The Emergence of Water Risk: From Marginal to Systemic

The past two decades have seen a surge in interest in environmental issues, mainly climate change, global warming, and fossil fuels. Yet, another equally important dimension - water scarcity - has thus far remained largely unexamined and has not been given adequate importance in the economic development agendas of many countries.

Combining ESG Risk and Economic Moat

In this report, we look at the potential synergies between Sustainalytics’ ESG Risk Ratings and Morningstar’s Economic Moat Rating. As a part of our research, we constructed a back-testable investment strategy and portfolio by segmenting stocks with low ESG risk and a wide moat. While both metrics worked independently, they performed exceptionally well in combination.