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AUM in Action

Investors Double Demand For Water Risk Data

A US$21 trillion-strong group of 276 global investors, banks and insurers has urged a record 1,029 high-impact companies to report data on their water-related impacts and risks, marking a 122% year-on-year increase. The request was made as part of non-profit reporting platform CDP’s 2024 Non-Disclosure Campaign (NDC), which aims to leverage direct engagement from financial institutions to drive corporate environmental disclosure and boost transparency. The campaign specifically engages a select group of companies that have not previously reported environmental data to financial institutions through CDP. This year, this included the likes of tech giants Apple, Amazon, Nokia, LG and Roku – whose water exposure risks often lies in high-consumption data centres and chip manufacturing, CDP said – as well as airlines Qantas Airways, Ryanair, Jetblue, WizzAir and easyJet, with contamination from jet fuel leakage and extensive use of de-icing fluids having sparked concerns. The 100+ financial institutions that took part in this year’s campaign pointed to a growing awareness of the potential financial, social and reputational risks associated with water, and how these may leave portfolios exposed. Previous CDP research has estimated a minimum of US$225 billion in corporate water-related risks. “We have seen a significant increase in financial institutions leading the demand for greater transparency on water-related risks in their portfolios,” said Claire Elsdon, Director of Capital Markets at CDP. “Now we need to see companies responding by reporting this information and working in partnership with the finance community to measure and manage these risks. The magnitude and complexity of the water crisis is vast, but guided by more complete data, directors are well-placed to meet the challenge head-on.” This year’s campaign was launched alongside a briefing highlighting the need for financial institutions to better manage systemic water risks and fully price water into their financial risk assumptions. In addition to engaging businesses on water, the NDC also aims to improve data availability on climate and forests. As such, 1,998 companies collectively responsible for emissions equivalent to those of India, Brazil, Germany and the UK combined, have been asked to disclose.

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