Impact Blog
Midyear update: Engaging on water as a critical issue

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By Stuart Dalheim, Shareholder Engagement Manager, Calvert Research and Management

      Washington - As investor interest in ESG matters has increased, water conservation has emerged as a key area of focus for investors and companies. The World Economic Forum ranked water scarcity among the top five global risks in The Global Risks Report in 2018, which catalogs the trends that global economic leaders believe are most important in shaping the global economy over the next 10 years. 1

      Given the critical importance to human survival and widespread agreement on the risk to business and economic development that water scarcity represents, water is central component of Calvert's research and analysis, and its dialogue with companies. Calvert's engagement starts with asking companies to report on their risk exposure in their own operations and supply chains. We move to a discussion of policies and programs the companies have in place - or could pursue - to reduce water use and the impacts to the environment and local stakeholders. Finally, we discuss measures for their supply chains, which in many cases represent a company's most significant risk and impact.

      Current engagement efforts

      During the most recent proxy season, Calvert filed a shareholder proposal with a packaged foods company asking for a water stewardship policy, and withdrew that proposal when the company agreed to develop one. The policy has been published and dialogue is continuing on implementation and reporting.

      Dialogue has continued with a large meat production and distribution company on water risks and impacts in its own operations and in its supply chain, with particular focus on standards for the farmers that it sub-contracts with to rear the company's animals. In addition, Calvert is participating in a United Nations Principles for Responsible Investment (UN PRI) initiative to engage food and agriculture companies on water risk in company supply chains. Calvert is leading the engagement with one of the companies.

      Calvert also participated in a collaborative effort coordinated by CDP and took the lead in reaching out to a dozen companies from sectors for which water is a material issue, but which did not respond to CDP's 2017 water questionnaire.

      Calvert also spoke to companies, investors and nonprofits at the Innovation Forum for Sustainable Agriculture's event in April, addressing the investor perspective on water-related risks in the supply chain for food and agribusiness companies.

      Bottom line: Calvert's engagement on water issues continues to be a critical part of our advocacy strategy. We will continue to ask companies to consider their water risk and usage in their own operations and in their supply chains.