Investors focus on “liquidity” – companies urged to embrace water sustainability

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London, 9 December 2008 -  A US$1.5 trillion alliance of investors, all signatories to the UN-backed Principles for Responsible Investment, is asking 100 of the world’s biggest companies to join an initiative that will improve their policies and practices around use of water. The 16 signatories to the letter include leading European and North American institutional investors and asset managers such as Connecticut Retirement Plans and Trust Funds, Calvert, Robeco, and F&C Management Ltd.

The targeted companies include global giants such as Starbucks Coffee Company, GlaxoSmithKline and Carlsberg Group. In a letter sent to the chief executive officers of the companies today, the investors state their belief that companies that manage the risks and opportunities presented by limited global water availability are more likely to be viable long-term investments.

The targeted companies are being asked to sign up to the ‘CEO Water Mandate’ – a unique public-private initiative created by the UN Global Compact and designed to assist companies in the development, implementation and disclosure of water sustainability policies and practices.

Connecticut State Treasurer, Denise L. Nappier, principal fiduciary of the Connecticut Retirement Plans and Trust Funds, one of the investors involved, said:

“Water can not be treated as merely a casualty of climate change, but rather its rival in its potential to both pose risks and create opportunities for the companies in which our funds invest”.

Another investor, Wilco van Heteren, Senior Engagement Specialist, Corporate Governance and Sustainability at Robeco, explained:

“This collaborative shareholder engagement sends an important signal to these companies from current and potential shareholders that water-related issues are increasingly part of mainstream investment considerations. Water sustainability is particularly vital for those companies in water-intensive sectors such as Oil and Gas, Forestry and Paper, and Food and Beverages; and many companies face a range of regulatory, reputation, and business-continuity risks, up and down their supply chains”.

In many parts of the world, companies in all industries are expected to experience escalating challenges related to water availability and the quality of water. Population growth, urbanization, and climate change are combining to place significant pressure on water supplies for communities and industries. According to the UN, nearly two- thirds of humanity is expected to live in water-stressed regions by 2025 – many in emerging and frontier markets.

The ‘CEO Water Mandate’ initiative helps companies address this water challenge by assisting in corporate policy development and through the sharing of best and emerging practices. The ‘CEO Water Mandate’, launched in July 2007, has been endorsed by approximately 40 global companies.

Bennett Freeman, Senior Vice President for Social Research and Policy, Calvert Asset Management Company, Inc., said:

“Collectively, investors and companies share the important responsibility to help find solutions for the sustainable management of the world’s most precious resource.”

James Gifford, Executive Director of the PRI, added:

“Fresh water is a finite resource, and as water consumption and population increase, so water availability can become a constraint to economic growth. Water sustainability is therefore a real financial issue for long-term investors and we should expect to see many future investor collaborations to ensure companies manage water resources in a sustainable way”.

Find out more about the ‘CEO Water Mandate’ initiative at:

http://www.unglobalcompact.org/Issues/Environment/CEO_Water_Mandate/index.html

The full list of investors: Achmea; Aviva Investors; BC Investment Management Corporation (bcIMC); BP Pension Fund; Calvert Asset Management Company, Inc.; Connecticut Retirement Plans and Trust Funds; Co-operative Asset Management; F&C Management Ltd; Henderson Global Investors; Natcan Investment Management; Newton Investment Management; Robeco; Souls Fund Management Limited; Syntrus Achmea Asset Management; The Ethical Funds Company; and Threadneedle Asset Management

Supporting investor coalitions and service providers: Ceres, Local Authority Pension Fund Forum (LAPFF), and Ethical Markets Media. 

The Principles for Responsible Investment (PRI)

The Principles for Responsible Investment, convened by UNEP FI and the UN Global Compact, was established as a framework to help investors achieve better long-term investment returns and sustainable markets through better analysis of environmental, social and governance issues in investment process and the exercise of responsible ownership practices. The Principles themselves, a full list of signatories and more information can be found at www.unpri.org

UN Global Compact

Launched in 2000, the UN Global Compact brings business together with UN agencies, labour, civil society and governments to advance ten universal principles in the areas of human rights, labour, environment and anti-corruption. Through the power of collective action, the Global Compact seeks to mainstream these ten principles in business activities around the world and to catalyze actions in support of broader UN goals. With over 5000 participating companies and hundreds of other stakeholders from more than 120 countries, it is the world’s largest voluntary corporate sustainability initiative. More at: www.unglobalcompact.org.

United Nations Environment Programme Finance Initiative (UNEP FI)

UNEP FI is a unique global partnership between UNEP and the private financial sector that works closely with approximately 180 financial institutions to develop and promote linkages between sustainability and financial performance. Through regional activities, a comprehensive work programme, training and research, UNEP FI carries out its mission to identify, promote and realize the adoption of best environmental and sustainability practice at all levels of financial institution operations. More information: www.unepfi.org

 

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