Ripple Effect: Exploring the Impact of Water Risk on Credit

In a recent research report, Moody’s highlighted that the impact of water management risks on credit is poised to increase significantly. This escalation arises from the dual pressures of escalating water demand and the compounding effects of climate change, which particularly intensifies water scarcity in regions already under high water stress. The report identifies eight sectors collectively holding nearly $2 trillion in debt that are particularly susceptible to these risks. These risks extend beyond climate-related concerns and encompass a range of water-related issues such as accessibility, availability, efficiency, pollution, and pricing.

As the repercussions of insufficient water management practices become more pronounced in both financial and societal spheres, comprehending the influence of these risks on corporations, governments, and other entities issuing debt is now of paramount importance.

A panel consisting of Moody’s analysts and climate experts invites participation to delve into the subsequent focal points:

1. Amplification of Water Supply-Demand Imbalances due to Climate Change: The panel will discuss the exacerbating effects of climate change on the existing imbalances between water supply and demand.

2. Translation of Water Management Issues into Credit Risks: The discussion will explore how the challenges associated with water management can be transformed into credit risks for entities that issue debt.

3. Constructing Resilience: Government and Corporate Strategies: Participants will have the opportunity to explore potential measures that governments and companies can adopt to enhance their resilience in the face of these challenges.