Financial implications of addressing water externalities in the apparel and meat industries - DWS Group

DWS has teamed up with the US-based sustainability organisation Ceres and the Valuing Water Finance Initiative for two briefing reports on the financial implications of water pollution and excess water use by major companies in the apparel and meat industries.

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... Current approaches to water risk focus on asset class and sector exposure to water and physical climate risk. The financial value at risk from water pollution and water availability are often ignored. However, existing corporate disclosures demonstrate the potential for significant financial impacts due to companies affecting the quantity and quality of water resources around their facilities.

The global consumer staples sector, including the packaged meat industry, faces a $200 billion impact from water scarcity and is the most exposed of all sectors to water risk. Companies in the consumer staples sector are already suffering financially material impacts caused by their water-related externalities.

The apparel industry withdraws more than 215 billion cubic meters of water annually, equal to the total amount of water withdrawn by Indonesia. While the sector is responsible for polluting 20% of the globe’s freshwater, just one in 10 fashion companies that disclose water-related information to CDP acknowledges water pollution issues at each stage of the value chain.

The Ceres partnership follows-up on their report A Transformational Framework for Water which was awarded Environmental Impact Thought Leadership of the Year 2021 from Pensions for Purpose.

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