Ceres initiative calls for F&B industry’s sharpened focus on global water crisis
24 Aug 2022 --- Institutional investors from around the world are joining Ceres in the Valuing Water Finance Initiative, aiming to engage 72 corporate water users and polluters to act on water as a financial risk and drive the necessary large-scale change to protect water systems better.
As drought plagues many countries and impacts harvests and global supply chains on specific food ingredients and raw materials, calls are being made to step up moves to make companies respond to the worldwide water crisis.
Water stewardship
The new consortium covers US$9.8 trillion in assets.
So far, a long list of key players have signed up, including Nestlé, Unilever, Mondelēz International, the Kraft Heinz Company, Archer Daniels Midland Company, Danone and The Hershey Company.
According to Ceres, the initiative offers the most comprehensive and ambitious guidelines available to investors while also considering the full suite of water-related issues, from water availability and quality to board oversight and public policy engagement.
Prioritizing water risk
The initiative stresses fresh water’s essential role in the food and beverage industry and ecosystems.
It provides investors with “tools” to make a case for prioritizing water risk.
The initiative prioritizes a set of six science-based, actionable Corporate Expectations for Valuing Water, which is informed by scientific evidence that aligns with the United Nations 2030 Sustainable Development Goal for Water (SDG6) and supports the aims of the Ceres Roadmap 2030.
A sweltering summer heatwave across Europe recently led to the drying up of crucial waterways.The expectations lay out clear action steps for companies and set the stage for investor engagement focused on collective progress. These include water quantity and how companies do not negatively impact water availability in water-scarce areas across their value chain.
Companies should not contribute to converting natural ecosystems critical to freshwater supplies and aquatic biodiversity and actively work to restore degraded habitats that their businesses depend upon.
Businesses should also contribute to the social, economic and ecological resilience of communities they interact with by contributing to achieving universal and equitable access. Meanwhile, corporate boards and senior management must also oversee water management efforts.
Finally, companies should ensure that all public policy engagement and lobbying activities are aligned with sustainable water resource management outcomes.
Impact of droughts in 2022
With a drought sweeping across the Horn of Africa amid heat waves across the globe this summer, the World Health Organization recently warned of the impact of rising temperatures on breastfeeding rates to protect infant health.
Meanwhile, last week’s sweltering summer heatwave across Europe led to the drying up of crucial waterways, hampering critical trade. One of the most significant passages for agri-food shipments such as grain, the Rhine river, quickly became impassable for barge traffic. In Italy, the Po river was two meters lower than normal.
Last month, an analysis of the prolonged droughts across the EU revealed a significant portion of Europe is now critically exposed to high drought levels – classified as “warning” (44% of EU and UK) and “alert” (9% of EU and UK) – causing historical stress on agricultural farmlands.
“The water crisis is playing out across the US 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,” says Mindy Lubber, CEO and president of Ceres.
“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. We are grateful to see so many investors signing on to the Ceres Valuing Water Finance Initiative at its launch, but we need more investors to step up and join us in supporting the corporate expectations for valuing water and engaging with the companies they own on water stewardship.”
Edited by Gaynor Selby
