Norwegian government fund assesses 432 companies on water risk

Investor says just 50 firms report on supply chain water risks

The NOK3.1trn (€396bn) Norwegian Government Pension Fund has provided more details on how it is engaging with companies on water-related risks, one of its key strategic focus areas.
The fund said in its first-quarter report that it has looked at companies with high exposure to water-related risk for the first time. The assessment covered 432 investee companies in the mining, electricity and multi-utilities, water, pharmaceutical, food and forestry and paper sectors.
It said 182 companies published strategies for water management in 2010, mainly covering their own operations. “Only 50 companies reported on water-related risks in their supply chains.”
Water management is one of the fund’s six stated focus areas. The others are equal treatment of shareholders, shareholder influence and boardaccountability, efficient markets, children’s rights and climate change.
The fund, lead sponsor of the Carbon Disclosure Project’s water disclosure project, expects its investee companies to have a clear water-management strategy, sustainable water management and a water governance structure.
The report also reveals that the fund voted at 1,504 general meetings in the first quarter – and that its active ownership department had about 75 company dialogues on environmental, social and governance issues.
The fund made an investment return of 2.1% in the quarter, boosted by its oil and gas investments. Its biggest-gaining stock investment US oil major ExxonMobil while crisis-hit Tokyo Electric Power Co. was its weakest performer.