Integrating Water Stress into Corporate Bond Credit Analysis: Benchmarking Companies in Three Sectors

Integrating Water Stress into Corporate Bond Credit Analysis
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The “Integrating Water Stress into Corporate Bond Credit Analysis: Benchmarking Companies in Three Sectors” report was published alongside the lauch of the GIZ/NCD/VfU Corporate Bonds Credit Risk Tool enables users to integrate financial risk exposure to water scarcity into standard financial models used to assess the credit strengths of corporates across water-intensive sectors including power utilities, beverages and mining.

The tool addresses an information gap in traditional financial analysis. It enables analysts to identify companies that depend heavily on access to water in locations that are exposed to water stress and to quantify the potential impact of water scarcity on the company’s creditworthiness. 

Seven financial institutions from Europe and the Americas – UBS, Robeco, Calvert Investments, Pax World, J Safra Sarasin, Banorte and Bancolombia – took part in the tool’s development through a partnership between the Natural Capital Declaration (NCD), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the German Association for Environment and Sustainability in Financial Institutions (VfU).

The report contains key findings from the application of the new Corporate Bonds Credit Risk Tool. To download a copy of the report then please see the attached files below or alternatively to download a copy of the open source Corporate Bonds Credit Risk Tool click here.