High and Dry: How water issues are stranding assets

CDP and Planet Tracker (May 2022)

This report covers the significance of the water crisis to the financial sector and how water risk is becoming a potential threat to financial stability. It examines the drivers of water risks – physical, regulatory, reputational, technological – and assesses the level of awareness and preparedness that exists across companies in four major sectors: coal, electric utilities, metals and mining, oil and gas, with a case study for each. The wider data is drawn from CDP’s database of corporate disclosures on water. Using all of this evidence, the research evaluates how the issue of water scarcity and water stress can affect the financial performance of companies in these chosen sectors, in addition to the financial institutions backing them. The report finally proposes a list of actions and mitigations that can be put in place to relieve some of this risk.