- August 1, 2019
California’s water crisis has many faces.
The state has been plagued by extended periods of drought, torrential floods, deadly wildfires and contaminated water sources for years as a result of a growing population and climate change. And, although clean water is explicitly recognized as a basic human right in the state constitution, nearly 1 million Californians do not have access to this vital resource. These problems will only continue to worsen without sound public policy and collaborative investor and company action that drive sustainable water management.
California legislators are diligently working on advancing many important water measures including one that would ensure safe drinking water supplies for all Californians that was signed into law July 24. But the work is far from done. While decision makers have a responsibility to lead the policy conversation on water, the private sector also must take action to tackle water risks within their own operations and global supply chains. Investors and companies alike have a unique role and opportunity to help ensure that Californians and global citizens have access to safe drinking water, while recognizing that plentiful, clean water supplies are a business fundamental and economic imperative.
Investors, in particular, are key stakeholders in engaging companies, they own or lend to, on water. They also face water risks and responsibilities in their real assets and direct investments. This spring, investor, company and policy leaders convened in San Francisco for the 2019 Ceres Conference. As a board member of the California Public Employees’ Retirement System and California State Teachers’ Retirement System and the CEO and president of Ceres, respectively, we were both honored to participate in a powerful plenary discussion, elevating awareness of water’s profound risks for investors, companies and communities and providing insight into how to protect our global water resources.
CalPERS and CalSTRS are actively engaged in factoring climate and water risks into investments. CalSTRS has committed to serving as an advisory board member of the Ceres Investor Water Hub, a working group of investors dedicated to driving greater consideration of water in their investment decision-making. They join other global pension fund leaders such as NBIM, PGGM and the University of California Regents, who were integral in the development of the Ceres Investor Water Toolkit, the first-ever comprehensive resource to evaluate and act on water risks in investment portfolios. CalSTRS is studying new methods and datasets to assess water risks in their real asset portfolios and is engaging more deeply with companies on water risks in agriculture supply chains.
As we closed the 2019 Ceres Conference, we were reminded by Henk Ovink, special envoy to the United Nations: The time to act is now. While California and other regions are already experiencing the effects of the water crisis, there is still hope for a sustainable future. CalPERS and CalSTRS’ growing awareness of water in investment decision-making show that California’s private sector is fighting to ensure that all Californians — and all global citizens — are guaranteed clean water supplies and water-smart economies for decades to come.
Betty T. Yee is the California state controller. She also serves on the board of the California Public Employees’ Retirement System, California State Teachers’ Retirement System and the sustainability nonprofit organization Ceres.
Mindy Lubber is Ceres' CEO and president.