Conflicting Reporting Systems May Hinder Companies’ Water Risk Strategies

Water risks such as floods, scarcity and pollution are increasingly chipping into corporate bottom lines. The financial sector is taking notice–and taking action.

Calvert Investments asked Hanes Brands to evaluate its losses from cotton-supply shortages due to the 2011 US drought, determining that the company lost $5.2 billion. Trillium Asset Management is now asking companies in its portfolio to factor water risk into their financial projections. And Moody’s Investor Service released warnings about risk to credit ratings in the mining industry, as companies spend more on infrastructure in response to growing water risks.