Peter Adriaens: Water risk = Business financial risk = Investor risk

1. Business Water Risk and the Capital Markets:
How do we Engage the Investor Community?
Peter Adriaens, PhD PE BCEEM
Professor, Engineering,
Finance & Entrepreneurship
CEO, Equarius Risk Analytics
Ann Arbor, MI – New York, NY
https://www.linkedin.com/in/peteradriaens

2. • Cotton prices reached an all time
high due to massive output.
• Rising prices prompted Gap to cut its
annual profit forecast by 22%,
prompting a $4 decline in its stock
value.
• Company raised prices by 10 to 15%,
resulting in a decrease in sales.
• Decrease in sales and growth rates,
due to water risk exposure, resulted
in downgrading of corporate bond
rating
Water Risk = Business Financial Risk
= Investor Risk

3. Water Stress Results in Opportunity
Cost and Risk for Stranded Assets
USD 21 billion in
electricity sales
at risk
USD 221 billion in
gold reserves
at risk
USD 17 billion in
steel sales at risk
Electric Utilities Gold Steel
Water Risk  Revenue/productivity Risk  Equity
Volatility and Debt Rating Risk

4. Water Impact is Reflected in Seasonal
Volatility of the Stock/Debt
Water risk
accounts for
up to 25% of
seasonal stock
volatility*
(*measured as
value-at-risk,
VaR)

5. Benchmarking Water Risk for
Capital Markets
Integration of capital market, corporate finance and environmental data:
Equity Risk Analytics and Portfolio Design Platform
DaaS: Data-as-a-service; SaaS: Software- as-a-service