Watered down? Investigating the financial materiality of water-related risks in the
Water-related risks are intrinsically linked to both climate and nature challenges
and can be closely tied to socio-economic challenges, such as poverty, food security,
and domestic and international conflicts. There is increasing evidence that water-related
risks are financially material across actors in the financial system, and further
still, that there may be important implications for financial stability. However,
a review of current practices indicates that these risks are not fully captured by
current approaches to assessing risk.
This working paper explores how the financial sector understands the concept of financial
materiality as a lever for decision making on water-related climate and nature risks.
The paper also looks at how regulatory and supervisory guidance considers water in
the context of climate and nature risks, and finally how sustainable finance tools
and initiatives can support market participants in gaining an improved understanding
of water-related risks.
Available from September 28, 2023
In series:OECD Environment Working Papersview more titles