Limited access to fresh water is a growing risk for an increasing number of companies. Norges Bank Investment Management (NBIM) will on July 4 at the Singapore International Water Week host a seminar on the importance of managing and reporting on water-related risks at companies in Asia and Australia.
BHP Billiton, G-Resources, Hindustan Unilever and Asian Bamboo -- companies with water-intensive operations -- will discuss how they tackle water-related risks and opportunities in their operations and supply chains. Dutch pension funds APG and PGGM, Singapore’s sovereign fund GIC, HSBC Global Asset Management and NBIM, the manager of the Norwegian Government Pension Fund Global, will address how they manage water risks in the companies they are invested in.
“As a long-term investor in about 8,000 companies, we expect businesses to regularly report on the risks to their operations and supply chains from increasingly scarce water supplies and water pollution,” says Anne Kvam, NBIM’s global head of ownership policy. “Failure to do so may hurt profitability at the businesses and, consequently, impact our investments.”
Growth in the economies and populations of Asia and Australia is boosting demand for water as changes in weather patterns, pollution and regulations curb supplies. NBIM has since 2011 engaged with companies in Asia and Australia that are particularly exposed to water-related risks. Our dialogues with the businesses have revealed three main areas for improvement. Companies need to evaluate water-related risks in their supply chains, not only in their own operations. They need to improve reporting on quantitative water metrics and they need to standardise their reporting.