GES has developed a selection of thematic Stewardship and Risk engagements that focus on understanding some of the most challenging ESG themes and promoting best practice. Water is one of these themes. The Water Stewardship and Risk Engagement combines both scale and detail, and covers the food and beverage, mining and garment sectors, which are associated with a high level of water risk. This engagement links water policy and practices in these three sectors to the targets of Sustainable Development Goal 6 (to ensure the availability and sustainable management of water and sanitation for all).

To establish a benchmark and form a broad understanding of the water-related risk exposure and management preparedness across the above sectors, GES in cooperation with AP7 and supported by Actiam has analysed all relevant constituents in the MSCI All-Country World Index. Some of the key points of our study are:

  • There is a general lack of transparency in relation to water, and policy and practices are poor across all sectors.
  • Almost a third of the companies analysed do not have a policy on water management and over 70 percent have no targets on pollution or water quality, despite operating in water-intensive sectors and being exposed to water-stressed developing countries.
  • Company performance in terms of setting specific time-bound goals and displaying water efficiency have a clear correlation.
  • Mining is the sector which has on average the biggest exposure but also the best preparedness in terms of water risks.
  • The more direct water needs a company has, the more likely it is to have realised the importance of water management. Supply chain water risks are not appropriately addressed by the vast majority of F&B and garment companies.

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