Original Web Optimized Farmer Walking Toward Combine Harvester
Original Web Optimized Farmer Walking Toward Combine Harvester

Water risk – a challenge for the planet as well as for investors

Climate change, combined with increased energy demand from industrial and domestic uses, has turned water shortage into one of the most pressing issues of our time. As the largest bank in the Nordic region and a responsible global investor, water scarcity and its impact on people and companies is something we must consider. Here’s why.

According to WWF, 1.1 billion people in the world lack access to clean water and by 2025, as much as two-thirds of the world’s population may be facing water shortages. Water is not only crucial for the companies we invest in but for human life to thrive and while we live on a blue planet with water covering 70% of its surface, only 3% of it is fresh. Large cities like Cape Town, Bangalore, Beijing, London, Moscow, and Tokyo are all facing a very real threat of lacking drinking water in a relatively near future. Despite an apparent abundance of water, the Nordic region is not as unaffected as it may appear. In the spring and summer of 2019, Sweden began to experience water shortage, with levels in the large groundwater reservoirs decreasing below the normal levels for the season almost in the entire country.

 

Apart from devastating humanitarian consequences in the form of surging international conflicts, food-scarcity, water-borne diseases spreading it will impact educational and economic opportunities and contribute to an economic slowdown. Most industries depend on energy for production. Hydropower and thermoelectric power contribute to 98 percent of the world’s electricity generation. These two most common forms of power are also the most water-intensive. Manufacturing a single cotton T-shirt can require up to 2,700 liters of water and the agricultural sector is responsible for 70% of all freshwater withdrawal, according to the World Bank.

“With Nordea being a large global investor and a responsible social player, water scarcity and its severe impacts on people and businesses is something we must consider,” says Anders Langworth, Head of Sustainable Finance at Nordea.

In this film, we would like to share with you some of the highlights from our field visits related to water shortage. Join us as we speak to the companies affected by water risk as well as those at the forefront when it comes to tackling the problem.

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Nordea takes a look at the implications of water risk for businesses and investors

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