- April 29, 2019
Water scarcity and water crises are top global risks, according to the World Economic Forum. Climate change is already having a profound effect on global water cycles, resulting in both longer and more severe droughts and more frequent extreme precipitation and flooding events. Increasing competition for finite water resources among industry, agriculture, and an expanding population is exacerbating these impacts and the underlying risks. For all of these reasons and more, water risk has attracted widespread investor attention and the Dutch asset manager ACTIAM is at the forefront of both research and action on this issue.
With $63 billion in assets under management (AUM), ACTIAM proactively shares its approaches and key lessons learned on water issues with the global investor community. For example, it contributed to the development and launch of Ceres’s Investor Water Toolkit, a “how-to” guide for institutional investors on integrating water issues into portfolio management practices.
ACTIAM has also set itself a groundbreaking goal: By 2030, it hopes to be water neutral. In practical terms, this means the companies in the firm’s portfolio will “consume no more water than nature can replenish and cause no more pollution than is acceptable for the health of humans and natural ecosystems.” This commitment provides important insights for investors pursuing portfolio-wide approaches to understanding water risks and sets a high bar for mitigating those risks.
I recently spoke with Hans van Houwelingen, ACTIAM’s CEO, about the importance of water risks to investors and ACTIAM’s unprecedented, portfolio-wide water neutrality goal.