ISS ESG, the responsible investment arm of Institutional Shareholder Services has announced the launch of the ISS ESG Water Risk Rating.

Institutional investors can mitigate water risks across their investment portfolio by identifying industries and business activities that depend on or greatly impact water resources, and by actively engaging with company management to improve transparency with regard to water-related strategy and risk management. The ISS ESG Water Risk Rating offers a holistic solution to support a range of investor use cases. This includes helping investors identify and manage freshwater-related risks in portfolios, build freshwater-focused portfolios, funds and indices, through to supporting their water-related stewardship and engagement programmes.

Initial coverage consists of approximately 7,400 companies globally, and is powered by ISS ESG’s corporate rating, norm-based research, SDG Solutions Assessment, as well as data on baseline water stress from the World Resource Institute (WRI) Aqueduct Water Risk Atlas.

To further support investors seeking to improve their portfolio’s water impact, ISS ESG’s Thematic Engagement Solution enables participation in joint outreach and dialogue with a select list of target companies. The Water Thematic Engagement, which aims to encourage companies to improve their transparency around water-related strategy and risk management through the disclosure of key metrics and targets, focuses on laggards in two industries with high water-risk exposure in both their supply chains and direct operations according to ISS ESG’s Water Risk Rating: chemicals, and textiles & apparel.

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