Dealing with Water Scarcity – an ESG Perspective

esg_dealing_with_water_security

NOVEMBER 28 2018

The summer of 2018 saw an unusually long dry spell in large parts of Europe, bringing home the new realities associated with climate change. The resulting water scarcity also negatively impacted many industry sectors such as agriculture and farming, forestry and even energy production and transportation. With the three driving factors population growth, climate change and unsustainable production and consumption patterns water scarcity is very much a phenomenon of the past 100 to 200 years. As freshwater is an essential element of all life and of many business activities and as its availability and distribution are closely linked with changing climatic conditions, water scarcity and water stress in the broader sense, are projected to become more severe over the next decades.

Every business activity can be linked to freshwater use. Yet, there are some business areas that play a more prominent role when it comes to water. Therefore, investors will benefit from identifying the industries or business activities that have the greatest impact on freshwater sources as these carry the greatest potential for exercising leverage and engaging on the issues on a large scale.

This paper gives a profound insight into the understanding of Water Scarcity and Water Stress. It includes examples of how ISS-oekom and ISS-ethix assess the ESG-related performance of companies and countries. In addition, a specific Sustainability Solutions Assessment gives information whether a company´s operations and product portfolio contribute or obstruct the UN SDGs.

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