Water Risks

An Investor’s Guide to Navigating Sustainable Water Management

21 May 2025
1 min read
Water Risks: An Investor’s Guide to Navigating Sustainable Water Management


 

Sara Rosner| Director—Responsible Investing Research

What You Need to Know

Water security represents a critical challenge for the world: how to address too much, too little and too-polluted water. In this paper, we advocate a new approach to managing water risks, aimed at securing better outcomes for communities, companies and investors.

40%
estimated global shortfall in freshwater supply by 2030
US$225 billion
of listed equity value at risk
At least US$10 billion
total invested in First Quantum Minerals' Panama copper mine before it was forced to close

Executive Summary

Water security is a growing risk for companies, forcing investors to recognize and address their exposures. Failure to manage water risks can inflict material damage on business and investment outcomes, while companies that are strategically focused on the issue could enjoy tangible competitive advantages.

Investors seeking to manage material water risks have so far relied largely on disclosure requirements to influence corporate behavior. But a data-disclosure approach—though valuable—has notable limitations.

To overcome this problem, we propose stakeholder management, an approach that focuses on engaging local stakeholders to address water risks. By combining the disclosure regime with better awareness of local needs, we believe companies can make their water stewardship more effective.

Our analysis of companies in three water risk—prone industries—metals & mining, beverages and semiconductor manufacturing—led us to develop a versatile, five-part framework for investors. This framework is designed to both assess and improve companies’ stakeholder management practices.

We believe our approach provides an opportunity for investors to engage1 with companies and help guide them through the complexities of water security toward more sustainable and value-enhancing outcomes.

1 AllianceBernstein (AB) engages issuers where it believes the engagement is in the best financial interest of its clients.

The views expressed herein do not constitute research, investment advice or trade recommendations, and do not necessarily represent the views of all AB portfolio-management teams, and are subject to change over time.


About the Authors

Sara Rosner is a Senior Vice President and AB’s Director of Responsible Investing Research. She leads the Responsibility team’s work with AB’s investment teams and clients on identifying, researching and engaging with material environmental and social issues that arise in the investment process. Rosner also leads AB’s collaboration with the Columbia Climate School, which focuses on enhancing investors’ ability to integrate climate change considerations into their decision-making and investment processes. She has developed and is implementing AB’s approach to managing material risks and opportunities stemming from the global transition to a lower carbon economy and has managed firmwide initiatives on climate scenario analysis, carbon offsets, and ESG education and training. Prior to joining the firm in 2018, Rosner performed research for the Columbia Center on Sustainable Investment, where she worked on projects related to the United Nations Sustainable Development Goals and renewable energy alternatives in the extractive industry. She spent most of her early career as a journalist covering energy and infrastructure finance in the Americas for Euromoney Institutional Investor. Rosner holds a BS (magna cum laude) in international studies from Pepperdine University and an MS in sustainability management from Columbia University. She is a global member of 100 Women in Finance and a member of Women Investing in a Sustainable Economy (WISE). Rosner was named one of Crain’s New York Business Notable Leaders in Sustainability 2023. Location: New York

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