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AllianceBernstein: An Investor’s Guide to Navigating Sustainable Water Management
AllianceBernstein: An Investor’s Guide to Navigating Sustainable Water Management
Published 06-12-25
Submitted by AllianceBernstein
Sara Rosner| Director—Responsible Investing Research
What You Need to Know
Water security represents a critical challenge for the world: how to address too much, too little and too-polluted water. In this paper, we advocate a new approach to managing water risks, aimed at securing better outcomes for communities, companies and investors.
| 40% estimated global shortfall in freshwater supply by 2030 | US$225 billion of listed equity value at risk | At least US$10 billion total invested in First Quantum Minerals' Panama copper mine before it was forced to close |
Executive Summary
Water security is a growing risk for companies, forcing investors to recognize and address their exposures. Failure to manage water risks can inflict material damage on business and investment outcomes, while companies that are strategically focused on the issue could enjoy tangible competitive advantages.
Investors seeking to manage material water risks have so far relied largely on disclosure requirements to influence corporate behavior. But a data-disclosure approach—though valuable—has notable limitations.
To overcome this problem, we propose stakeholder management, an approach that focuses on engaging local stakeholders to address water risks. By combining the disclosure regime with better awareness of local needs, we believe companies can make their water stewardship more effective.
Our analysis of companies in three water risk—prone industries—metals & mining, beverages and semiconductor manufacturing—led us to develop a versatile, five-part framework for investors. This framework is designed to both assess and improve companies’ stakeholder management practices.
We believe our approach provides an opportunity for investors to engage1 with companies and help guide them through the complexities of water security toward more sustainable and value-enhancing outcomes.
1 AllianceBernstein (AB) engages issuers where it believes the engagement is in the best financial interest of its clients.
The views expressed herein do not constitute research, investment advice or trade recommendations, and do not necessarily represent the views of all AB portfolio-management teams, and are subject to change over time.
Learn more about AB’s approach to responsibility here.
AllianceBernstein
AllianceBernstein
AllianceBernstein (AB) is a leading global investment management firm that offers diversified investment services to institutional investors, individuals, and private wealth clients in major world markets.
To be effective stewards of our clients’ assets, we strive to invest responsibly—assessing, engaging on and integrating material issues, including environmental, social and governance (ESG) considerations into most of our actively managed strategies (approximately 79% of AB’s actively managed assets under management as of December 31, 2024).
Our purpose—to pursue insight that unlocks opportunity—describes the ethos of our firm. Because we are an active investment manager, differentiated insights drive our ability to design innovative investment solutions and help our clients achieve their investment goals. We became a signatory to the Principles for Responsible Investment (PRI) in 2011. This began our journey to formalize our approach to identifying responsible ways to unlock opportunities for our clients through integrating material ESG factors throughout most of our actively managed equity and fixed-income client accounts, funds and strategies. Material ESG factors are important elements in forming insights and in presenting potential risks and opportunities that can affect the performance of the companies and issuers that we invest in and the portfolios that we build. AB also engages issuers when it believes the engagement is in the best financial interest of its clients.
Our values illustrate the behaviors and actions that create our strong culture and enable us to meet our clients' needs. Each value inspires us to be better:
- Invest in One Another: At AB, there’s no “one size fits all” and no mold to break. We celebrate idiosyncrasy and make sure everyone’s voice is heard. We seek and include talented people with diverse skills, abilities and backgrounds, who expand our thinking. A mosaic of perspectives makes us stronger, helping us to nurture enduring relationships and build actionable solutions.
- Strive for Distinctive Knowledge: Intellectual curiosity is in our DNA. We embrace challenging problems and ask tough questions. We don’t settle for easy answers when we seek to understand the world around us—and that’s what makes us better investors and partners to our colleagues and clients. We are independent thinkers who go where the research and data take us. And knowing more isn’t the end of the journey, it’s the start of a deeper conversation.
- Speak with Courage and Conviction: Collegial debate yields conviction, so we challenge one another to think differently. Working together enables us to see all sides of an issue. We stand firmly behind our ideas, and we recognize that the world is dynamic. To keep pace with an ever changing world and industry, we constantly reassess our views and share them with intellectual honesty. Above all, we strive to seek and speak truth to our colleagues, clients and others as a trusted voice of reason.
- Act with Integrity—Always: Although our firm is comprised of multiple businesses, disciplines and individuals, we’re united by our commitment to be strong stewards for our people and our clients. Our fiduciary duty and an ethical mind-set are fundamental to the decisions we make.
As of December 31, 2024, AB had $792B in assets under management, $555B of which were ESG-integrated. Additional information about AB may be found on our website, www.alliancebernstein.com.
Learn more about AB’s approach to responsibility here.
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