Hundreds of financial institutions controlling trillions are acting on water transparency and accountability
CDP Worldwide
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Non-governmental organization (NGO)
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#SDGAction50355
Description
Finance has been identified as one of the key pillars of the UN Global Acceleration Framework for SDG 6. Achieving a water secure, net zero economy will require a complete transformation of our global economy. Triggering such a transformation is a game-changer.
Global financial institutions (FIs) can offer unique, systemic incentives for change by ensuring their investment, insurance, lending, rating and underwriting practices drive these water users to use water wisely, to not pollute water, and to promote its reuse. Banks, shareholders and the FIs that own or lend to them currently enable companies to undertake economic activities, which in many cases are profoundly detrimental to the environment. By asking Fis to be transparent about the water-related risks and impacts that they are exposed to through their financing activities, we seek to reduce the flow of capital to water destructive activities and businesses and increase flow to those that value water appropriately.
Members of the Network of Central Banks and Supervisors for Greening and Financial Systems (NGFS), and the European Central Bank (ECB) have all acknowledged the need for financial institutions to disclose water-related data however they stop short in recommending exactly what should be reported. The outcome and lessons learned from this work will contribute to dialogues underway between CDP and these important institutions to inform regulatory development.
Over the last two years CDP developed an initial set of water security indicators that were informed by a technical working group of industry participants; these indicators have since been incorporated into CDP’s questionnaire for the financial sector. From this, we have global evidence from 275 FIs on how they assess water risk and opportunities, define water strategies and engage with companies. In 2023, an invitation to disclose was sent to over 1,200 financial institutions – watch this space!
Our data show that hundreds of financial institutions controlling trillions are acting on water transparency and accountability.
The evidence that CDP generates from this data is channelled to FIs, public facing resources, and governments to increase their understanding of what is needed to align finance with a water secure world. With hundreds of FIs setting water-related actions, and leading countries updating national Sustainable Development Management plans, the opportunity for greater ambition abounds.
Already, CDP is close to publishing a public interface to explore the actions that financial institutions are taking to reduce their water impact and become stewards of water resources around the world. This interface is soon to be published on the CDP website to highlight action already being taken and to promote further, more ambitious commitments and actions from financial institutions.
By focusing on financial institutions, this intervention ensures a key accountability lever in the global water sector is activated and empowered to act in line with global ambitions regarding water security. To stem the water security crisis, businesses, which wield control or influence over 70% of the world’s freshwater reserves, must change their approach to how they use and impact upon this resource, in essence, learning to operate differently. Many of these companies are transnational and as such, their growth plans and strategies are beyond the influence of any one national government. So, while national governments can exert control over how a particular factory within its jurisdiction engages with water, it cannot influence the way in which the company that owns 5,000 other factories around the world chooses to respond. It would take a concerted and highly coordinated effort by multiple governments to bring just one firm into line with international water goals. FIs, on the other hand, can and do exert this type of influence, giving them unparalleled potential to shift companies toward a more sustainable future. They also have the potential to significantly influence the course the corporate sector takes on exposure and vulnerability to water risks, and water stewardship.
Through this initiative, we expect to make governments, regulators and FIs aware on the actions that are underway and understand what more is needed to align finance with a water secure world.
https://www.youtube.com/watch?v=BaXzsA-dfrs
https://guidance.cdp.net/en/guidance?cid=46&ctype=theme&idtype=ThemeID&… (scroll down to FW-FS Forest and Water Security)
www.cdp.net/en/water/financial-institutions-commitments
SDGS & Targets
Goal 6
Ensure availability and sustainable management of water and sanitation for all
6.1
By 2030, achieve universal and equitable access to safe and affordable drinking water for all
6.1.1
Proportion of population using safely managed drinking water services
6.2
By 2030, achieve access to adequate and equitable sanitation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations
6.2.1
Proportion of population using (a) safely managed sanitation services and (b) a hand-washing facility with soap and water
6.3
By 2030, improve water quality by reducing pollution, eliminating dumping and minimizing release of hazardous chemicals and materials, halving the proportion of untreated wastewater and substantially increasing recycling and safe reuse globally
6.3.1
Proportion of domestic and industrial wastewater flows safely treated
6.3.2
Proportion of bodies of water with good ambient water quality
6.4
6.4.1
Change in water-use efficiency over time
6.4.2
Level of water stress: freshwater withdrawal as a proportion of available freshwater resources
6.5
By 2030, implement integrated water resources management at all levels, including through transboundary cooperation as appropriate
6.5.1
Degree of integrated water resources management
6.5.2
Proportion of transboundary basin area with an operational arrangement for water cooperation
6.6
6.6.1
Change in the extent of water-related ecosystems over time
6.a
6.a.1
Amount of water- and sanitation-related official development assistance that is part of a government-coordinated spending plan
6.b
Support and strengthen the participation of local communities in improving water and sanitation management
6.b.1
Proportion of local administrative units with established and operational policies and procedures for participation of local communities in water and sanitation management
Goal 8
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
8.1
8.1.1
Annual growth rate of real GDP per capita
8.2
Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors
8.2.1
Annual growth rate of real GDP per employed person
8.3
Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services
8.3.1
Proportion of informal employment in total employment, by sector and sex
8.4
Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-Year Framework of Programmes on Sustainable Consumption and Production, with developed countries taking the lead
8.4.1
Material footprint, material footprint per capita, and material footprint per GDP
8.4.2
Domestic material consumption, domestic material consumption per capita, and domestic material consumption per GDP
8.5
8.5.1
Average hourly earnings of female and male employees, by occupation, age and persons with disabilities
8.5.2
Unemployment rate, by sex, age and persons with disabilities
8.6
8.6.1
Proportion of youth (aged 15-24 years) not in education, employment or training
8.7
Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms
8.7.1
Proportion and number of children aged 5‑17 years engaged in child labour, by sex and age
8.8
Protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment
8.8.1
Fatal and non-fatal occupational injuries per 100,000 workers, by sex and migrant status
8.8.2
Level of national compliance with labour rights (freedom of association and collective bargaining) based on International Labour Organization (ILO) textual sources and national legislation, by sex and migrant status
8.9
By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products
8.9.1
Tourism direct GDP as a proportion of total GDP and in growth rate
8.10
Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all
8.10.1
(a) Number of commercial bank branches per 100,000 adults and (b) number of automated teller machines (ATMs) per 100,000 adults
8.10.2
Proportion of adults (15 years and older) with an account at a bank or other financial institution or with a mobile-money-service provider
8.a
8.a.1
Aid for Trade commitments and disbursements
8.b
By 2020, develop and operationalize a global strategy for youth employment and implement the Global Jobs Pact of the International Labour Organization
8.b.1
Existence of a developed and operationalized national strategy for youth employment, as a distinct strategy or as part of a national employment strategy
Goal 9
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
9.1
9.1.1
Proportion of the rural population who live within 2 km of an all-season road
9.1.2
Passenger and freight volumes, by mode of transport
9.2
Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries
9.2.1
Manufacturing value added as a proportion of GDP and per capita
9.2.2
Manufacturing employment as a proportion of total employment
9.3
9.3.1
Proportion of small-scale industries in total industry value added
9.3.2
Proportion of small-scale industries with a loan or line of credit
9.4
By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities
9.4.1
CO2 emission per unit of value added
9.5
9.5.1
Research and development expenditure as a proportion of GDP
9.5.2
Researchers (in full-time equivalent) per million inhabitants
9.a
9.a.1
Total official international support (official development assistance plus other official flows) to infrastructure
9.b
9.b.1
Proportion of medium and high-tech industry value added in total value added
9.c
Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries by 2020
9.c.1
Proportion of population covered by a mobile network, by technology
Goal 12
Ensure sustainable consumption and production patterns
12.1
Implement the 10-Year Framework of Programmes on Sustainable Consumption and Production Patterns, all countries taking action, with developed countries taking the lead, taking into account the development and capabilities of developing countries
12.1.1
Number of countries developing, adopting or implementing policy instruments aimed at supporting the shift to sustainable consumption and production
12.2
By 2030, achieve the sustainable management and efficient use of natural resources
12.2.1
Material footprint, material footprint per capita, and material footprint per GDP
12.2.2
Domestic material consumption, domestic material consumption per capita, and domestic material consumption per GDP
12.3
By 2030, halve per capita global food waste at the retail and consumer levels and reduce food losses along production and supply chains, including post-harvest losses
12.3.1
(a) Food loss index and (b) food waste index
12.4
By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment
12.4.1
12.4.2
(a) Hazardous waste generated per capita; and (b) proportion of hazardous waste treated, by type of treatment
12.5
By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse
12.5.1
National recycling rate, tons of material recycled
12.6
Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle
12.6.1
12.7
Promote public procurement practices that are sustainable, in accordance with national policies and priorities
12.7.1
Number of countries implementing sustainable public procurement policies and action plans
12.8
By 2030, ensure that people everywhere have the relevant information and awareness for sustainable development and lifestyles in harmony with nature
12.8.1
Extent to which (i) global citizenship education and (ii) education for sustainable development are mainstreamed in (a) national education policies; (b) curricula; (c) teacher education; and (d) student assessment
12.a
Support developing countries to strengthen their scientific and technological capacity to move towards more sustainable patterns of consumption and production
12.a.1
Installed renewable energy-generating capacity in developing and developed countries (in watts per capita)
12.b
Develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products
12.b.1
Implementation of standard accounting tools to monitor the economic and environmental aspects of tourism sustainability
12.c
Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities
12.c.1
Amount of fossil-fuel subsidies (production and consumption) per unit of GDP
Goal 17
Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development
17.1
Strengthen domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection
17.1.1
17.1.2
17.2
Developed countries to implement fully their official development assistance commitments, including the commitment by many developed countries to achieve the target of 0.7 per cent of ODA/GNI to developing countries and 0.15 to 0.20 per cent of ODA/GNI to least developed countries; ODA providers are encouraged to consider setting a target to provide at least 0.20 per cent of ODA/GNI to least developed countries
17.2.1
17.3
Mobilize additional financial resources for developing countries from multiple sources
17.3.1
Additional financial resources mobilized for developing countries from multiple sources
17.3.2
17.4
Assist developing countries in attaining long-term debt sustainability through coordinated policies aimed at fostering debt financing, debt relief and debt restructuring, as appropriate, and address the external debt of highly indebted poor countries to reduce debt distress
17.4.1
17.5
Adopt and implement investment promotion regimes for least developed countries
17.5.1
Number of countries that adopt and implement investment promotion regimes for developing countries, including the least developed countries
17.6
Enhance North-South, South-South and triangular regional and international cooperation on and access to science, technology and innovation and enhance knowledge sharing on mutually agreed terms, including through improved coordination among existing mechanisms, in particular at the United Nations level, and through a global technology facilitation mechanism
17.6.1
Fixed broadband subscriptions per 100 inhabitants, by speed
17.7
Promote the development, transfer, dissemination and diffusion of environmentally sound technologies to developing countries on favourable terms, including on concessional and preferential terms, as mutually agreed
17.7.1
Total amount of funding for developing countries to promote the development, transfer, dissemination and diffusion of environmentally sound technologies
17.8
Fully operationalize the technology bank and science, technology and innovation capacity-building mechanism for least developed countries by 2017 and enhance the use of enabling technology, in particular information and communications technology
17.8.1
17.9
Enhance international support for implementing effective and targeted capacity-building in developing countries to support national plans to implement all the Sustainable Development Goals, including through North-South, South-South and triangular cooperation
17.9.1
Dollar value of financial and technical assistance (including through North-South, South‑South and triangular cooperation) committed to developing countries
17.10
Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization, including through the conclusion of negotiations under its Doha Development Agenda
17.10.1
17.11
Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries’ share of global exports by 2020
17.11.1
Developing countries’ and least developed countries’ share of global exports
17.12
Realize timely implementation of duty-free and quota-free market access on a lasting basis for all least developed countries, consistent with World Trade Organization decisions, including by ensuring that preferential rules of origin applicable to imports from least developed countries are transparent and simple, and contribute to facilitating market access
17.12.1
Weighted average tariffs faced by developing countries, least developed countries and small island developing States
17.13
Enhance global macroeconomic stability, including through policy coordination and policy coherence
17.13.1
17.14
Enhance policy coherence for sustainable development
17.14.1
17.15
Respect each country’s policy space and leadership to establish and implement policies for poverty eradication and sustainable development
17.15.1
17.16
Enhance the Global Partnership for Sustainable Development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the Sustainable Development Goals in all countries, in particular developing countries
17.16.1
Number of countries reporting progress in multi-stakeholder development effectiveness monitoring frameworks that support the achievement of the Sustainable Development Goals
17.17
Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships
17.17.1
Amount in United States dollars committed to public-private partnerships for infrastructure
17.18
By 2020, enhance capacity-building support to developing countries, including for least developed countries and small island developing States, to increase significantly the availability of high-quality, timely and reliable data disaggregated by income, gender, age, race, ethnicity, migratory status, disability, geographic location and other characteristics relevant in national contexts
17.18.1
Statistical capacity indicators
17.18.2
17.18.3
Number of countries with a national statistical plan that is fully funded and under implementation, by source of funding
17.19
By 2030, build on existing initiatives to develop measurements of progress on sustainable development that complement gross domestic product, and support statistical capacity-building in developing countries
17.19.1
17.19.2
Proportion of countries that (a) have conducted at least one population and housing census in the last 10 years; and (b) have achieved 100 per cent birth registration and 80 per cent death registration
SDG 14 targets covered
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Deliverables & Timeline
Resources mobilized
Partnership Progress
Feedback
Action Network
Share
Timeline
Entity
Region
- Global
Other beneficiaries
CDP´s programme on increasing transparency of the financial sector on water started in 2021 and has already produced global evidence on whether and how financial institutions (FIs) disclosure risk, opportunities and impacts on water security. This evidence is already being used in the development of a public interface to present FI water commitments and will be used in future to support the FIs in their transition to a water secure world, and financial regulators on the identification of key metrics for water disclosures.
More information
Countries
Contact Information
Cate, Global Director, Water Security