Testing the water
While data is still limited, fund managers’ engagement
on water risk is evolving. Natalie Kenway reports
Water has been making headlines. Whether it’s the cancellation of test events for water sports at the upcoming Paris Olympics or an outbreak of cryptosporidium cases in the southwest of the UK, water quality and water scarcity is getting
much-needed coverage.
Safely managed sanitation is unavailable for
3.5 billion people
Source United Nations
Source United Nations
In 2022, 2.2 billion people lacked
safely managed drinking water
Source United Nations
Water is a basic human right but still out of reach for billions of people
Companies have taken
a reactive approach to water impact, which may need to change’
‘
A simple way of thinking about it is – there is no economy without water’
‘
Click to read about Castlefield’s water engagement
Click to read more on water risk
cover story
How Castlefield is leading on water engagement
Different types of water risk
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Saurabh Sharma,
fund manager, Regnan
Author name
“As part of the most recent Carbon Disclosure Project (CDP) campaign, we engaged with Spectris, a high-tech instruments and equipment provider, which had not previously submitted water security data to CDP. The campaign seeks to only engage companies on material themes, and following our engagement we were pleased to see Spectris had disclosed. This year, there are plans for us to once again be the lead investor for several of our investee companies on water.
Physical water risk, or the exposure to changes in water quantity (such as droughts or floods), will impact sectors that rely on physical assets, such as real estate and infrastructure. Other sectors like textiles, fashion, food, pharmaceuticals and semiconductors are more sensitive to water quality. Agriculture is very sensitive to water scarcity.
Véronique Chapplow, investment specialist, T Rowe Price
Sector nuances