NN Group contributes to report to enhance investors’ understanding of water-related risks
Water is the basis for life on earth. At NN Group we recognise the importance of this critical resource, and we identified it as a priority topic for our investment and engagement activities. To gain a better understanding of water-related risks for investors, we contributed to a new report on this underdeveloped topic.
The recently published report highlights the need for more up-to-date and consistent location-specific data, scenarios, and understanding of risk profiles of watersheds and supply chains in corporate reporting. By contextualizing risks to both the company and the regions in which it operates, investors can gain a better understanding of water-related risks and make more informed decisions.
‘Corporate reporting does not sufficiently capture localised water and future risks, leaving a gap that has to be addressed in order to map and assess water risks in a standardised way,’ said Rebecca Dreyfus, Active Ownership Specialist within NN Group's Responsible Investment team. ‘This report provides actionable insights for investors and businesses to assess these risks more effectively. Understanding and mitigating water-related risks in specific locations is crucial for companies amidst rapidly changing global climate and ecosystem dynamics.’
The report focused on two critical watersheds in São Paolo (Brazil) and Chennai (India), two large urban conglomerates that have been experiencing water stress for a prolonged period. Both cities have a broad range of economic activities that rely on local water sources, such as the automotive and manufacturing industries. Local water issues in these areas can therefore have an impact on global commodities and businesses as well.
The research report is the outcome of the BRIDGE project, which was launched last year with the goal of identifying new approaches to bridge gaps in corporate reporting on environmental, social, and governance (ESG) topics, particularly in the area of water. In the project, we partnered with water specialists Deltares and WWF, as well as peers Achmea IM and SCOR.
NN Group will continue to focus on water as one of the priority topics for our investments in the coming years. We will continue collaborating with initiatives, such as the Ceres Valuing Water Initiative and Nature Action 100 to address environmental risks. Additionally, we plan to develop water-specific metrics to monitor corporate progress and explore opportunities for further engagement effort to enhance water stewardship.
Please also see the NN Active Ownership programme
