Water risks and and an Internet program from iiWisdom are the subjects of my last notes and photos from attending the Council of Institutional Investors Fall 2015 Conference in Boston. The Deep Dive on Water Risks was hosted by Ceres.
The interactive Internet program from iiWisdom looks to be very handy for finding information contained in corporate proxies. Feel free to post corrections, and additional material relevant to these two topics using the site’s comment feature. Find more posts from the conference on Corporate Governance or on Twitter by searching #CIIFall2015.
Building Blue Into Mainstream Investment Practices: An Investor Deep Dive on Water Risks and Opportunity Integration in Investment Management Decisions and Beyond
The Investor Network on Climate Risk helping investors deepen and broaden their knowledge of water risks and other issues associated with climate change, as well as opportunities.
There are water risks in the social license to operate. More and more people are pushing back on corporate activities. There is rapid regulatory change and a lack of existing regulations to adequately address the issues. India has been downgraded as a place of investment partially due to water issues. An Investor Handbook for Water Risk Integration.
Ceres recently interviewed 35 global asset owners and fund managers with over $6 trillion in collective assets under management on how they are integrating Environmental, Social and Governance (ESG) factors and in particular water risks into investment decisions. The findings offer recommendations on how to integrate water into investment policies, portfolio management, strategic planning and client relationship building. The Handbook serves as a stepping-stone for managers just beginning to integrate (ESG) and water risks and opportunities into their thinking, as well as for advanced investors looking to deepen their practices.
The “How to Guide” of ESG and Water Risk Integration follows the publication of the Ceres 21st Century Investor: Blueprint for Sustainable Investing, which provides specific steps that help asset owners, and managers steer a sustainable investment course. It also follows the publication of the Ceres Aqua Gauge, which provides a framework for both companies and investors to evaluate their exposure to water risks and develop mitigation strategies across their value chains.
Ceres looks at institutional support structures, across asset class themed analysis, portfolio analysis, buy/sell decisions
Buy/sell – water dependency, security, response (corporate v industry response). We are feeding ourselves thirsty re supply chain risks. Cotton is very thirsty crop. Most have targets in manufacturing but not at the farm level. The United Nations Sustainable Development Goals (SDGs), adopted in 2015, call for substantial increases in water-use efficiency across all sectors to ensure sufficient supplies of clean water.
Ceres engaged Dean Foods on their supply chain and concluded that in comparison with stated peers Campbell’s Soup and ConAgra, Dean Foods provides inadequate information to investors describing current assessments of water risks in its direct operations and supply chain and the company’s efforts to diminish social and environmental impacts related to fresh water use.
Hugh Brown of Florida SBA said they have focused much more on the G portion of ESG. Florida tries to be proactive. They have been mostly passive in this area but are starting to engage. Water has become another item on the agenda. Right now, there are more numbers behind the G and more numbers help drive attention. We are in early stages with regard to focusing on environmental and social issues.
Stu Dalheim of Calvert Investment said that water risk is embedded into their investment approach when it comes to apparel, food, and beverage, mining, power, etc. He mentioned the importance of the Carbon Disclosure Project. Ceres is helping to drive awareness of water risks. Others mentioned were MSCI, Sustainalytics, and WRI Aquaduct. Natural capital declaration to map WRI information with corporate assets. Interest on the opportunity side. Water fund. (pipes, pumps, filter systems — not best practices companies) Credit risk tool. Water prices are increasing. Will drive further progress.
Daniel Wild, RebecoSAM – founded 1995. Reaching out to companies to get the data. Covers 3000 companies in assessment. About 870 EW participating. Awareness, exposure, response, results. Tries to work with an industry as a group to come up with ways to address. Part of the normal risk. Need to show materiality. Quant analysis can show how results can create value. $20T problem of water infrastructure to maintain and fix. Regulatory issues, corruption and most not well set up public private partnerships.
See correlation between good governance and good water stewardship. More water data needed. We currently have more mobile phone connections than water connections. Sustainable stock exchange movement driving disclosure. Working to get global exchanges to require disclosures around ESG practices. Green bond policies being worked on by Ceres.
Interactive Governance Platform: Sneak Peak at New Proxy Portal Revolutionizing Online Proxy Reading and Research – Hosted by iiWisdom
We help companies tell their governance stories using the most sophisticated technologies available today. Investors want to read your proxy online, yet most have been built for print. iiWisdom provides a digital solution designed by institutional investors to match their workflow. They host your proxy site on their investor portal and provide an interactive proxy link for your investor relations web page. It transforms a proxy statement into a beautiful, easy to read, highly interactive site.
I must say, I’ve been using their tool when doing the research to vote my proxies. In most instances, I’m just taken to the SEC filing… although I get their a little quicker than using other platforms I can access. However, where iiWisdom has reformatted proxies, such as for Microsoft, I found I could find what I’m looking for a little faster and it was certainly a more pleasurable aesthetic experience. Try it out and let me know what you think. I hope they are able to sign up most companies. Free for users; good for issuers.
That wraps up my coverage of the Council of Institutional Investors Fall 2015 Conference in Boston. Find more posts from the conference on Corporate Governance or on Twitter by searching #CIIFall2015.