NN Group joins project to deepen understanding of water-related risks for investors
NN is taking steps to strengthen efforts in investor initiatives in water and natural capital by joining the Bridge project. The research project aims to deepen the understanding of water-related risks. Led by Deltares and together with other participants Achmea Investment Management, SCOR and WWF, NN wants to encourage a shift in how investors understand and consider water-related risks. The project follows NN’s membership in the Ceres Valuing Water Finance Initiative.
The Bridge project will provide a unique perspective by combining current and future basin water risks (such as the risk of water scarcity, droughts or floods) with water-related performance of companies (how companies manage or impact water resources, including how they use, conserve, or pollute water). The goal is to develop a new approach to mapping these risks and will be used in engagement with the companies being invested in. By applying more location-specific tools and conducting a systems analysis of cascading risks, the study aims to bridge the gap between location-specific risks and portfolio-wide risks. The project qualifies as a Top consortium for Knowledge and Innovation (TKI) programme of the Dutch Enterprise Agency.
The study will focus on critical watershed areas that are crucial for supply chains, biodiversity, and human rights and which are known for being hot spots regarding water stress.
This approach supports the findings of the Ceres Valuing Water Finance Initiative benchmark, released in October 2023. The benchmark shows that only 42% of the 72 companies assessed have set contextual or risk-differentiated targets for high-risk watersheds. For example through time-bound targets using a contextual or risk-differentiated approach in their direct operations and supply chains. NN engages with companies with a high water footprint, to adopt and implement a set of clear steps, called the Corporate Expectations for Valuing Water.
The Ceres Benchmark findings underscore the importance of companies accelerating their efforts to advance their water stewardship strategies, as it is vital for the preservation and protection of freshwater resources. NN Group has identified water as a stewardship to focus on in dialogues with our investee companies over the coming years. The collaboration with Achmea IM, SCOR, Deltares and WWF in Bridge and NN’s participation in the Ceres Valuing Water Initiative are examples of how we advance this crucial topic.