Huge wealth fund will press business on waterSeptember 2009
One of the world’s largest sovereign wealth funds has announced that it will start pressuring companies with high water-related risks to report on their progress on the issue.
The €276 billion Norwegian Government Pension Fund will demand the information from about 1100 companies in which it has holdings worth €33bn, saying it believes good water risk management could be critical to future performance.
The fund said it would publish a list of water-reporting and risk-management ‘expectations’ it has for portfolio companies, and has named seven sectors as high risk: food, agriculture, paper, pharmaceuticals, mining, manufacturing and power, and water supply.
In its latest quarterly report the fund, which is Europe’s largest pension scheme, said: ‘Many companies in risk sectors and regions do not have a proper water policy with risk assessments and performance reporting. Shortcomings in companies’ water- management reporting makes it difficult to assess the degree of risk exposure resulting from their own operations or their supply chains.’
Norges Bank Investment Management, which runs the fund’s assets, has added the ‘active ownership’ of water management to its investment focus areas.
The move is further evidence of the increasing interest in water as a CSR issue. This summer, Europe’s first water index was launched, in Italy.
Ecofact has won a four-year contract to provide ethical screening for the Norwegian Government Pension Fund.The Switzerland-based CSR consultancy will take on the fund’s global portfolio.
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