Water and wastewater management is one of the more prevalent issues addressed in SASB Standards, appearing in 25 of 77 industries. However, in many cases, the issue can have diversified impacts on operating risk and financial performance from one industry to the next, and SASB considers these differences in setting standards.
Water risk impacts are physical in nature, such as those driven by limited natural water availability, competition for water resources, and watershed pollution. SASB considers two high-level categories of physical water risk: access to water and water quality. Additionally, SASB considers how the regulatory environment can affect physical water risks and a company’s ability to manage those risks. In establishing performance metrics, SASB aims to enable effective water management by improving understanding of “net water risk,” where net risk is a measure of a company’s total exposure to water risk impacts offset by the actions it takes to mitigate those risks.