Helping businesses build climate resilience with the enhanced WWF Water Risk Filter 6.0
However, our climate has already changed; it is already affecting our societies and economies — primarily through water-related challenges.
The headline-grabbing water-related climate events around the world — whether devastating floods in India, or world-record droughts in the US — ought to serve as a “canary in a coal mine” to spur faster action on water to tackle the reality of a changing climate.
Businesses in Africa and South Asia are among the most vulnerable to water risks, which can have significant negative socio-economic and financial impacts. That’s why CDC, the UK’s development finance institution, partnered with WWF to support the enhancement of its leading online tool for companies and investors: the WWF Water Risk Filter.
Launched following COP26, the upgraded 6.0 version of the tool aims to drive greater corporate awareness and action to address water risk in the face of climate change to enhance resilience.
Beyond improvements to the tool’s interface, underlying datasets and visual outputs, the biggest enhancement is the comprehensive integration of climate and socio-economic pathway-based scenarios.
The Water Risk Filter scenarios are based on the combination of the most relevant climate scenarios (IPCC Representative Concentration Pathways-RCP) and socio-economic scenarios (IIASA Shared Socioeconomic Pathways-SSP), enabling companies and investors to explore how water risks across their value chains and investments may evolve by 2030 and 2050 under different possible futures.
By performing scenario risk analysis using the Water Risk Filter 6.0, companies and investors will be able to make better informed decisions on their corporate strategies and investments for a sustainable future — as recommended by the Task Force on Climate-related Financial Disclosures (TCFD).
Analysis using the WWF Water Risk Filter scenarios found that almost half of global GDP will potentially come from high water risk areas by 2050. For some of the world’s most vulnerable countries, these risks are already materializing and the impacts of too little or too much water are devastating to both societies and economies.
The countries where CDC invests, in Africa and South Asia, are among the world’s most at risk to water-related challenges driven by climate change. As part of this partnership, the WWF Water Risk Filter scenarios will be applied to CDC’s portfolio to assess climate-water risks and identify opportunities for further collaboration to increase resilience.
Designed to be used as a corporate and portfolio-level screening tool, the WWF Water Risk Filter 6.0 enables companies and investors to prioritize action on what and where it matters the most to address their water risks both now and in the future. Addressing these challenges will require diverse and resilience-building solutions for adaptation.
As highlighted in Waterways to Resilience Report published by WWF and AB InBev during COP26, Nature-based Solutions (NbS) — initiatives that use ecosystems to address societal challenges, delivering benefits to people and biodiversity alike — can play a significant role in building climate and water resilience. Whilst analysis with the Water Risk Filter identified that water risks are projected to increase due to climate change over the next decades, the report provided evidence for the effectiveness and potential for NbS to help address some of the most critical water challenges facing the communities, governments and businesses of Africa.
The climate crisis is a water crisis at its core. Water has to be at the heart of all global efforts to mitigate and adapt to the impacts of the changing climate. With the enhanced Water Risk Filter 6.0, companies and investors have the tool to step-up action for building more climate and water resilient societies, economies and ecosystems.