Tag: Sustainable Business

New Sustainability Summit Announced by The Water Council

New Sustainability Summit Announced by The Water Council & Marquette University

>> Back to April 2024 Issue

The Water Council, a Milwaukee nonprofit dedicated to solving global water challenges, and Marquette University’s College of Business Administration Sustainability Lab, which aims to research and disseminate knowledge and foster and develop managers around effective sustainability and stewardship practices, announced plans recently for the Nexus Sustainability Leaders Summit, an annual national conference on corporate sustainability, water and energy resiliency, and stewardship.

The new event is scheduled for October 29-30, 2024 at the Harley-Davidson Museum in Milwaukee, combines and builds off Marquette’s Sustainability 2.0 Conference and The Water Council’s Water Leaders Summit.

“As two Milwaukee-based organizations that are leading innovators in sustainability and resiliency, we felt it was natural to combine our efforts and take advantage of the resources and audiences of each organization,” said Chris Merker, co-director of Marquette’s Sustainability Lab and founder of the Sustainability 2.0 Conference.

“For over 15 years, the Water Leaders Summit has brought together some of the nation’s thought leaders to explore water’s role in larger issues of climate change, sustainable finance and more,” said Dean Amhaus, The Water Council’s president and CEO. “We will continue to do that through Nexus, and we can’t imagine a better partner than Marquette University.”

The conference will explore a range of sustainability-related topics in the areas of water, energy, finance, diversity and inclusion, and the ESG (environmental, social and governance) reporting movement.

“Businesses are facing unprecedented challenges from climate change, shifting customer expectations and a more stringent regulatory climate,” Merker said. “This event will invite thought leaders from across the nation to probe those challenges and propose solutions.”

The first Water Leaders Summit was held in 2007 as a precursor to the formation of The Water Council in 2009. The summit’s popular longtime moderator, author and journalist Charles Fishman, will moderate the new event.

In 2023, The Water Council and its partners won a Development Award from the National Science Foundation’s Regional Innovation Engines Program to develop a water and energy resiliency engine in Wisconsin. The engine’s work will help inform topics of Nexus, while the event will serve as an outlet for engine partners and stakeholders to learn about and discuss pertinent issues.

“The Water Council has never shied away from evolving and innovating in our 15-year history,” Amhaus said. “With the rapid escalation of significant climate-related issues and the growing role of the financial industry, the time is right to join efforts with Marquette University to tackle important topics facing our nation and the world.”

The Marquette College of Business Administration first held the Sustainability 2.0 Conference in 2019 to discuss how the adoption of ESG and sustainability standards in business and industry continue to give rise to an emerging paradigm for responsible and ethical business practice. The school has long been recognized as a sustainability leader in study and practice.

At its 2022 conference, Marquette President Michael R. Lovell announced that Marquette had become the first university to join The Water Council’s WAVE program for improving, reporting and recognizing good water stewardship. Lovell also sits on The Water Council’s board.

“We want Nexus to become known as the conference for corporate sustainability,” Merker said. “It’s an exciting time for Marquette, The Water Council and Milwaukee.”

 

About The Water Council
The Water Council (TWC) is a global hub dedicated to solving critical water challenges by driving innovation in freshwater technology and advancing water stewardship. Built on more than a century of innovation, TWC has coalesced one of the most concentrated and mature water technology clusters in the world from its headquarters at the Global Water Center in Milwaukee, Wisconsin, USA. Recognizing the need for smarter and more sustainable use of water worldwide, TWC also promotes water stewardship as a natural complement to water innovation in the effort to preserve freshwater resources in the Midwest and around the world. Today, The Water Council has established itself as a global leader in the water industry and one of America’s premier economic development clusters as recognized by government agencies, Brookings and the Harvard Business School.

About Marquette University
Marquette University is a Catholic, Jesuit university located near the heart of downtown Milwaukee that offers a comprehensive range of majors in 11 nationally and internationally recognized colleges and schools. Through the formation of hearts and minds, Marquette prepares our 11,100 undergraduate, graduate, doctoral and professional students to lead, excel and serve as agents of positive change. And we deliver results. Ranked in the top 20% of national universities, Marquette is recognized for its undergraduate teaching, innovation and career preparation as the sixth-best university in the country for job placement. Our focus on student success and immersive, personalized learning experiences encourages students to think critically and engage with the world around them. When students graduate with a Marquette degree, they are truly prepared and called to Be The Difference.

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Morningstar Launches Low Carbon Transition Leaders Indexes

Morningstar Launches Low Carbon Transition Leaders Indexes

>> Back to April 2024 Issue

New indexes draw on the strengths of Morningstar’s Sustainalytics & Indexes businesses to deliver diversified, broad exposure to companies leading their sector peers in their readiness for—and action towards—climate transition

Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment insights, recently announced the launch of the Morningstar® Low Carbon Transition Leaders (LCTL) Indexes™, the latest strategic collaboration between leading ESG ratings, research, and data provider Morningstar Sustainalytics and Morningstar Indexes, the world’s fastest growing global index provider.

This series of nine new global, regional, and single country benchmarks is designed to help investors target a broad range of companies from every sector that are leading their peers in their readiness for — and action towards — transitioning to a low-carbon economy. The indexes are underpinned by tangible, forward-looking metrics including the Sustainalytics Low Carbon Transition Ratings, which identify which companies are taking the most action toward aligning with net zero.

 “Investors are focusing on the growing market impact of climate change, whether for managing investment risk or pursuing investment opportunity. Our clients want a simple and transparent way to identify and invest in the companies best positioned to thrive and survive in this scenario. Our Low Carbon Leaders are companies with management that understand how to evolve their business in this context to protect and grow their market share and innovation.” stated Rob Edwards – Global Director of ESG Product Management, Morningstar Indexes

The indexes identify climate transition leaders by grouping companies from the parent index by sector, ranking them according to their composite Low Carbon Transition Leaders Score and capturing the top scoring 50% of each sector by market cap. The Low Carbon Transition Leaders Score considers a company’s current carbon intensity as well as its management score from the Sustainalytics Low Carbon Transition Ratings. The indexes also emphasize companies that report carbon emissions and are reducing their carbon intensity, as well as those whose business activities contribute positively to the environment.

Companies included in the indexes are leading their peers in their approach to climate transition. Examples include Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest semiconductor chip manufacturer and Orsted, the largest energy company in Denmark and a world leader in decarbonization.

“Our clients are grappling with an increasingly complex investment landscape and trying to get better understand how the transition to a low carbon economy will impact markets and companies. They are asking for better indexes, tools and analysis to differentiate between companies that are taking steps to reduce greenhouse gas emissions and are well positioned to succeed in a low carbon economy, and which may be left behind. Incorporating our Low Carbon Transition Ratings within an index methodology enables our clients to apply a forward-looking climate transition risk lens to their global portfolios and invest in leaders across all sectors.” stated Anya Solovieva – Director, Global Commercial Strategy, Climate Solutions, Morningstar Sustainalytics

Morningstar Indexes

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment insights in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $264 billion in assets under advisement and management as of Sept. 30, 2023. The Company operates through wholly- or majority-owned subsidiaries in 32 countries. Follow Morningstar on Twitter @MorningstarInc

About Morningstar Indexes and Morningstar Sustainalytics

Morningstar Indexes and Morningstar Sustainalytics have recently formed a strategic alignment to provide a more holistic and robust ESG offering to Morningstar clients. This growing collaboration includes ESG-related products, insights and research.

As the fastest-growing global index provider for the last two years according to Burton-Taylor International Consulting, Morningstar Indexes was built to keep up with the evolving needs of investors—and to be a leading-edge advocate for them. Morningstar’s rich heritage as a transparent, investor-focused leader in data and research uniquely equips Morningstar Indexes to support individuals, institutions, wealth managers and advisors in navigating investment opportunities across all major asset classes, styles, and strategies. From assessing risk and return with traditional benchmarks to helping investors effectively incorporate ESG objectives into their investment process, our range of index solutions spans an investment landscape as diverse as investors themselves. We help investors answer today’s increasingly complex questions so that they can more easily reach tomorrow’s goals.

Please visit – indexes.morningstar.com for more information.

Morningstar Sustainalytics is a leading ESG data, research, and ratings firm that supports investors around the world with the development and implementation of responsible investment strategies. For more than 30 years, the firm has been at the forefront of developing high-quality, innovative solutions to meet the evolving needs of global investors. Today, Morningstar Sustainalytics works with hundreds of the world’s leading asset managers and pension funds who incorporate ESG information and assessments into their investment processes. The firm also works with hundreds of companies and their financial intermediaries to help them consider material sustainability factors in policies, practices, and capital projects. Morningstar Sustainalytics has analysts around the world with varied multidisciplinary expertise across more than 40 industry groups. For more information, visit www.sustainalytics.com.

©2024 Morningstar, Inc. All Rights Reserved. The information, data, analyses and opinions contained herein include the proprietary information of Morningstar. Indexes are unmanaged and not available for direct investment. Morningstar indexes are created and maintained by Morningstar, Inc. Morningstar® is a registered trademark of Morningstar, Inc.

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IA 30 ImpacAssets 2024 Fund Managers Listr eleased

ImpactAssets 2024 Impact Investment Fund Managers List

>> Back to April 2024 Issue

The new list showcases 155 Impact Fund Managers globally from record number of applicants, highlighting the impact investing industry maturation, as a growing number of funds link manager compensation to impact.

ImpactAssets, the impact investing trailblazer with a decade-plus track record of mobilizing capital for good, recently released the ImpactAssets 50™ (IA 50) 2024, a free publicly available, searchable database of impact investment fund managers globally. The IA 50, now in its 13th year, is designed to offer a simple way to identify experienced and emerging impact investment firms and explore the landscape of potential investment opportunities across diverse impact areas, maturity levels and geographies.

This year’s list is composed of 155 impact fund managers selected from an unprecedented 343 applications, a submission volume that is 15% higher than last year. This growth signals increased interest in the IA 50, alongside expansion and maturation of the impact investing industry at large. The increasing traction also points to a broader shift that embraces impact investing’s critical role in shaping a sustainable future.

The IA 50 includes three distinct categories based on manager experience: the IA 50, IA 50 Emerging Impact Managers, and IA 50 Emeritus Impact Managers. That diversity of experience makes the list a testament to more recently established, ascending managers as well as the deeply experienced pioneers who have consistently maintained a focus on impactful investments and a commitment to driving social and environmental progress. Among the firms recognized this year, nine have been included on every year’s database since its inception in 2011.

“As we celebrate the 13th anniversary of the IA 50, we are witnessing a pivotal shift in finance more broadly: Impact investing is catalyzing a fundamental reorientation of capital that is attuned to the urgent social and environmental challenges we face globally,” said Jed Emerson, ImpactAssets Senior Fellow, IA 50 Review Committee Chair, and Chief Impact Officer at AlTi Global. “The IA 50 2024 is a testament to the industry’s commitment to harnessing the power of capital for good and a preview of the more systemic integration of impact considerations we can expect in the future.”

Key Highlights of the IA 50 2024 Include:

  •  Impact-Linked Compensation on the Rise: This year’s IA 50 managers showcase a marked increase in impact-linked compensation mechanisms, with 23% of all managers stating they integrate impact results into their remuneration strategies. This reflects a notable uptick from the previous year, in which 16% of managers stated they integrate impact into their compensation decisions. This metric highlights a burgeoning trend that rewards not just financial return, but also social and environmental performance. 
  • No Trade-Off on Financial Returns:This year’s IA 50 fund manager data dispels the myth of a trade-off between financial returns and social good. The majority of IA 50 managers target market rate (43%) and above market rate (31%) returns, proving that impact outcomes do not have to compromise financial outcomes. The performance data is equally telling, with 79% of IA 50 managers meeting their finance return target and 21% surpassing them. This compelling data illustrates that the cadre of IA 50 managers are meeting and exceeding financial benchmarks, while driving forward their impactful missions. 
  • Climate Investment Focus: Impact investors are driving progress against the climate crisis, with 39% identifying environmental impact as their primary investment theme. One quarter (25%) of IA 50 managers focus on clean technology, alternative energy and climate change, making that focus this year’s most represented impact theme. 
  • Bridging Equity Gaps for Diverse Beneficiaries: The IA 50 reveals that gender, racial and economic diversity are a focus area for fund managers. One fifth (20%) of IA 50 managers invest in financial inclusion via microfinance, SME finance and/or CDFIs, which are instrumental in narrowing the equity gap by providing critical financial services to marginalized communities. Many IA 50 managers are prominently aligned with key Sustainable Development Goals, targeting, among others, No Poverty (12%), Reduced Inequality (13%) and Decent Work and Economic Growth (19%). The concentrated efforts to elevate traditionally marginalized groups – including an emphasis on supporting underserved communities – affirms the industry’s dedication to a more equitable and just society. 
  • Diverse Fund Leadership: This year’s IA 50 features the most diverse applicant pool ever, with a substantial 60% of applicants boasting investment teams composed of over 50% women and/or people of color. This growth in diversity within leadership positions outpaces previous years, with Emerging Impact Manager applicants leading at 72%, ahead of the core list at 53%, and Emeritus Impact Manager applicants at 46%.

“The IA 50 has become a trusted resource in the industry, not only for its comprehensive listing but also for its rigorous selection process managed by a diverse and expert review committee,” said Sandra Osborne Kartt, CFA, Deputy Chief Investment Officer of ImpactAssets Capital Partners. “The record number of applications this year reflects the growth and maturation of impact investing in the global financial landscape.” 

“Year after year, the IA 50 stands as an essential guide for everyone in the financial ecosystem — from individual investors to global corporations — enabling them to discover and engage at the forefront of impact investing,” added Malaika Maphalala, CPWA®, IA 50 Review Committee Member, and Wealth Advisor and Trust Steward, Natural Investments PBLLC. “The database encapsulates the pulse of the industry, providing a snapshot of the firms poised to make a significant difference through their investments.”

In addition to Jed Emerson and Malaika Maphalala, the ImpactAssets IA 50 Review Committee includes a distinguished group of investors, managers and practitioners who are recognized as trailblazers and authoritative experts in the field.

The IA 50 Review Committee includes: Andrew Lee, Managing Director, Global Head of Sustainable and Impact Investing, UBS Global Wealth Management; Christina Leijonhufvud, CEO, BlueMark and Co-Founder, Tideline; Cynthia Muller, Director of Mission Investment, W.K. Kellogg Foundation; Jennifer Kenning, CEO & Co-Founder, Align Impact; Justina Lai, Chief Impact Officer and Shareholder, Laird Norton Wetherby; Karl “Charly” Kleissner, Ph.D., Co-Founder of Toniic and KL Felicitas Foundation; Kate Starr, Co-Founder and Chief Investment Officer, Flat World Partners; Lauren Booker Allen, Partner, Head of Impact Advisory, Jordan Park; Liesel Pritzker Simmons, Co-Founder and Principal of Blue Haven Initiative; Margret Trilli, CEO and Chief Investment Officer, ImpactAssets; Mark Berryman, Managing Director of Impact Investing, The CAPROCK Group; Rehana Nathoo, Founder & CEO, Spectrum Impact; Ronald A. Homer, Chief Strategist, Impact Investing, RBC Global Asset Management (US) Inc.; and Stephanie Cohn Rupp, CEO and Partner, Veris Wealth Partners.

The application analysis and manager review for the IA 50 is led by ImpactAssets Capital Partners. 

 

About the ImpactAssets 50:
The IA 50 is the first publicly available database that provides a gateway into the world of impact investing for investors and their financial advisors, offering an easy way to identify experienced impact investment firms and explore the landscape of potential investment options. The IA 50 is intended to illustrate the breadth of impact investment fund managers operating today, though it is not a comprehensive list. Firms have been selected to demonstrate a wide range of impact investing activities across geographies, sectors and asset classes.

The IA 50 is not an index or investable platform and does not constitute an offering or solicitation to buy or sell securities or a private placement or recommend specific products. Nor is this an endorsement of any of the listed fund managers. It is not a replacement for due diligence. To be considered for the IA 50 2024, fund managers needed to have at least $25 million in assets under management, more than three years of experience as a firm with impact investing, documented social and/or environmental impact, and be available for U.S. investment. Additional details on the selection process are available here.

The IA 50 Emerging Impact Managers list is intended to spotlight newer fund managers to watch that demonstrate potential to create meaningful impact. Criteria such as minimum track record or minimum assets under management may not be applicable.

The IA 50 Emeritus Impact Managers list illuminates impact fund managers who have achieved consistent recognition on the IA 50. 

About ImpactAssets:
ImpactAssets is an impact investing trailblazer dedicated to changing the trajectory of the planet’s future and improving the lives of all people. As a leading impact investing firm, ImpactAssets offers deep strategic expertise to help its clients define and execute on their impact goals. Founded in 2010, ImpactAssets increases flows of money to impact investing in partnership with its clients through its impact investment platform, philanthropic solutions, and field-building initiatives, including the IA 50 database of private debt and equity impact fund managers. ImpactAssets has more than $3 billion in assets, working with purpose-driven individuals and their wealth managers, family offices, foundations, and corporations. ImpactAssets is an independent 501(c)(3) organization. 

About ImpactAssets Capital Partners
ImpactAssets Capital Partners PB LLC is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. ImpactAssets Capital Partners is a public-benefit LLC fully owned by ImpactAssets. ImpactAssets Capital Partners was created to bring the ImpactAssets platform and customized investment services to institutional investors.

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From Seawater to Drinkable Water Using Wave Power

From Seawater to Drinkable Water Using Wave Power

By Ethan Berg, Climate and Capital Media

>> Back to April 2024 Issue

Oneka Technologies launches a renewable energy-powered way to produce drinkable water 

Climate and Capital Media Featured NewsA Canadian start-up called Oneka Technologies has developed a floating desalination system that can turn seawater into drinkable water using renewable wave power.

Oneka’s small desalination machines require less energy to remove salt than large, shore-based desalination plants and run on renewable wave power. Their sustainable destination machines can provide freshwater to coastal communities and industries with less environmental impact than large-scale, energy intensive land-based systems.

Oneka’s chief innovation officer Susan Hunt said, “Desalination facilities are conventionally powered by fossil fuels, but the world has certainly reached a pivot point. We want to move away from fossil fuel-powered desalination.”

There are currently 21,000 desalination water plants worldwide and that number is expected to grow as global population increases and climate change strains freshwater supplies. One 2020 study predicted the desalination sector would increase 9% annually by 2030.

According to the International Desalination Association, more than 300 million people rely on desalinated water worldwide. At least half of the world’s population “live under highly water-stressed conditions for at least one month of the year,” according to a report published earlier this year.

Oneka’s all-in-one desalination system offers a greener and more distributed solution for producing drinking water from seawater. Seawater is pumped through filters on offshore buoys using reverse osmosis membranes to obtain high-quality drinking water.

The two traditional methods used to desalinate seawater are thermal and membrane. Currently, these methods don’t use renewable energy, so they are a contributor to increasing greenhouse gas emissions. The more energy-intensive thermal-based system heats seawater until it evaporates, leaving the salt behind. The membrane-based technique, reverse osmosis, pushes saltwater through a semipermeable membrane that filters out salt.

 An additional environmental drawback to traditional destination plants is their creation of “dead zones” – areas where salt levels are too high to support marine life. These dead zones form when significant waste streams of highly concentrated salt water or brine have not been adequately diluted before being discharged into the sea.

Oneka’s floating desalination machines absorb energy from passing waves and convert it into mechanical pumping forces that draw in seawater and push it through the desalination system. The fresh drinking water is then pumped to land through pipelines, using only the power generated by the waves.

The company has also found a way to release a lower concentration of brine compared to traditional desalination methods. Susan Hunt said that their system’s buoys take in brine and mix it back in with three quarters of seawater, which is then released back into the sea.

“[Released water] is only about 25% saltier than the original seawater,” Hunt said.

Oneka is working towards turning the ocean into a sustainable and affordable source of freshwater. The company’s co-founder and CEO Dragan Tutic told media that making desalinated water affordable is a key priority for the company.

“The cost of energy can represent up to 50% of the cost of water,” he said.

By utilizing the renewable energy contained in the ocean waves, Oneka has room to grow into the most affordable solution on the market once the company scales its systems and begins mass production.

“Our goal is to approach the global market with our scaled desalination solutions at a lower cost,” Tutic said.

The company has established a subsidiary in Chile after setting up a successful demonstration of the technology there in the ideal wave conditions of Chile’s long coastline and the company is working with communities and the Chilean government to trial a freshwater system there as its first demonstration project.

 

Article by Ethan Berg, an Occidental College graduate, is a dedicated climate journalist and Digital Media Research Associate at Climate and Capital Media

Article reprinted with Permission as part of GreenMoney’s ongoing collaboration with Climate and Capital Media.

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Enoughness The Prequel with Tantoo Cardinal--video

Water + Indigenous Peoples Rights = Risk

By Rebecca Adamson, First Peoples Worldwide

>> Back to April 2024 Issue

Investors are facing four Hard Truths in today’s financial markets:

  • Massive global demographic shifts.
  • Unprecedented demands on natural resources.
  • Significantly larger trillion-dollar capital shifts taking place worldwide.
  • Accelerated spread of increased market volatility.
Rebecca Adamson and Clan Mother Louise Herne of the Haudenosaunee Nation
Rebecca Adamson (left) with Clan Mother Louise Herne of the Haudenosaunee Nation at the October 2023 Mother Law Gathering in St Regis, NY

These are all about RISK – risk identification, risk management, downside risk, risk pricing and risk mitigation are becoming important drivers in this market.

Investors are still looking at their portfolios as an aggregate of individual businesses or even sectors without acknowledging the collective risks to their underlying asset base driven by the actions of their individual holdings. For example, last year Montana did an assessment of the State’s financial system – Access to Finance in Montana. Although 62% of Montana land is used for agriculture, and water demands are increasing due to uncertain precipitation patterns, higher temperatures, and longer growing seasons not a single prediction of higher business risk or unanticipated market changes was mentioned. Yet these weather changes will increase the risk individual ranchers and the agriculture industry face.

The erratic weather patterns and uncertainty of our water supply coupled with an unprecedented growing demand for water raises the potential for new kinds of risk and higher volatility. There is frequent debate as to whether ESG ratings tell us anything meaningful but while there is significant qualitative data there is very little if any quantitative evidence. More empirical evidence and quantitative data should become part of the debate. Better risk-based analytics such as the database on climate patterns and risk matrices maintained by the insurance industry (especially in Europe) include empirical evidence on risks regarding water, the environment and now conflict and famine. The four hard truths in today’s financial landscape suggest correlated risk and expanded quantification of costs should be part of the risk framework.

ENOUGHNESS The Prequel: Indigenous Economies have “values added”. Today’s economy values hoarding, greed and consumption. Using Indigenous values of sharing, cooperation and fairness with the millennial old design principles of indigenous economies see how we can transform today’s finance system to meet the most needs of the most people and provide a sustainable path for our future.

Indigenous People rights and water have been historically under addressed by investors. Due diligence for Water investments is classified as an environmental risk. However, Water and community is just as much of a social risk especially when the rights of Indigenous People are considered.

For example, for years Montana’s water future was tied to over 10,000 outstanding tribal water rights claims. The intensity of mounting demands for water led to the largest tribal water settlement in history. Last year. $1.9 billion was awarded to the Confederated Salish and Kootenai Tribe. Throughout the Southwest and much of the Western region water use and access is subject to Tribal rights. Globally 50% of all inland waters are located on Indigenous Peoples’ territory which like US tribal rights, Indigenous waters are protected by legal frameworks that range from national to international such ILO Treaty 169, the Bio-Diversity Convention and UNDRIP. Indigenous People have the right to Free Prior Informed Consent for any operations taking place on their lands and territories.

In addition to 50% of the world’s inland waters Indigenous Peoples territories encompass at least 30% of the earth’s land surface and if Indigenous Customary Rights are recognized it totals 50% of the land. Currently conservationists have designated 15% of the remaining wilderness as Protected Areas of which over half are located within Indigenous lands. In fact, 80 % of the planet’s remaining biodiversity is within Indigenous territories along with 40% of the terrestrial areas, 33% of the Intact Forest Landscapes and 70% of Tropical Forests. Climate financing, which is 61% debt and 33% equity for a total $632 bn. faces potential high risk in ecoservice investing when you consider 56% of Above Ground Carbon Stock and 50% inland waters are represented. Indigenous Rights can materially impact investor risk, credit events and company operations.

A recent study by Wharton ESG Material Credit Events & Credit Risk, found that projects operating on Indigenous lands or within a 10km distance had as high as 500% higher material events than those operating farther away. Additionally, it was found that the individual projects of companies with poor or low capacity to manage Indigenous risk incurred 3 to 66 times higher risk. Yet research found no evidence for the 1,444 projects in the study factored this potentially 500% higher credit risk into credit ratings, risk mitigation, or the cost of capital.

As illustrated above, in contrast to the conventional idea that Indigenous conflict is primarily with the extractive sector, it now includes natural resources ecoservices, new transition minerals, and clean energy. In January 2024, the San Carlos Apache Tribe and the Tohono O’odham Nation filed a complaint against the Department of the Interior for failing to consult them about the Energy Pattern SunZia Southwest Transmission Project. Billed as our largest clean energy infrastructure project, construction began last September — only for the BLM to order an “immediate temporary suspension” after the tribes objected. Energy Pattern claims, “The delay would likely put SunZia’s commercial viability at risk.”

Vast amounts of the new transition minerals are being found on Indigenous lands: 50% of the Lithium Reserves which do not include the McDermitt Caldera deposits on Paiute and Shoshone lands in Nevada and up to 70% of the nickel, copper, and other transition minerals.

The first evidence based global research on foreign direct investments (FDI), the correlation to Indigenous Peoples (IP) conflict and material concerns for investors found that FDI increases armed conflict across all sectors [Source: Henisz, W.J, Jamison A.S., & Tadmor D (2023) Indigenous Land Claims and Foreign Direct Investment: Evidence of Conflict Impacts from Geo-Spatial Media Event Data]. Tracking over 3000 Indigenous conflicts the study found that where both IP lands and investments exist, there will be an additional 6-7 armed conflict events in the following year. The potential is for conflict to increase given in the current decoupling or de-risking of the US-China supply chain as low to middle income countries are brought into the supply chain.

From 2012 through 2016, I consulted on Social Performance with one of the largest corporations in the world achieving reputation accolades, mitigation of protests, resumption of project operations, and de-risking a potential joint venture’s exposure to human rights violations. Because the Company lacked an internal audit system to track and quantify its Social costs and benefits all the data remained qualitative. This same Company tracked the exact tire pressure for any vehicle in its fleet because Safety was a priority.

As far as life goes, priorities can’t get much bigger than Water. As far as the market, Water is such a huge fundamental risk that it could cause another recession or financial crisis when we reach a tipping point. Several Wharton studies found that companies with poor IP risk management also had low ESG social performance ratings and higher risk. Applying the ESG framework to capture the correlated risk and expanded quantification of Water can position investors to absorb the new risks and volatility of today’s finance landscape.

 

Article by Rebecca Adamson, Indigenous Economist, Cherokee and Founder of First Nations Development and First Peoples Worldwide. A leader, activist and ground-breaking indigenous woman, Rebecca holds a distinct perspective about how indigenous people’s systems thinking and the value system behind indigenous economies can be used to catalyze change. Rebecca’s career spans her time spent in and out of jail working for the Coalition of Indian Controlled Schools to serving as Advisor to the Wharton Business School Initiative on ESG Investing (Environment, Social and Governance). A featured TEDMED speaker in 2014 and early Schwab Social Entrepreneur 2004-2009 with the World Economic Forum, Rebecca uses finance- and market-based strategies to take on global giants and win. Read more about her here in a 2018 interview.  

Rebecca has worked directly with grassroots indigenous communities, and internationally as an advocate of Indigenous self-determination since 1970. Her first five years at the Coalition of Indian Controlled Schools were spent in and out of jail until the Indian Self Determination and Education Act was passed in 1975 making Indian self-determination legal. At First Nations Development Institute, in 1983 Ms. Adamson, with the Ogalala Sioux on Pine Ridge South Dakota, created the first microenterprise loan fund, the Lakota Fund. She became one of the key leaders of the Community Development Financial Institutions (CDFI) movement. In 1994 as Trustee of Calvert Social Investment Mutual Funds Ms. Adamson created Community Notes the first market mechanism for individual investors to invest directly into low-income community development financial institutions (CDFI). Today over $4.2 bn is being invested in CDFIs. In 2000 at First Peoples Worldwide she launched the Indigenous Peoples Rights Investment Criteria used by all the premiere social investment research firms.

Ms. Adamson has won many awards: PBS Change Makers, National Women’s History Recipient, Council on Foundations Scrivner Award for Most Innovative Grant-Maker, John Gardner Civic Leadership Award. She is widely known for her asset-based development strategies and co-author the award-winning book “The Color of Wealth: the Story Behind the US Racial Wealth Divide”. Currently she serves as Advisor to the Wharton Business School ESG Initiative, Trustee Women’s Media Center and Trustee Bay Paul Foundations.

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WERS 2023 Award winning home for Lowest Residential Water Use in the country, water mechanical system designed by Doug Pushard of HarvestH2O

How the Future of Water will Impact Businesses and Communities

By Doug Pushard, KuelWater and HarvestH2O

>> Back to April 2024 Issue
Above – A water mechanical room, fully monitored with online controls, in a Santa Fe, NM home which integrates city water, gray water and rainwater into a system that distributes water inside and outside of the house. The system was designed by Doug Pushard of HarvestH20 and installed by 1st Choice Plumbing. The Libert’s Home Project won the WERS Award in 2023 for the Lowest Residence Water Use in the country.
Doug Pushard Kuel WaterWater is the essence of life, and yet it is almost universally taken for granted. This is at a time when we are seeing unprecedented and dire water issues crop up around the world. Here is a quick sampling of some of the headlines from this just this year… and it is only April:

Mexico City may be months away from running out of water

In winter 2021, more than 150,000 people living in Jackson, Miss., were left without running water and it has gotten worse

Agriculture built these High Plains towns in Colorado, now it might run them dry

Today, water is readily available to most of us, but not all. Per the United Nations, five (5) billion people, or 2/3 of the world’s population, will face water shortages by 2050. This is not just somewhere else in the world; it is also coming to the USA.

Most surprising is that the technology has existed to solve our most pressuring water problems for years, but impediments abound to prevent solutions from being implemented.

Water is managed as a resource (i.e., drinking water) and a waste product (i.e., stormwater). Water is managed as both a business and as a common good. Water is segregated into different operating silos to optimize differing business models. Yet, at the same time, an abundance of water in one operating unit is not considered a resource for another. Population growth and new housing development are two major issues underlying the need to find more water, yet water is not linked to land use management.

Balancing all these issues while ensuring safe, readily available drinking water, attracting and managing employees in today’s complex work environment, keeping both the sewage smell away from population centers and flood waters at bay, is enough to overwhelm most water professionals.

Yet, cracks in the dam are beginning to appear that will dramatically change how we view water.

Business and the Importance of Water

  • General Mills has recognized the importance of water to its businesses and includes the risks to this critical business component as a strategic component. They have committed to advancing water stewardship plans for their most material and at-risk watersheds in their global value chain. They are also exploring, through research and farmer pilots, regenerative agriculture as a means to improve water quality and quantity impact.
  • The Google water stewardship strategy is centered around assessing and addressing water-related risks to their business and the opportunities we have to not just mitigate those risks, but also create solutions that can be scaled beyond our own corporate footprint and to partner with others to address this shared challenge. Their stated goal is to replenish 120% of the freshwater volume they consume, on average, across their offices and data centers, and help restore and improve the quality of water and health of ecosystems in the communities where they operate.
  • More and more businesses now have an executive in charge of Sustainability, and water is managed as critical to the core business.

New Views on Water

Efforts like One Water, National Blue Ribbon Commission, the International Association of Plumbing & Mechanical Officials’ (IAPMO) Water Demand Calculator, and water ratings are pushing new views on water:

  • The US Water Alliance’s “One Water” approach manages all water—whether from the tap, a stream, a storm, an aquifer, or a sewer—in a collaborative, integrated, inclusive, and holistic manner. One Water can change and regenerate how we live, our opportunities, our environment, and our society. This initiative pushes for a new way of viewing and managing water from a utility perspective.
  • The National Blue Ribbon Commission advances best management practices to support onsite, non-potable water systems within individual buildings or at the local scale. They assist code officials in updating building codes to enable new uses for existing and previously untapped water sources.
  • Pipe sizing curves for sizing the pipes installed in every US building have not been updated since the 1940s! Every new building using these antiquated curves is putting in tremendously oversized pipes and costing everyone money. IAPMO has released a Water Demand Calculatorthat accurately sizes the required pipes and is working with permitting agencies to ensure these new pipe calculations are accepted by permitting agencies.
  • A water rating is a performance-based methodology that qualifies and, in some cases, incentives, water efficiency. Applicable for single-family and multifamily residential properties, water ratings can project future water usage while preserving design and product choice freedom. Land use departments could use a water rating, such as the Water Efficiency Rating Score (WERS), to help communities enable sustainable growth while ensuring adequate water supplied for existing residents.
Doug Pushard Day - Doug receiving Santa Fe Mayor's 2023 Proclamation Award
Doug Pushard receiving an award from the Mayor of Santa Fe – A Proclamation calling ‘June 23, 2023- Doug Pushard Day’ for all of his work on water for the City of Santa Fe. (From left to right – Mike Collignon, Green Builder Coalition and co-founder of NGWS; Christine Chavez, Water Conservation Dept. for the City of Santa Fe; Doug Pushard, KuelWater and HarvestH2O and co-founder of NGWS; Glenn Schiffbauer, Green Chamber of Commerce and co-founder of NGWS; and Alan Webber, Mayor of the City of Santa Fe.

New Water Technology Companies

New water technology companies are beginning to push into areas that will cause code officials to become very uncomfortable but will save water and eventually find a way into the market.

  • Orbital graywater recycling shower recycles shower water while taking a shower. This type of device will reduce potable shower water use by 70-80% and is not allowed by current plumbing codes in the United States. Products like these are being installed in Europe today and will eventually find a way into the US.
  • Tiny homes come equipped with graywater systems, which includes kitchen water in the waste stream. Graywater codes exclude kitchen waste from graywater discharge in almost all state and national plumbing codes, yet thousands of these new units are being sold and installed across the country.
  • Treating blackwater to drinking water quality is a known science. Other countries have been doing this for over a decade. Yet only California now has standards to enable water utilities to begin the years-long process of bringing this ‘new’ source of drinking water online.
  • Smart Water meters, both whole house and landscape meters, are becoming widely available. These meters increase homeowners’ awareness of water and directly attack the 10%+ water leakage reported in end-user water usage studies. This will give homeowners newer, more accurate meters than the utilities have installed. The data from products like these will drive increased awareness, because now awareness is down to the fixture level. That was impossible just 10 years ago.
  • Google is partnering with the state of New Mexico using satellite imagery to locate leaking water pipes. New Mexico loses between 40-70% of treated drinking water in some older systems due to breaks and leaks. This new partnership and technology will drive future water savings in New Mexico and hopefully in other states in the near future.

As the above illustrates, technology, policies, and perceptions are changing, water source uses are changing, and weather patterns are changing. All things water are beginning to change and will drive how we view and manage water.

Communities and Water Management

Communities will need to rethink how they manage water. No longer as a silo (i.e., a potable water company, a sewer company, a land use and planning department, etc.), but instead as one collective effort. Water conservation will no longer be a revenue-reducing effort, but a water-producing department. Stormwater and blackwater will be considered potable water sources, not waste streams. Onsite residential reuse (i.e., rainwater, graywater, and/or blackwater) will become commonplace and part of a community’s sustainable growth plan. Integrating management of all water resources and future water demand management through land use codes.

The Next Generation Water Summit (NGWS), held annually in Santa Fe, NM, brings together the building and development community, water reuse professionals and water policymakers in a collaborative setting to share and assist in pushing these efforts forward. Workshops, presentations, tours, and networking have been part of the NGWS since its inception almost ten years ago. The theme of the 2024 Next Generation Water Summit is: Solutions for a Changing World. Join us for this event on June 20th and 21st, live or virtually. Many of the topics in this article will be featured at this year’s NGWS. Join us in creating the water future we all need. 

 

Article by Doug Pushard, the founder of KuelWater. He also founded  HarvestH2o.com over 20 years ago as a personal expression of his interest in the subject of rainwater catchment, water reuse and water conservation. Doug has been published and featured in several magazines, including: ARCSA Newsletter, BUILDERnews, New York Times, High Country News, Back Home, EcoStructure, Green Fire Times, Home Power, Lowe’s Online, OnTap, Plenty, Santa Fe Real Estate Magazine, Santa Fean Magazine, Smart HomeOwner, SUN Monthly, Sustainable Santa Fe, Sustainable Taos, Timber Home Living, Taos News, Turf Magazine, Water Today, Fox News, Green Patriot Radio and others. Additionally, Doug has presented on rainwater, water reuse and water conservation at conferences around the United States.

Doug is an active participant on several code committees, works with communities to update the land use and water codes, teaches water courses at Santa Fe Community College and Red Rock Community College, is a technical advisor to the Water Efficiency Rate Score development team (WERS), a performance-based home and multi-family water efficiency measurement system, a WERS certified instructor, a Qualified Water Efficient Landscape (QWEL) irrigation and graywater certified instructor, a life-time member of American Rainwater Catchment System Association, and is a co-founder of the Next Generation Water Summit.

Energy & Climate, Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Economic and Water Impacts of the EPAs Slaughterhouse Rule

The Economic and Water Impacts of the EPA’s “Slaughterhouse” Rule

By Marc Yaggi, Waterkeeper Alliance

>> Back to April 2024 Issue
Pictured is reported to be the largest hog slaughterhouse in the world. It is located in Tar Heel, North Carolina, operates under Smithfield Foods, Inc., and is wholly owned by the WH Group. Approximately 35,000 hogs are slaughtered there each day and waste is discharged into the Cape Fear River. Photo credit: Rick Dove, Waterkeeper Alliance

Marc Yaggi, Waterkeeper AllianceThe U.S. Environmental Protection Agency (EPA) has a decision to make. Right now the agency is considering new water pollution standards for slaughterhouses and rendering facilities in response to lawsuits from environmental organizations. These standards are urgently needed to correct a long-standing regulatory failure to control one of the nation’s largest industrial sources of nitrogen and phosphorus pollution. Despite its stated mission to safeguard human health and the environment, EPA’s current regulations do not address phosphorus discharges, and the agency has neglected to update water pollution standards for other harmful pollutants from this industry for nearly twenty years, as required by the Clean Water Act.

This is no accident. Large industrial animal agriculture companies have invested millions of dollars in lobbying to ensure the status quo, which in turn, protects their growing profits. This includes U.S. domestic sales, which were estimated at $267 billion in 2021, and a projected goldmine of global industrial meat production associated with expansions of beef, pork, and chicken exports since 2010. It is reported that the four largest meat processing conglomerates operating in the U.S., which control approximately 55 percent to 85 percent of the market for pork, beef, and poultry, have collectively increased their gross profits by 120 percent and net income by 500 percent since 2019.

As global meat production continues to rise to meet a projected doubling of meat-based protein consumption by 2050, corporate owners of these large facilities are not incentivized to modernize their systems, treat their waste, and control their discharges that typically contains nitrogen and phosphorus, as well as blood, fat, oil and grease, fecal bacteria, disease-causing pathogens, detergents, and heavy metals. Without regulatory scrutiny and guardrails, “Big Agriculture” will persist in operating without consequences, reaping all the profits while communities drown in its toxic brew of pollution.

Slaughterhouses that discharge pollution directly into US waterways - Waterkeeper Alliance

According to EPA’s data, there are 5,055 slaughterhouses and rendering facilities in the U.S. and 3,879 of those facilities are discharging approximately 112 million pounds of nutrients like nitrogen and phosphorus into 2,736 water bodies every year. These massive, untreated discharges are directly linked to significant impacts like water contamination and algal blooms, which can render water unsafe for drinking, unfit for recreation, and uninhabitable for aquatic life. Communities exposed to nitrogen compounds in drinking water are linked to higher incidences of colorectal cancer, thyroid disease, birth defects, and —in infants under six months of age— “blue baby syndrome,” a potentially fatal condition.

While industry takes advantage of the economic benefits of their polluting business practices, they simultaneously jeopardize the future of rural America’s economic development in multiple ways. Local economies suffer from the devastating consequences of nutrient-fueled algal blooms, which deplete oxygen in water and result in fish kills and “dead zones” in iconic water bodies like the Chesapeake Bay and the Gulf of Mexico. Hazardous pollution from large slaughterhouses disproportionately impacts local drinking water sources, fisheries, recreation, and tourism in rural areas, while also harming community health and finances.

Contaminated water and land represent significant economic liabilities, with pollution from large slaughterhouses driving down property values for residences and businesses while escalating public health risks and associated costs. Further, the dominance of large processing facilities over smaller, less polluting plants negatively affects small and family-owned farms that rely on these independent local facilities for processing.

The pollution originating from slaughterhouses and rendering facilities also compounds environmental injustice, disproportionately affecting low-income communities and communities of color. EPA data reveals that 74% of slaughterhouses directly discharging pollution into rivers and streams are located within one mile of under-resourced and low-income communities, as well as communities of color. Despite this acknowledgment, the agency has taken minimal action to shield these vulnerable communities from the unequal burdens imposed by corporate interests. Instead of perpetuating these injustices, EPA has an opportunity to right this wrong through proposed new water pollution control standards for larger, more polluting slaughterhouses and rendering plants while avoiding significant impacts and costs to small firms and facilities.

Slaughterhouses that discharge indirectly into waterways - Waterkeeper Alliance

Unfortunately, the agency’s current preferred rulemaking option – Option 1 – is the weakest option and would still allow thousands of larger slaughterhouses and rendering plants to continue their business-as-usual practices that create local environmental and economic harm. At a minimum, EPA must adopt the pollution standards set forth in the proposed rule Option 3, which would include nitrogen, phosphorus, and conventional pollutant limits on 133 facilities that directly discharge pollutants into waterways and 1,485 facilities that discharge to municipal wastewater treatment plants. EPA estimates that Option 3 will cut the total amount of nitrogen pollution from the industry by 83 percent (or 76 million pounds annually) and phosphorus pollution by 94 percent (or 20 million pounds) with tangible public health, environmental, and economic benefits for communities and local businesses.

It is crucial for EPA to address pollution stemming from larger slaughterhouses and rendering facilities, including those indirectly discharging waste to municipal wastewater treatment plants. These treatment plants are frequently overstressed, underfinanced, and ill-equipped to handle industrial waste. Continuing this practice allows the industry’s waste and harmful pollutants to pass through the system and discharge into waterways, likely contributing to 73 percent of treatment plants evaluated by EPA violating their Clean Water Act permit limits, and forcing the clean-up costs onto the public. EPA has also determined that interference from discharges to municipal wastewater treatment plants is costly in terms of worker safety, physical plant integrity, effectiveness of operation, and liability for permit violations.

It is important to note that there is effective technology that is readily available and widely used for wastewater treatment globally, which slaughterhouses and rendering plants can use to comply with the pollution standards in EPA’s proposed rule. Under Option 3, industry compliance with the pollution standards is also economically achievable. For instance, EPA projects that 99.1 percent of discharging facilities would incur expenses amounting to less than one percent of their revenues to comply with Option 3 limits for nitrogen and phosphorus. By modernizing major corporate processors, stringent water pollution standards would stimulate investments in American infrastructure and foster employment opportunities in rural areas, including an estimated net increase of 1,603 local jobs for operating and maintaining the industry’s upgraded treatment technology.

It is evident, both environmentally and economically, that EPA must correct its decades-long inaction by firmly rejecting industry influence and committing to a modernized, robust regulatory framework that supports an investment in the health and sustainability of rural communities, life-supporting waterways, and the economy. Our communities deserve nothing less than the highest level of clean water protections as mandated by law.

 

Article by Marc Yaggi is Chief Executive Officer of Waterkeeper Alliance, a U.S.-based, global water advocacy organization. Before joining Waterkeeper Alliance, Marc was a Senior Attorney and Watershed Program Director for Riverkeeper, Inc. and previously served as a Staff Attorney with the Environmental Law Institute in Washington, D.C. He has a degree in Administration of Justice from The Pennsylvania State University and a J.D. and an LL.M in Environmental Law from the Pace University School of Law.

Energy & Climate, Featured Articles, Food & Farming, Sustainable Business

Investing in the Future of Water and Sanitation

Investing in the Future of Water and Sanitation

By Elan Emanuel, WaterEquity

>> Back to April 2024 Issue
Photo courtesy of WaterEquity/water.org

Elan Emanuel WaterEquityAccess to safe water and sanitation is a fundamental human right under binding international law. Yet today, a global water crisis still persists. 2.2 billion people—or 1 in 4—still lack access to safe water and 3.5 billion people—or 2 in 5—lack access to safely managed sanitation. While gains have been made over several decades, the effects of climate change have become a large and looming factor, halting progress made. Though the role of the public sector remains paramount in addressing the crisis, private impact investment has recently also emerged as a powerful tool.

Investing in Household Water and Sanitation Solutions

Impact investing focuses on generating positive social and environmental impact while seeking financial returns. In the realm of water and sanitation, investment plays a pivotal role in supporting innovative solutions, especially at the household level. Among low-income consumers, at least 600 million people could access water and sanitation products, services, and upgrades if financing was available, equating to what WaterEquity estimates as $35 billion of market demand over the next decade.

WaterEquity has approached this market opportunity through an investment strategy focused on providing debt capital to financial institutions in emerging markets to expand water and sanitation lending. These financial institutions use this capital to grow their water and sanitation microloan portfolios, as well as to on-lend to local enterprises delivering water and sanitation innovations, products, and services. Since our start in 2016, WaterEquity has deployed more than $360 million in capital to this strategy across four private investment funds, reaching more than 5 million people with increased access to safe water and sanitation.

Over 93 percent of the low-income end-clients taking out these microloans are women. This is no accident, as the funds have specifically targeted women beneficiaries by integrating gender into our investment and decision-making processes. And the microloans are repaid at the average rate of 97-99% within 12-24 months. Ensuring equitable access to safe water and sanitation cannot be accomplished without giving women the power and the capital to solve for their futures.

Investing in Climate-Resilient Infrastructure

Installation of water pipes, courtesy water
Photo courtesy of WaterEquity/water.org

Financing the “last mile” of water and sanitation access at the household level will only take us so far in reaching the billions affected. There is also a tremendous need and market opportunity for sustained investment in potable and wastewater infrastructure seeking to increase access to water and sanitation services, improve water quality, and mitigate the impacts of water scarcity. Moreover, with traditional infrastructure often vulnerable to damage from extreme weather events, investment in resilient systems is essential for ensuring sustainable access to water and sanitation services.

By investing in climate-resilient infrastructure, WaterEquity’s Water & Climate Resilience Fund aims to reach 15 million people with water and sanitation access, and indirectly benefit millions more through improvements in water quality and scarcity. Investments include government tendered projects such as the construction of decentralized water treatment plants, the upgrading of existing infrastructure to withstand extreme weather events, and the implementation of smart water management systems. The Fund will also invest directly in growth companies that are developing and deploying innovative technology and services within the sector. These projects and companies enhance the reliability and efficiency of water and sanitation systems at scale, while also contributing to the overall climate resilience of underserved communities.

Conclusion

Impact investing has the potential to transform the landscape of water and sanitation, addressing the complex challenges posed by the water crisis, climate change, and gender disparities. By supporting innovative household solutions and investing in climate-resilient infrastructure, impact investors can contribute to the Sustainable Development Goals and improve the well-being of communities around the world, aligning values with the potential for financial returns. This holistic approach not only addresses immediate water and sanitation challenges but also builds resilient communities capable of withstanding the impacts of a changing climate. Through strategic and socially responsible investments, we can ensure a future where safe water and sanitation are accessible to all.

water.org photo of woman gathering safe drinking water from pump
Photo courtesy of WaterEquity/water.org

 

Article by Elan Emanuel, the Chief Investor Relations Officer at WaterEquity. Elan is responsible for mobilizing investments and partnerships with a broad portfolio of investors to accelerate WaterEquity’s impact addressing the global water and sanitation crisis. He brings 15+ years of experience in developing public-private partnerships to this role. WaterEquity emerged out of Water.org and was cofounded by actor Matt Damon and Gary White.

 Prior to WaterEquity, Elan led Fair Trade USA’s global cocoa program, where he established and directed strategic partnerships with large multi-national corporations, NGOs, and agricultural cooperatives. Additionally, Elan has extensive experience in the legal sector, domestically for Hanson Bridgett LLC, and internationally for the International Criminal Tribunal for Rwanda and the Sierra Leone Ministry of Foreign Affairs. Elan holds a Bachelor of Arts in History from the University of Michigan, Ann Arbor, and a Juris Doctor from the University of California, Berkeley School of Law.

Energy & Climate, Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Water Treatment plant photo by tuastockphoto

GreenMoney Interviews: Kirsten James on Ceres’ Valuing Water Finance Initiative

>> Back to April 2024 Issue
Above – Water Treatment plant photo by tuastockphoto courtesy of Ceres

Cliff Feigenbaum interviews Kirsten James

As the global water crisis worsens, so do financial risks facing companies and their investors. Kirsten James, senior program director of water at the sustainability nonprofit Ceres, answers questions from Cliff Feigenbaum, GreenMoney founder about the Valuing Water Finance Initiative, which is a global, investor-led effort driving companies to prioritize water risk and act as responsible water stewards in their operations and supply chains.

Cliff:  What work has Ceres done related to water?

Kirsten: Freshwater is essential for people, ecosystems, and business. Growing water scarcity and pollution is threatening these systems and slowing the pathway to a climate resilient future. Research shows we’ll be unable to meet even 56 percent of global water demand by 2030. No industry is immune from financial risks stemming from this crisis.

Seeing this writing on the wall, we’ve spent more than a decade establishing the business case for the private sector to act on water risk. We’ve worked closely with investors on integrating water risk into their investment decisions and developed resources to help them understand water risk in their portfolios. Our research and corporate benchmarking has shed light on industry practices threatening freshwater supplies and how companies are responding. This information has empowered investors with the guidance and the data they need to evaluate how companies are managing water risk.

Cliff:  How did this work pave the way for the Valuing Water Finance Initiative?

Kirsten: Through this pioneering work we did on water risk, we saw the need for ambitious action to match the scope of the water crisis and the systemic risks affecting communities, nature, and economies. We developed the Valuing Water Finance Initiative, aimed at driving companies to make water risk and water management a priority in their business strategies. Because water is key to their success as a business.

This work is hitting home with investors and the initiative has taken off. Just two years after we launched it, nearly 100 investors representing more than $17 trillion in assets have joined. These investors are committing to engage with 72 large companies from four water-intensive industries—food, beverage, apparel, and high-tech—on their water management practices.

Cliff:  How does Ceres see investors’ efforts through the Valuing Water Finance Initiative leading to action on the ground?

Kirsten: Companies aren’t just at risk from dwindling water supplies and polluted water, they’re making these risks worse by mismanaging and undervaluing water resources. Investors play a crucial role, as shareholders of companies, in compelling businesses to preserve and protect the water supplies they depend on.

Through the Valuing Water Finance Initiative, investors are encouraging companies to develop holistic water management strategies by focusing on six Corporate Expectations for Valuing Water. These expectations set ambitions around the full range of water issues that large companies should meet by 2030. This timeline is critical to slowing the pace of deteriorating water resources across the globe and meeting the United Nations 2030 Sustainable Development Goal for Water (SDG6).

Investors, through dialogues and, in some cases, shareholder resolutions and other strategies, are making progress working with companies on taking important steps, such as conducting water risk assessments in their supply chains and developing strategies to act on this critical information. Managing water risks in their supply chains is critical because they make up a significant portion of where companies depend on and have an impact on water.

Cliff:  How are you gauging companies’ progress?

Kirsten: Ceres’ recently released benchmark report assesses how the 72 focus companies are performing against the Corporate Expectations. It is an important resource for investors as they continue to engage with companies because it provides more context around companies’ water stewardship efforts—where they are excelling, where they are lacking, and how they can accelerate or expand their efforts.

The analysis, which we developed using publicly available company disclosures, offers a snapshot of where each company is on its water stewardship journey. No company is leading the way or close to meeting the Corporate Expectations lined out by investors, but we were encouraged to see 11 of the 72 companies making substantial progress. However, with only seven years until 2030, there is significant work ahead for most of the companies we assessed.

Irrigation pipe photo by Surachat, courtesy of Ceres

Cliff:  How can companies step up their actions in the face of worsening water scarcity and pollution and related financial risks?

Kirsten: Results vary by company and industry, but our research highlighted key areas for improvement. For example, many companies are using less water, but they need to make similar progress in addressing the impact their operations and their suppliers’ operations have on polluting water. This will help them bridge other gaps, such as protecting the ecosystems that are vital to freshwater supplies and ensuring that the communities where they operate and source commodities from have clean water.

Most companies can also do better ensuring that their public policy activities support sustainable water management. Advocating around water issues with governments, businesses, and civil societies can strengthen and broaden companies’ water stewardship efforts and impacts.

Many companies have made notable strides. They are demonstrating innovative and effective water solutions, including working with other stakeholders to address shared water challenges. Peers can learn from these examples in building their own water management strategies.

Cliff:  How can investors accelerate action?

Kirsten: In our discussions with investors, they have said they will look to companies to implement and advance leading practices, starting with risk assessments of their entire value chains and setting targets that home in on high-risk watersheds. Investors will also consider whether companies’ boards and senior leadership oversee water management strategies and integrate water risks and opportunities into strategic business planning for direct operations and supply chains.

Companies must take a leading role in tackling water risks impacting global water resources and economic security. Investors can fuel progress by taking an active ownership approach and using their power of influence to urge companies to understand their water vulnerabilities and take deliberate steps to avert financial fallout from the unfolding water crisis.

 

More About Kirsten:

Kirsten James directs Ceres’ strategy for mobilizing leading investors and companies to address the sustainability risks facing our freshwater and agriculture systems. Her work includes leading the Valuing Water Finance Initiative, an investor-led effort which seeks to drive corporate action on water-related financial risks. Previously, Kirsten served for five years as the director of California policy and partnerships at Ceres.

Prior to Ceres, Kirsten worked for nine years at a regional water resource-focused NGO, as their Science and Policy Director. She graduated with a bachelor’s degree from Northwestern University and a master’s degree in environmental science and management from the Bren School at University of California Santa Barbara.

Energy & Climate, Featured Articles, Food & Farming, Impact Investing, Sustainable Business

Praxis Mutual Funds Releases “Real Impact 2023” Report

Praxis Mutual Funds Releases “Real Impact 2023” Report

>> Back to March 2024 Issue

Highlights how unique stewardship investing approach promotes real-world change through seven impact strategies

Real Impact 2023 from Praxis Mutual FundsPraxis Mutual Funds®, a leading faith-based, socially responsible family of mutual funds from Everence Financial®, recently released its annual impact report. 

The Real Impact 2023 Report shares specific real-world impacts arising from the Praxis team’s work to fulfill its stewardship investing mission.

“We are proud to celebrate 30 years of serving you, our investors, as you align your faith, values and investments in a way that makes a difference,” writes Praxis Mutual Funds President Chad Horning, CFA® in the report’s introduction. “In this report, our team shares the many ways your participation with Praxis creates ripples of positive impact in communities around the world.”

The report, like the team’s work, is organized around the seven distinct impact strategies that make up the Praxis ImpactX framework:

  • Values + ESG Screening. Praxis screens exclude 8-20% of companies in our stock indices.
  • Proxy Voting. Praxis voted on nearly 18,000 proposals on behalf of shareholders.
  • ESG Integration. Praxis doesn’t just screen out; we also invest in – or invest a higher weight into – companies with better ESG risk/opportunity profiles.
  • Positive Impact Bonds. 36% of holdings of the diversified Praxis Impact Bond Fund were invested in impact bonds as of Dec. 31, 2023.
  • Company Engagement. Topics include human rights, online child exploitation, the low carbon transition, antibiotic overuse and more.
  • Advocacy and Education. Praxis supported three initiatives addressing the SEC, U.S. Government and U.S. House of Representatives on issues of concern to values-driven investors.
  • Community Development Investing. Approximately 1% of Praxis Mutual Fund assets are dedicated to high-impact community development investments.

“The team at Praxis works hard to provide investment options that pursue market-level returns while also aligning investors’ faith and values with their investments,” said Mark Regier, Vice President of Stewardship Investing. ”This year’s report delves into many key themes for Praxis including encouraging the low carbon transition, addressing inequality and supporting low income and underserved communities and engaging companies on good corporate governance.”

Download the Real Impact 2023 Report

 

About Praxis Mutual Funds
Founded in 1994, Praxis Mutual Funds is a leading faith-based, socially responsible family of mutual funds designed to help investors integrate their finances with their values. Praxis is the mutual fund family of Everence Financial, a comprehensive faith-based financial services organization helping individuals, organizations and congregations. To learn more, visit praxismutualfunds.com and everence.com, or call 800-348-7468.

Consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. The fund’s prospectus and summary prospectus contain this and other information. Call 800-977-2947 or visit praxismutualfunds.com for a prospectus, which you should read carefully before you invest.

Mutual fund investing involves risk. Principal loss is possible. The Fund’s investment strategy could cause the fund to sell or avoid securities that may subsequently perform well, and the application of ESG (environmental, social, governance) and/or faith-based screens may cause the fund to lag the performance of its index.

Praxis Mutual Funds are advised by Everence Capital Management and distributed through Foreside Financial Services, LLC, member FINRA. Investment products offered are not FDIC insured, may lose value, and have no bank guarantee.

Additional Articles, Energy & Climate, Impact Investing, Sustainable Business

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