The finance sector can play a crucial role pushing for improved water management, not least through what economic activities they choose to invest in.

The multi-stakeholder platform Water and Finance works to raise the awareness of water risks in investments, and ensure that the financial sector has the available tools to analyze and calculate water risks as well as opportunities.

In 2021, the group developed a guide to how investors can assess water impacts and risks of portfolio investments, and identify focus areas for improvement. The guidance should be seen as a complement to other sustainability work that financial institutions are undertaking in combating climate change, biodiversity loss and human rights violations. It can be employed in relation to the water-related technical screening criteria that will be developed under European Union’s new Taxonomy, which outlines the definition of sustainable finance.

Active partners in the cluster group include the Carbon Disclosure Project (CDP) and Swesif (Sweden’s Sustainable Investment Forum).