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Companies that rely on a steady supply of water to conduct their business, including beverage makers, are among those that could be at financial risk, investors say. They plan to encourage companies to safeguard water resources to minimize that risk.

They see a need to identify and invest in solutions to water security threats, as global water demand is projected to soon exceed supply

A coalition of 64 institutional investors recently launched the Valuing Water Finance Initiative. It’s coordinated by corporate sustainability advocacy group Ceres, along with the Netherlands government. The initiative is asking some of the world’s largest corporate water users to acknowledge, disclose, and address water scarcity as a potential financial risk to their business.

The investors initially will focus on 72 companies in four sectors — food, beverage, clothing, and tech — that consume the most water and have the biggest impact on those resources. They aim to engage companies on the need to value water and view it as a financial risk, and to encourage any changes necessary to safeguard water resources to minimize these risks.

According to the World Resources Institute, a quarter of the global population lives in extremely water-stressed regions, where more than 80% of the available water is withdrawn annually. That water demand is expected to increase, and so water scarcity is likely to get worse in the next decade, increasing the risk for companies and their investors.

It’s not only communities that are threatened. Companies that rely on a steady supply of water to conduct their business are also at risk, and so are their investors and shareholders.

Investors will raise these six expectations with companies:

  • Their operations do not increase water stress in water-scarce areas.
  • Their operations do not reduce water quality.
  • Their operations do not contribute to destruction of natural ecosystems that play an important role in maintaining freshwater supplies and aquatic biodiversity, and instead they restore degraded habitats they depend on.
  • They make a positive contribution to the social, economic, and environmental sustainability of local communities.
  • Company board members and senior management are responsible for overseeing water management strategies.
  • The company must support public policies that ensure freshwater resources are managed sustainably.

Other institutional investors are focusing on solutions.

Matthew Diserio is co-founder and president of Water Asset Management, which invests solely in companies and assets that ensure the supply and quality of water. He said, “We know that all these problems are solvable. These issues get solved by committing capital.”

Companies can improve their water sustainability by investing in technologies that enable them to treat their wastewater in a way that makes it safe to return to the environment. When treated appropriately, wastewater can be recycled and reused within a company’s operations ─ for example, to irrigate landscaping or to flush toilets ─ thereby reducing their water demand.

Fluence offers several innovative technologies that can help businesses improve sustainability and reduce their water risk. As a global leader in water and wastewater treatment solutions, our team of water experts can provide advice on water management strategies and design a water, wastewater, or reuse treatment system that best meets your company’s needs.

Fluence’s cost-efficient, decentralized treatment systems, such as Aspiral™ and NIROBOX™, will significantly reduce your impact on freshwater resources and improve water sustainability in line with the expectations outlined by investors above.

Contact Fluence to find out how our integrated water and wastewater treatment solutions can reduce the financial risk of water for your company and its shareholders.

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