Despite its importance, freshwater is a scarce resource, with only 2.5% of Earth’s water being freshwater and 0.3% of that available for human use. Freshwater risk is commonly viewed through a humanitarian or public health lens. Its scarcity underpins many risks, including waterborne illnesses, supply issues, and social inequality. Calvert believes ensuring just access to freshwater promotes social equality, enhances quality of life, and lays the foundation for sustainable development. Yet, the critical risks that threaten sustainable development, as well as pressing economic concern associated with this finite resource, are often overlooked. These risks are often neglected since freshwater resources may be mistakenly considered affordable and abundant.

Key Takeaways

• Critical industrial and manufacturing processes depend on the availability and quality of freshwater.
• Disruptions in freshwater availability may pose financially material risks to investors.
• Corporate disclosure and data remain a challenge due to lack of standardization and difficulties collecting data.
• Calvert encourages water intensive sectors to coalesce to develop water reporting protocol similar to the Greenhouse Gas (GHG) reporting protocol.
• In light of water risk data limitations, Calvert utilizes a proprietary method to assess water risks at the sector and company level.