Risks of Water Scarcity: Preliminary Findings

,17 August, 2004 | Stockholm, Sweden The main drive behind this meeting was to present the preliminary findings of the study, Risks of Water Scarcity: a business case for financial institutions which was carried out in a collaboration between the Stockholm International Water Institute (SIWI) and UNEP FI. Some of the conclusion in the report refer to:

  • Water scarcity can become, if not already, a considerable source of risks to projects and investments. The corporate sector need to assess this fact and work together with society to make progress.
  • Assessment of water scarcity risk must be included in project planning, business projections and business opportunities due diligence
  • A collaborative approach with relevant stakeholders can build credibility, trust and much needed partnerships to anticipate and mitigate negative risks.
  • Financial institutions need to understand how water scarcity will affect their core businesses and that of its business partners.
  • Water supply problems can open a window to improve operational performance and efficiency. This can give a company a competitive advantage on its peers and this is an investment opportunity for financial institutions to propose sustainable improvements which can benefit business and water sustainability.
After the presentation of project, the meeting continued with an open dialogue with the different participants which allowed to cover key issues such as:
  • Are water issues an issue for financial institutions?
  • How to deal with these risks. How can the financial sector get involved?
  • How can financial institutions become more active in financing infrastructure?
  • Are Environmental Impact Assessments sufficient to mitigate water related risks?
The African region was mentioned with particular interest as to how to create effective water governance which can help mitigate risks to investments / projects and promote more funding for the sector. A number of case studies from Africa were suggested which highlights the importance of dealing with water scarcity (in its many dimensions, quantity, quality and institutional) within financial institutions in the due diligence process. Moreover, the cases also established a clear need for financial institutions to become more active at different levels to reduce risks related to the political and regulatory conditions of a particular country, thus engaging into dialogue with relevant stakeholders can be an empowering method that can be used. Likewise, the Latin American region was discussed do to its different institutions dimensions which cause water scarcity and its effects to investments and financial institutions. A problematic which continues to enforce the need for action is the lack of knowledge in risk management from Latin America thus strengthening knowledge on this area on how financial institutions are affected by water related risks has been the entry point for a multitude of issues to seek private sector involvement.

Presentations

List of Participants

  • Pelle Persson, Swedish International Development Cooperation Agency
  • Hans Olav Ibrekk, Ministry of Environment Norway
  • Ulrik Weuder, UNEP GPA
  • Lennard  Abrams, World Bank
  • Dirk Reinhard, Munich Re
  • Darren Saywell, WSSCC
  • Sunanda Kishore, World Bank
  • Anders Jägerskog, Ministry of Foreign Affairs of Sweden
  • Franz Knecth, Connexis
  • Tareq Emtairah, IIIEE
  • Helena Skeppner, Swedbank
  • Claes Calemark, Nordea
  • Holger Hoff, Dialogue on Water and Climate
  • Ewa Münster, Svenska Handelsbanken
  • Kajetan Hetzer, SNS Asset Management
  • Johan Kuylenstierna, SIWI
  • Paul Clements-Hunt, UNEP FI
  • Alberto Pacheco Capella, UNEP FI