When it comes to mainstream ESG water data, investors currently lack contextual focus and common definitions. Limited information on value chains means data is often lacking or misinterpreted, resulting in a narrow understanding of water, both in terms of risks and opportunities.
Containing insights from both investors and water experts, a new report from WWF, Deltares, and Achmea, Bridging the Gaps in ESG Water Data to Create Opportunities - A Discussion Paper for Investors, provides a snapshot of the main limitations around water in current ESG approaches and provides recommendations on next steps.

Over the past decade water-related risks have consistently emerged near the top of the list of globally faced risks listed in the World Economic Forum’s Global Risk Report.

Investors and their data providers have traditionally approximated portfolio water risks by reviewing basin water stress and water use efficiency. These two metrics formed the basis of efforts to integrate water within ESG and shareholder engagement - but they represent too narrow a view of water risk.

Water data needs to be more detailed for several reasons - because water risks include a much broader set of dynamics, such as water scarcity, quality, and access. Also, traditional metrics used in ESG integration do not account for water dynamics in time and space, and it is critical to understand supply chain and local contexts. In addition, 'cascading risks' - where one risk affects or creates new risks - are ignored, which is of critical concern given what happens upstream in a basin affects what happens downstream.

There is a need for aligned methods and metrics for water data that comprehensively cover all dimensions of water-related risks, and response. This should go hand-in-hand with the development of asset-level data and developing insights into local cascading water risks.

Improving water risk management will enable investors to act on all water risks and identify new opportunities. And the growing focus on context-specific water risks, along with better data, promises stronger ESG performance.

ESG & Water Webinar

March 24th 2022, 16.00 CET

Join WWF, Deltares and Achmea IM as we present our latest report on water risks for investors. During the session we will provide an overview of the report followed by a panel discussion with insights from investors, corporates, and water experts. We welcome audience participation.

Moderator: Jacqueline Duiker, VBDO

Alexis Morgan: Global Water Stewardship Lead, WWF

Nadja Franssen: Responsible Investment Officer, Actiam
Frank Wagemans: Sr. Engagement Specialist, Achmea IM
Kata Molnar: Water Thematic Expert, Sustainalytics-Morningstar

Register for the webinar here.

Bridging the Gaps in ESG Water Data to Create Opportunities for Investors