Risk gaps are widening - if you can't see the new climate water risk landscape how can you see opportunities ahead?
Today, all types of water risks are intensifying in frequency and magnitude – we are battling with more rain, bigger floods, longer droughts, stronger typhoons & rampant wildfires – yet, the worst is still to come as many of our planet’s climate systems relating to the cryosphere are reaching their tipping points due to persistent global heating. Indeed, accelerated ice melt or “ice risks” could bring forward devastating impacts from fast rising seas & rivers running dry.
To make well-informed business & investment decisions, we need to understand as well as stay ahead of fast-evolving acute & chronic physical climate and water risks. Risk assessments are necessary to understand exposure as well as to unlock innovations. Stress testing can help clarify the range of impacts especially when risks are accelerating, allowing these risks to be valued and benchmarked effectively. All these are increasingly important as the disclosure of physical climate risks will soon become mandatory with new ISSB standards.
Know & value these risks now to spread risks & see opportunities. Start by leveraging CWR’s decade+ of trend-setting experience in unpacking these complex & interlinked threats…
Get on top of the escalating climate & water risks that your portfolios/loan books/assets are exposed to. CWR’s work has been instrumental in helping investment funds, banks, and corporates understand their risk exposure. CWR also provides research on key climate risks and conducts water risk assessments as well as curates risk mitigation strategies for various stakeholders. Much of our work is commissioned and non-disclosable but an idea of our work is set out below. Contact us
Investment water risk assessment for large sovereign wealth fund.
Coastal threat assessment for LINK-REIT published in its Annual Report – see our interview with the Head of Sustainability & Risk Governance on being an early mover, key findings & benefits. This assessment was also featured as a case study in “APREA ESG Guidebook for Real Assets in Asia Pacific”.
Sectoral water risk assessments for HK listed companies, MNCs & long-only funds.
Commissioned reports for financial institutions; some have led to sector sell-downs & nominations for industry awards.
Central banks and disclosure standards are pushing for stress testing of physical climate risks because only once impact are understood can they be managed to ensure financial resilience. Yet, stress testing for physical climate risks continue to lag that of transition risks. Given that slower moving chronic risks, such as sea level rise and rivers running dry, are now also fast-moving, it is not just important to stress test but to use the right tools per risk as well as the right risk levels. CWR engages with various parties including C-suites and alongside institutional investors on how to stress test right … Join us
CWR & The Asia Investor Group on Climate Change (AIGCC) released an open letter urging the regions’ banks to overhaul their climate stress tests for escalating coastal threats. They say banks’ stress tests should be enhanced to keep up with the latest science. At that time, AIGCC represented investors with US$32trn AUM.
“Current stress testing approaches often underestimate sea level rise risks because of a time frame that is too short, and the level of sea level rise used is too low. We hope that enhancing these assessments will lead to improved planning and greater resilience.”
Eric Nietsch, Head of Sustainable Investing – Asia, Manulife Investment Management and Chair of AIGCC’s Physical Climate Risks and Resilience Working Group
3 step guide to stress testing right – see CWR report “Futureproofing APAC Banks & Savings: Stress test right today, avoid hard landing from rising seas” – the report also explains “triple whammy” concentrated risks for over US$7.9trn of loan books of 17 Asian banks.
CWR has been working on building consensus toward water risk valuation for over a decade. It has been a privilege to be part of this global conversation, and we are honoured to have helped steer this from our base in Hong Kong. Valuation methodologies we curated are now found in textbooks and our thought leadership in this space has also led us driving global disclosure frameworks. Our valuation journey for micro risks can be found below but for macro risks, please see Waternomics: Rethink Development. If you’re not sure where to start, contact us!
CWR was invited to be a part of China’s Environmental Risk Assessment (ERA) Task Force chaired by Dr. Ma Jun who was then the Monetary Policy Commission of the People’s Bank of China.
First-ever book on environmental risk analysis for FIs authored by Dr. Ma – CWR co-authored the water risk chapter.
CWR created the CWR APACCT 20 Index which benchmarked coastal threats across 20 major cities across APAC with the help of 100+ finance professionals. Watch CWR on Bloomberg on the findings…
CWR provided technical guidance on water risks for the TCFD Knowledge Hub – watch our water risk tutorial.
Palgrave Macmillan “Water Risk & it’s Impact on the Financial Markets & Society – New Developments in Risk Assessment & Management” textbook featured two chapters (freshwater & coastal threats) from CWR.
Palgrave Macmillan “Water Risk Modeling” textbook features a chapter on the CWR APACCT 20 Index. A German edition was released in 2024.
For more articles related to Water Risk Valuation – click here
Only with better disclosure can better decisions be made, so CWR has been driving disclosure standards by sitting on the CDP Water Advisory Committee (now dissolved); the CDSB (Climate Disclosure Standards Board – now IFRS) Water Technical Working Group; and the Practitioners Advisory Group on the Freshwater SBTN (Science Based Targets Network). CWR is also a member of CDP’s Disclosure Framework Advisory Group which helps shape CDP’s future disclosure framework. Need help getting on to of the latest disclosure trends, contact us!
CDP “Shaping High-Quality Mandatory Disclosure” – taking stock & emerging best practice.” CWR on the Steering Committee.
SBTN “Technical Guidance on Freshwater – Measure, set & Disclose”. CWR was a member of the Practitioners Advisory Group.
CDSB Framework “Application guidance for water-related disclosures”. Recommended reading includes various CWR’s reports on water risk valuation & benchmarking.
To see how far China has come in environmental disclosure, check out our joint report with SynTao, “China Prioritises Environment: More Disclosure Needed To Match Rising Risks”.
CWR has deep access to the financial sector and institutional funds with over US$7trn AUM. Banks, asset managers, asset owners, insurers, sovereign wealth funds, rating agencies, regulators and so on engage CWR on the financial materiality of various water risks and how they can be valued to aid better decision making. They also use CWR to access intel through one-on-ones, roadshows or conferences.
CWR also supports knowledge sharing by providing tailored research for financial institutions and their clients as well as for investors directly for their own decision making. We will curate the right team by tapping our extensive network of global experts & partners where appropriate so the right skillset and knowledge can be used for each project. Talk to us!
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