Water sustainability of investors: Development and application of an assessment framework

Although corporate social responsibility in general and corporate water stewardship specifically are of increasing concern to businesses, investors are lagging behind in fostering water sustainable investment practices – despite the large impact their investment decisions have on the state and shape of tomorrow's water resources. This paper is the first-ever study to assess whether and how investors include water sustainability criteria in their investment decisions, by scrutinizing their publicly released policies on the topic. We hereto (1) developed an assessment framework using the water footprint concept, (2) applied it to twenty large investors in a case study for the Netherlands, and (3) ranked them accordingly. We found that, by and large, water sustainability is a blind spot to investors, resulting in disclosed policies being neither well-demarcated nor clearly formulated, especially regarding the supply chain of the activities invested in. There is a long way to go before investors can ensure efficient, sustainable and fair water use in their investment policy, but our framework helps investors direct their urgently needed improvement process, to transition toward water sustainable production systems in a circular economy.