A new report released today by the sustainability nonprofit Ceres reveals how industry practices are driving five critical threats to global freshwater systems — groundwater depletion, metal contamination, plastic pollution, water diversion and transfer and eutrophication.
The analysis also makes clear that 12 key industries within seven sectors stand out as the biggest contributors to these threats, undermining the functionality of global freshwater systems that underpin global economic and societal stability.
The Ceres report, “The Global Assessment of Private Sector Impacts on Water,” was released in partnership with the Valuing Water Initiative, a Dutch government program.
The report shares insights for institutional investors seeking to advance corporate adaptation to pressing systemic water and climate threats. By focusing on and investing in these challenges today, companies can substantially reduce financial risks and bottom-line losses down the road.
The assessment offers a practical set of recommendations for the private sector. It was developed in partnership with the Global Institute for Water Security (GIWS) at the University of Saskatchewan in Canada, which conducted the science-based research and analysis on the strong linkages between industries, their practices, and threatened global water supplies.
The new report analyzes scientific literature to identify the critical sectors and industries — as well as key business practices — most significantly impacting freshwater. Through a comprehensive scientific evidence and literature review, the Global Assessment helps investors connect the dots as to how these damaging impacts pose long-term financial risks, especially as population growth and climate change dramatically impact the planet.
The assessment evaluates industry impacts based on severity, such as the damage caused to water resources, and the systemic nature of those impacts. It also examines the extent to which damage is affecting accessibility of other water users regionally.
“Many of the world’s largest institutional investors have yet to consider the private sector’s impact on freshwater when making investment and engagement decisions,” said Kirsten James, senior program director of water at Ceres. “The Global Assessment of Private Sector Impacts on Water makes the extent of those impacts clear for investors and outlines which industries are causing the most harm — and have the most to lose — if improvements aren’t made. Investors have a critical role to play in spurring greater corporate engagement on water stewardship, and we hope this assessment is a useful tool to help them strategically focus their efforts.”
The Global Assessment comes as the latest report from the Intergovernmental Panel on Climate Change warns of how the world stands on the precipice of unavoidable and irreversible adverse impacts from rising temperatures. The climate crisis is directly impacting the global water cycle and the distribution and availability of freshwater around the world, acting as a threat to the existing water crisis.
Given there is more to learn about how the private sector can engage in finding solutions, the assessment offers detailed recommendations to help investors focus engagements with the private sector, including via seven core actions:
- Water quantity: Ensure practices do not negatively impact water availability
- Water quality: Ensure corporate activities do not pollute local and regional water bodies
- Ecosystem protection: Ensure business activities do not degrade natural ecosystems; help restore ecosystems the business depends on
- Access to water and sanitation: Collaborate on efforts to support clean water access and sanitation in the communities in which the business operates
- Business integration: Integrate water-related risks and opportunities into corporate governance and decision-making at all levels across the organization; disclose comprehensive water use across the corporate supply chain
- Public policy engagement and water governance: Proactively support public policies and water governance structures that further sustainable water resource management
- Multi-stakeholder collaboration: Build, engage and invest in industry and cross-industry efforts that challenge traditional business practices and encourage both research and system-level changes
“This report is the first of its kind to clearly establish the scientific case that industry activities are leading to severe and systemic impacts to freshwater resources,” said Jay Famiglietti, executive director of the Global Institute for Water Security at the University of Saskatchewan. “Our research clearly makes a case that industries — such as food production, energy production, textiles, and technology — must do better not only to protect the freshwater resources of our planet, but to remain competitive in the market.”
For more than a decade, Ceres has been building the scientific and financial case for investor water action via the Ceres Investor Water Hub, Ceres Investor Water Toolkit and, more recently, through preparations for the engagement phase of the Ceres Valuing Water Finance Initiative, which is set to be formally launched later this year. Ceres has partnered with the Government of Netherlands on an overall effort — Valuing Water Initiative —- to catalyze capital market leaders to address water risk as a financial risk.
