Swedish national pension fund AP7 has joined large pension funds from the US and elsewhere in founding a new sustainability initiative to raise awareness about the harm companies can do to water supplies around the world.

Sustainability organisation Ceres said the project, called the Valuing Water Finance Task Force, aimed to get businesses to take action on water-related financial risks, highlighting industries and practices linked to the most severe and systemic harm being done.

Ceres said it had linked up with the Dutch government, which launched the Valuing Water Initiative in January last year.

Flora Gaber, project manager, sustainable investments at AP7, told IPE: “A global freshwater crisis is one of the most serious threats to the world’s economy.

“Although water is one of the most important issues, it is not prioritised by companies, which was shown by our thematic research last year,” she added.

Ceres said the effort is an attempt to “catalyse influential capital market leaders to address the financial risks of the water crisis, and call on companies to take action”.

Besides AP7, other founding members of the scheme include Swedish banking group SEB, the Government Employees Pension Fund of South Africa (GEPF), the New York State Common Retirement Fund, the California State Teachers Retirement System (CalSTRS), California State Controller Betty Yee, New York State Comptroller Thomas DiNapoli and New York City Comptroller Scott Stringer.

“Ultimately, we hope for improved reporting by companies on their water-related risks and what measures they are taking to address them,” Gaber told IPE.

She said AP7 – which runs the default option in Sweden’s premium pension system – hoped to achieve a better common understanding and coordination among investors to address the most pressing water issues.