Climate change: Water risks highest in Asia, says Moody’s report




risks tied to the existing supply and quality issues, as well as risks amplified by climate change, pose credit challenges across multiple sectors in Asia, particularly in parts of South and Southeast Asia where water scarcity or mismanagement is already prevalent, said a report released on Wednesday.


According to the report by Moody’s Investors Service, risk factors include the availability and cleanliness of water, the adequacy of water transport and treatment infrastructure, the impact of economic activity on supply and pollution, and the effect of regulations.





and environmental impact of economic activity are one of the parameters on which (Environmental, Social and Governance) ratings are done for companies and funding which could be in the form of equity or debt through various instruments.


In a separate development, announced a new initiative — Sustainable Fitch — that brings out existing capabilities together in one place.


Fitch said it would add over the coming months the first global Ratings solution for all asset classes at an entity and instrument level. “It is designed and built on fundamentals entirely and exclusively to help the ESG focused financial community make better-informed decisions,” it said.


The Moody’s report said risks are more pronounced for water-intensive sectors like mining, agriculture and power. “will amplify the challenges and make a more pertinent credit risk, as well as heighten geopolitical risks and trade tensions,” it said.


According to Nishad Majmudar, a Moody’s assistant vice-president and analyst, Asia is generally more vulnerable to water risks than other regions. Across sectors, issuers are facing water management issues such as inadequate access to clean or purified water supply, and reputational and regulatory risks related to the downstream effect of water use, including supply, pollution and sanitation.


The mismanagement of water resources has direct implications on Asia’s economic activity, with negative effects across sectors.


Water-intensive sectors such as mining, agriculture, textiles, semiconductors and hydroelectric and thermal power depend on proper water management for their productivity. For sovereigns, water stress and poor sanitation can weaken their growth outlook, as well as add to fiscal costs and social tensions.


Water management risks also affect financial institutions indirectly, since the risks affect the borrowers’ creditworthiness. Over time, these risks may bring more impaired assets, increased insurance claims related to issuers’ water supply constraints, and tighter regulations in water-scarce regions.


The link between non-climate-related water risks and the effects of will become clearer over time as changing rainfall patterns and drought amplify water scarcity and infrastructure deficiencies.

mail Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link

news editor logo
NEWS EDITOR
Breaking News Exchange is mainly to inform the public about events that are around them and may affect them. Often news is for entertainment purposes too; to provide a distraction of information about other places people are unable to get to or have little influence over. News can make people feel connected too.

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

568FansLike
604FollowersFollow
146SubscribersSubscribe
- Advertisement -

Latest Articles