Sustainable Water Fund Attracts $100 Million from Temasek, Microsoft

A clean-water venture capital fund has attracted $100 million in commitments from Singapore sovereign wealth fund Temasek, as the cornerstone investor, as well as strategic investors Microsoft, water technology firm SKion Water, and water provider Ecolab.

The venture fund from clean technology investor Emerald Technology Ventures will invest in early- to expansion-stage businesses that address water challenges around the world, the firm said last week. It will finance technologies that conserve water resources, support sustainable cities, improve resource efficiency, adapt to climate change, and reduce health risks.

“With the closing of this fund, we look forward to continuing to drive the water sector forward by utilizing our proven partnership model for the most innovative water companies,” Helge Daebel, partner and head of Emerald’s water activities, said in a statement.

Emerald is expanding in the Asia-Pacific region, where it opened a Singapore office last year when it established a water technology incubator to support local companies. The venture is supported by Enterprise Singapore, a government agency. Emerald has successfully exited several investments in the water sector in the past, according to SKion Water CEO Reinhard Hübner.

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“Helge Daebel as leader of Emerald’s water activities is widely recognized as one of the most knowledgeable persons in the global water investor community,” Hübner said.

Investors are preparing for the impact of water scarcity over the next decade, when demand for freshwater is expected to outpace supply by 40%, according to Ecolab President and Chief Operating Officer (COO) Christophe Beck.

Some global regions are expected to be affected by water issues more than others. According to BlackRock, almost all real estate investment properties in Australia, Hong Kong, Japan, Malaysia, and the Philippines will feel the effects of rising tides and eroding coastal shorelines in the next decade.

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Tags: Climate Change, Emerald Technology Ventures, environmental social and governance investing, ESG, Microsoft, Singapore, sustainable investing, Temasek, water, water scarcity

A group of five global sustainability leaders that set environmental, social, and governance (ESG) standards will work together to develop a common framework for corporate reporting, the firms said Friday.

The lack of consistent sustainability disclosures has made assessing companies confusing and difficult, according to a joint report released Friday from the environmental nonprofit CDP (formerly the Carbon Disclosure Project), the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), the International Integrated Reporting Council (IIRC), and the Sustainability Accounting Standards Board (SASB). Together, the organizations set the majority of ESG reporting in the industry.

“We know that businesses globally are already using a mixture of our frameworks and standards to provide stakeholders with robust, effective information to drive better decisionmaking and capital allocation via their integrated report,” Charles Tilley, CEO of the IIRC, said in a statement.

The firms are also working with the International Organization of Securities Commissions (IOSCO) and the International Financial Reporting Standards (IFRS), the European Commission, and the World Economic Forum’s International Business Council.

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More investors than ever before are trying to incorporate ESG considerations into their investments, but standards around sustainability disclosures are still in early stages. While traditional credit rating agencies broadly assess companies based on the likelihood that they will default, it’s far less clear how to judge a company’s ESG performance.

That discrepancy has attracted criticism from regulators in the US and Europe. In February, a top European Union regulator said ESG rating agencies and financial products need better supervision to prevent “greenwashing.” In June, the US Department of Labor (DOL) proposed a rule to chill ESG investments that are not focused solely on returns.