Norway’s sovereign wealth fund has urged companies to be transparent on lobbying surrounding water management and risks.

Companies should also promote best practice of water usage and consider putting in place a mechanism that allows third parties to consult with them directly on matters of water management, according to a revised paper released by Norges Bank Investment Management (NBIM).

The manager for Norway’s Government Pension Fund Global, long active in the area of water management and a supporter of charity CDP on the matter, also urged companies to engage directly with local communities about water reclamation.

It argued that companies seeking to tackle the challenges associated with water shortages could gain a strategic advantage.

NBIM’s policy document adds: “We expect companies to address sustainable water management in a manner meaningful to their business models and wish to support them in their efforts to manage the risks and pursue the opportunities.”

It said all incentive structures should be designed in such a way as to integrate sustainability concerns into the running of businesses to best support its long-term profitability.

The manager also called for the introduction of a shadow price on water to help companies monitor the financial risks associated with shortages, as well as systems to promote third-party expert advice on water management.

Echoing recent calls by asset owners over company transparency on climate change lobbying, NBIM said companies should have policies on engaging with governments and regulators, and be “transparent about associated spending and activities”.

Investors worth $2.6trn (€2.3trn) recently called on food companies to better assess the water risks associated with its own production and supply chains.

NBIM also recently urged companies to pay greater attention to matters of energy efficiency, including the disclosure of renewable energy consumption quotas.