For the past nine years, the World Economic Forum has ranked water crises in its top 5 global risks by impact, while CDP reported corporate losses of over US$30 billion due to water risks in 2018 alone. From the droughts that materially impacted Europe’s economy to the multi-million dollar impacts of water scarcity in cities like Cape Town and Chennai, water risks are increasingly impacting companies and investors around the globe.
This report Freshwater Risks & Opportunities: an Overview and Call to Action for the Financial Sector points out there has been a proliferation of tools and approaches that assign financial numbers to water risks in recent years. Along with assessing and valuing water risk, the report calls on financial institutions to mobilize finance to shift business practices, request improvements to the way in which water is handled by ESG data providers and urge regulators to strengthen water-related disclosure requirements.
The report was launched along with a series of three more detailed briefings on water risk and financial value; Linking Water Risk and Financial Value – Part I: Considerations for the financial sector, Linking Water Risk and Financial Value – Part II: Review of water risk valuation tools and Linking Water Risk and Financial Value – Part III: New valuation tool and database.