3. Results of the sample portfolio analysis
A sample portfolio, encompassing 26 different industries was compiled in order to test the methodological development of the equity portfolio water risk analysis (sample portfolio compilation in the Annex). Industries from different countries with different risk profiles (high, medium and low) were included in the sample portfolio. Figure 6 shows the water intensity and water risk of the different industries in the portfolio. The following two subsections discuss the results in terms of water intensity and water risk in more detail.
5
Very high
4
Medium to high
3
Low to medium
2
Low
1
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m ic
W at er
ut ilit ite s on du ct o Be r ve s ra ge C s El hem ec tri ical s c ut ilit i M Oil es et a &G Pe ls & as rs on Min in al g p Fo rod uc od El t ec s pr tr od Te ica uc le ch ts qu no ip lo m gy en ha Bu t rd ild w in ar g Te e p xt ile rod uc s & t Ap s pa re To l ba cc o In su ra nc e Ba R ea nks le Au sta te to m Sp ob ec ile ia lty s r C on eta Te il t le co ain e m rs m & un Pa ic at pe r & io n Fo Bi H ot ot re el st s, ech no R es lo Ph tau gy ar ran m ac ts & eu tic a So ls ftw ar e
Extremely high
Figure 6: Water risk and water intensity score per industry
3.1.1 Water intensity The results show that the industry water intensity is relatively aligned with the materiality assessment of the industries according to SASB. The industries that are categorised as having “material� water and wastewater risks were found to have the highest water intensity. This indicates that the methodology with which SASB deduced their materiality assessment is quite robust. Further, it also adds additional information which cannot be covered when only considering the water intensity. The only
GICS industry with material water risks and low water intensity is Personal Products. Most of the industries that were categorised as being industries where water risks are not material do also have low or low to medium water intensities. Two industries have a low to medium risk score despite having medium to high or very high water intensity. This is the case for Pulp & Paper and Containers & Packaging.
Methodological development of water risk analysis of equity investment portfolios | 17
