In this article, Riverwater Partners, a responsible investment/ESG investment advisory firm, explains why it examines water-related risk in potential investments, why it believes in a water stewardship approach and how it collaborates with The Water Council on advancing water stewardship and ESG:
Water is one of the most important natural resources on the planet. It is integral to both life on Earth and conducting business. Seventy percent of the world’s freshwater is used in agriculture, making it critical for food production. Additionally, 57 percent of CEOs who responded to the U.N. Global Compact/Accenture survey in 2022 reported that air, water, and land pollution are having a high or moderate impact on their business today.
Water stewardship ensures that resources are managed sustainably for communities and industry — making it critical for the well-being of society and business alike. Proper stewardship protects water quality and quantity, reduces the risk of water scarcity, and safeguards everyone’s access to clean water.
Responsible investment advisors should seek to understand potential water-related risks and opportunities in the areas of access, regulation, reputation and more as part of their due diligence. They can do this by using publicly available company data, third-party data, and having a dialogue with management teams to learn about the potential for water to impact the business — or for the business to impact the water supply.
At Riverwater, our engagement practice seeks to raise awareness among management teams of the potential risks and opportunities that are presented by water. We offer educational information and suggestions for best practices to companies for which water stewardship is a salient issue. This is particularly applicable for businesses that rely on water for their operations — such as food and beverage companies, manufacturing companies, and extractive companies — as well as water technology companies and utilities that may potentially benefit from a focus on stewardship.
The Water Council is a helpful resource for investors who want to learn more about water. The Milwaukee-based nonprofit has an international reputation for supporting corporate water stewardship and fostering water-related technology, both of which could interest sustainable investors. Its Water Champions program, corporate water stewardship educational site, and thought leadership events like the annual Water Leaders Summit help individuals and organizations learn, connect and collaborate on important water topics.