Note, originally published in March 2023.
Financial institutions (FIs) including banks, insurers, asset owners and asset managers hold a key to positive change because of their reach, power and influence. To address global challenges of the scale and magnitude of the water crisis, we must transform how financiers assess and mitigate water risks. The 2023 UN Water Conference marks a turning point for improving the political will for ambitious water action from governments. As part of this, CDP has initiated the ‘Water Action Agenda for Finance’ with the goal of aligning trillions in financial flows with the achievement a water secure world.
Based on the financial sector’s very first water-related disclosure in 2022, this open platform showcases that action is already underway amongst private finance institutions. The platform is a means to understand and consistently monitor progress against a set of indicators over time. It provides the evidence for policymakers and regulators to support the creation of more effective policy responses.
From the analyzed data, it becomes clear that it is perfectly feasible that financial institutions step up to address the water crisis by leveraging water-conscious investment, insurance, lending, and underwriting practices to drive fair water use and incentivise action across boundaries.
This initiative comes hand-in-hand with other initiatives led by CDP in collaboration with partners to catalyze the Water Action Agenda for Finance including:
With the support of the Dutch Government through the Valuing Water Initiative (VWI), CDP, the Organisation for Economic Cooperation and Development (OECD) and the Water Footprint Network (WFN), have developed a first-of-its-kind Finance Water Action Pathway draft to define the way to transforming private lending, investing, and insurance activities in line with the goal of a water secure future. The first version of the Pathway, officially launched and presented at a dedicated side event at the UN 2030 Water Conference in New York, is available to read here: Finance Water Action Pathway.
For certain questions in the Financial Institutions module, disclosures cover the four portfolio activities making up core segments in the finance sector (Banking, insurance underwriting, asset management and asset ownership). Many FIs undertake more than one portfolio activity and therefore disclose on multiple activities. In this case, when defining the total number of FIs that are taking a particular action across all portfolio activities, the best performing portfolio activity per organisation is used in calculations.
Key water activity types include:
There were no answers relating to 'Insurance underwriting'.