Home » Resource Database Case Study Impact of water curtailment on the credit rating of heavy industry Authoring Organisation University of Cambridge Institute for Sustainability Leadership (CISL) and HSBC Publish Date 2022 Geography Global Download Case Study (Impact of water curtailment on the credit rating of heavy industry)(This link will take you to an external website) About this Case StudyThis case study looked at the credit risks to the financials of heavy industry companies in an East Asian country with areas of very high water stress. Key outcomesThis case study assessed the potential impact on credit risk when natural services are disrupted by non-climate drivers such as increasing exploitation of water or upstream land use change, which are amplified during periods of extreme weather variability such as drought. The scenario applied involved water curtailment for three months. The credit risk consequences were: 1) significant deterioration of the average portfolio credit risk rating and 2) more than a third of the companies analysed moved from investment grade to speculative grade. Download Case Study (Impact of water curtailment on the credit rating of heavy industry)(This link will take you to an external website) Related resources Finance must tackle the growing water crisis. Here’s how. World Economic Forum (July 2022) An insight outlining the importance of considering water risk in financial decision making and the significant material impact it is already having on the world. Ecolab Cleans Up Billions With Water Efficiency Solutions BloombergNEF | October 2024Location: United States of AmericaCase Study This case study examines the financial opportunity of water and energy efficiency through Ecolab’s technology. Ecolab developed a system that optimises water use in real-time across industrial processes, offering operational cost savings and benefits to nature. Gradiant’s Treatment Tech Draws Water-Stressed Industrials BloombergNEF | October 2024Location: United States of AmericaCase Study Gradiant, a spin-out from the Massachusetts Institute of Technology, has developed technology that optimises wastewater treatment. This case study explores the financial and nature-related opportunities of the company. Tesla’s Reliance on Groundwater Hinders Brandenburg Gigafactory Development BloombergNEF | 2024Location: GermanyCase Study The case study discusses the legal and market risks associated with water scarcity for Tesla's operations. It focuses on a factory in a water-stressed area of Germany that faced delays due to stakeholder complaints. Related publications Guidance on biomes Additional guidance on scenario analysis Guidance on scenario analysis Related webinars Nature-related risk in practice: what are the key considerations for financial institutions? April 27, 2023 (Updated: September 18, 2023) This webinar discusses the practical aspects of understanding and evaluating nature-related risks for financial institutions. It covers the importance of considering the climate-nature nexus and deep dives into then-recent case studies...