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ESG Insider: Why Companies, Investors Should Be Worried About Water

Published 04-13-21

Submitted by S&P Global

a person drinking water from their cupped hands
Photo source: Getty Images

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World Water Day was March 22nd, and we’re marking the occasion by looking at the looming threat of water scarcity and the lack of investor appetite for financing water-related projects. According to the United Nations, 2.2 billion people globally lack safely managed drinking water, and 4.2 billion people do not have safely managed sanitation. The U.N. also warns that water scarcity could displace 700 million people by 2030. Access to clean water has become even more vital with COVID-19, which created a worldwide need for constant hand-washing.

Water management is a risk for companies, too. S&P Global Trucost data shows that more than half of companies’ water usage comes from supply chains, so even companies operating in water-abundant regions can be affected by scarcity given the global nature of suppliers. 

In this episode, we hear from Will Sarni, founder and CEO of water consultancy Water Foundry. Will says the world struggles to value water, which makes it difficult to secure capital investments in water technologies and solutions. To learn about some of the solutions that do exist, we talk to Emilio Tenuta, Chief Sustainability Officer at Ecolab, a provider of water and hygiene solutions. “We're seeing that disruptions and challenges to our water resources from climate change can have significant operational risk to businesses,” Emilio says. “It really impacts businesses and communities, whether it be operational costs for business, supply chain disruptions, growing constraints related to reputation and brand.

Clearly, there's a growing concern for ESG investors who are investing in companies facing these challenges.” Ecolab just released an enhanced version of the Smart Water Navigator, a free, publicly available online tool that helps companies manage water risk using S&P Global Trucost data. 

Listen to the podcast here

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S&P Global

S&P Global

S&P Global (NYSE: SPGI) is the world's foremost provider of credit ratings, benchmarks and analytics in the global capital and commodity markets, offering ESG solutions, deep data and insights on critical economic, market and business factors. We've been providing essential intelligence that unlocks opportunity, fosters growth and accelerates progress for more than 160 years. Our divisions include S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts. For more information, visit www.spglobal.com.

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