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By establishing the framework for ESG integration with water resources, organizations can work towards a global standard of sustainability.

Water resource groups all share the urgency for understanding one important concept, sustainability. Over time and research, these groups have analyzed how critical it is for institutional investors to strengthen their understanding of water in ESG integration.

Monika Freyman, director for the Ceres Investor Water Hub, works with institutional investors to help deepen their integration of ESG factors, particularly in water. Freyman, who has a Master of Science in aquatic ecology and undergraduate in finance, has developed a catalog of items that will assist in the establishment of a global standard for water in ESG integration.

On top of utilizing resource groups, Freyman wrote that the, “Ceres Investor Water Toolkit coming out in 2017 will guide investors on water research resources.” Thanks to the peer-to-peer learning promotion done by the Ceres Investor Network group, the Toolkit will give managers a comprehensive method for assessing water risks across asset classes.

According to Ceres, the Toolkit will be online, publicly available and accompanied by a short white paper and presentation materials that investors and other key market participants can use to distribute and share information.

As the need for water resource understanding in ESG integration continues to grow globally, the importance of people with a background like Freyman’s will increase as well. Most of her work focuses on connecting both the scientific and financial fields.

“Investors must have a top down and bottom up approach to water integration,” wrote Freyman. “Top down being analyzing water risks across asset classes and entire portfolios. Bottom up means understanding water risk exposure at the individual security or company level.”  

Although water risk is defined differently per entity, many risk factors, such as pollution, poor governance, climate change and many more, affect organizations in different sectors simultaneously.

Lastly, Freyman wrote, “Corporate and investor engagement must evolve to really focus on water risk drivers.” Utilizing water research resources will be crucial in evolving the corporate and investor engagement.

 

Freyman will be a discussant in the Improving Investor ESG Methodologies: A Walk Through Water Risk Integration discussion at the ESG Integration Summit on Aug. 29 at Nasdaq in Stockholm Sweden.