Americans got a grim reminder last summer of how fragile the nation’s water supply is, as a pair of U.S. cities faced major water crises. Thousands of residents in Jackson, Mississippi were unable to access clean tap water after one of the city’s main water plants failed, while residents of Las Vegas, New Mexico, were warned of dwindling freshwater supplies after heavy rainfall washed charred debris into the region’s water system.
These kinds of crises are becoming more common as the effects of climate change contribute to a rise in the frequency and severity of weather events that threaten U.S. water supplies. This in turn has led to calls for action from groups that urge public and private entities to do more to tackle water issues.
One such group is Ceres, a Boston-based nonprofit climate organization that networks with financial leaders to solve sustainability challenges. In August, Ceres launched the Valuing Water Finance Initiative, which aims to help corporations do a better job of managing their water systems and use.
The initiative was the result of a years-long research collaboration between Ceres and more than 60 major investment groups worldwide, including Fidelity International, DWS Group, the California Public Employees’ Retirement System (CalPERS), and Franklin Templeton.
The research found that corporations must do a much better job managing their water risk – not only to protect the world’s water supplies but also to lessen investor exposure. The initiative’s stated aim is to “engage with more than 70 of the world’s biggest corporate water users and polluters to drive better action on water stewardship.”
A list of those corporations reads like a who’s who of major brand names and includes Unilever, Nestle, McDonald’s, and Amazon. The Valuing Water Finance Initiative will examine companies across a broad spectrum of issues, ranging from water quality and scarcity to protecting ecosystems and improving access to water and sanitation.
“The water crisis is playing out across the U.S. and around the world in many ways, from severe drought and pollution to inadequate access to safe drinking water, all of which disproportionately impact our most vulnerable communities,” Ceres Chief Executive Mindy Lubber told the Edie website in an interview. “The private sector must recognize water’s importance for their institutions and investments lest they further expose themselves and society to increased material water risk.”
As Reuters reported, the initiative is modeled on the Climate Action 100+, a carbon-focused initiative led by 700 investors holding $68 trillion in assets, of which Ceres was also a founding member. Investors in the Valuing Water Finance Initiative bring aboard combined assets of nearly $10 trillion.
Ceres has plenty of experience in this kind of work, having previously led an investor campaign that targeted fast-food chains. The nonprofit also partnered with members of the Valuing Water Finance Task Force and others to co-develop Corporate Expectations for Valuing Water, a set of six actionable steps companies can use to address water risk. The steps align with the United Nation’s 2030 Sustainable Development Goal for Water, and encourage companies to do the following:
- Take action to ensure current practices don’t impact water quality and water availability.
- Integrate water management into business processes, including board oversight and policy engagement.
- Work to ensure access to the essentials – water and sanitation – across company value chains.
- Protect ecosystems that are critical to the freshwater supplies that their businesses depend on.
These actions are part of a broader movement to hold corporations more accountable for their water use.
Among those that have already taken positive steps are AB InBev, Coca-Cola, and Intel, whose programs range from making factories more water-efficient to helping supply chains and communities become more water aware and secure.