The CDP Water Impact Index is a data-driven tool that evaluates water-related impacts across global value chains. It aims to help investors and finance professionals better understand water-related risks and opportunities in their portfolios. The tool is part of CDP’s broader focus on environmental disclosure and offers insights into how water use and management practices can affect financial and operational outcomes.

The tool aggregates and analyses corporate water-related data submitted through CDP’s disclosure platform. It assesses companies’ water-related risks and identifies areas of exposure to potential financial and reputational impacts due to poor water management or increasing water stress. By incorporating sector-specific data, the index highlights industries where water issues are particularly material, such as agriculture, energy, and manufacturing.

For finance professionals, the Water Impact Index provides valuable insights for ESG integration and risk management. It can be used to evaluate companies’ water stewardship practices, assess the financial implications of water risks, and inform sustainable investment decisions. The tool also supports engagement with companies by identifying key areas for improvement in water use efficiency, governance, and strategy.

The CDP Water Impact Index is particularly relevant for those managing portfolios exposed to high-risk industries or operating in regions with significant water scarcity. By linking water risks to financial performance, the tool enables a deeper understanding of how environmental factors can influence long-term value creation and risk profiles.

In summary, the CDP Water Impact Index is a practical resource for finance professionals seeking to incorporate water-related considerations into investment strategies and decision-making processes. Its robust data and insights help identify material risks, inform stewardship activities, and support sustainable finance goals.