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Fat Tail Risk is Real: Market Signals and the Business Opportunity Cost from Water

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The last few months have seen a number of press releases and environmental finance panel discussions around the issue of embedded carbon and water risk in portfolios.  While the ESG community is advocating the integration of management and carbon or water intensity metrics in investment decisions, the financial community (i.e. the portfolio managers) argue that […]

The Business Water Risk Elephant: Metrics, Investment Decisions and Policy Design

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The fable of the blind men touching and correctly describing different parts of the elephant, but not seeing the whole, has been applied to illustrate many truths and fallacies.  It is particularly apt in fields where there is a deficit or inaccessibility of information and need for communication to integrate the impact of partial viewpoints on policy, […]

Water Risk and Stock Performance: Can Market Signals Drive Corporate Behavior in Water-Rich Basins?

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Good corporate environmental practices have marketing value. Such practices and services can captivate and motivate some consumers. However, real data from capital markets – the flow of money and investment within and to corporations for investments and growth – now indicate that environmental performance can also directly and importantly affect overall corporate risk, financial markets […]

Water Risk Impacts Stock Volatility of Miners: Another waterVaR-Based Market Signal

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In 2013, Moody’s indicated that water scarcity could increase rating pressure on global mining companies, particularly if the accompanying operational and political risk is poorly managed.  There was a big ‘if’ associated with the warning, related to assumptions of regulatory pressure may increase project times and result in procurement of more complex water management systems. […]