Month: February 2026

A winning start to 2026 

We’re kicking off the new year with some great news: Built In has recognized Northern Trust across multiple 2026 Built In Best lists!

We’re honored to be named among the very best places to work in several of our key hubs:

• Best Large Places to Work – Chicago
• Best Places to Work – Chicago
• Best Large Places to Work – San Francisco
• Best Places to Work – Los Angeles
• Best Large Places to Work – Boston
• Best Places to Work – Boston
• Best Large Places to Work – Los Angeles

These wins reflect the passion, talent, and dedication of every person on our teams who make our offices an incredible place to grow, innovate, and thrive

Originally published on Guiding Stars Health & Nutrition News

by Kitty Broihier

I always find the topic of meal planning to be polarizing. You’re either a fan who finds it valuable or it’s your idea of monotonous drudgery. But I’m here to say there’s more than one way to meal plan. I’m sharing a simple process that relies on one well-planned grocery shopping trip and a handful of cook-once, eat-twice recipes. Follow the map and you’ll be set up for a week’s worth of balanced, Guiding Stars-earning meals.

Originally published on Guiding Stars Health & Nutrition News

by Kitty Broihier

I always find the topic of meal planning to be polarizing. You’re either a fan who finds it valuable or it’s your idea of monotonous drudgery. But I’m here to say there’s more than one way to meal plan. I’m sharing a simple process that relies on one well-planned grocery shopping trip and a handful of cook-once, eat-twice recipes. Follow the map and you’ll be set up for a week’s worth of balanced, Guiding Stars-earning meals.

What You Need to Know

Biodiversity risk is more nuanced and complex than many investors think. For instance, there’s a widespread belief that deforestation poses the biggest nature-related risk for most portfolios. But when we applied our proprietary biodiversity risk-assessment framework for a client, we found that water risk—not deforestation—was the portfolio’s biggest exposure. Our analysis of the MSCI AWCI Index using the same framework shows water risk is elevated for many companies, highlighting just how important it is to assess biodiversity risk accurately.

16%	35%	14%
of the MSCI ACWI is exposed to the highest level of biodiversity risk	the share of MSCI ACWI for which water risk is high or very high	the share of MSCI ACWI for which deforestation risk is high or very high

Authors

Sara Rosner| Director—Responsible Investing Research
David Hutchins, FIA| Portfolio Manager—Multi-Asset Solutions
Henry Smith, CFA| Investment Strategist—Multi-Asset Solutions

The importance of biodiversity as a nature-related risk in investors’ portfolios has become better understood in the past few years. Investors are beginning to appreciate how complex and nuanced biodiversity risk can be. For example, there’s a widespread assumption that deforestation is the biggest biodiversity risk in many portfolios. That’s understandable, given media attention around the topic, and because large-scale deforestation contributes to climate change, which can have a material impact on investments across the globe.

But such assumptions can fall short of reality. We recently analyzed the biodiversity risks in the equity allocations of a large UK pensions provider¹ and found that water stress, not deforestation, was the biggest risk (Display).

This may seem surprising, given that the impacts of water stress tend to be localized and not so obviously global as those of deforestation and its links to climate.

But this particular client is not an outlier. Our analysis of the ENCORE² industry biodiversity-risk database shows that the proportion of the MSCI ACWI Index for which water-related risk is high or very high is 35%—not very different from the client’s 31%. (The index also has a bigger exposure to high or very high deforestation risk—about 14%.) The insight underscores how important it is for investors and investment managers to analyze and identify their nature-related exposures correctly.

To that end, we have developed a proprietary risk-assessment framework that can identify nature-risk exposures across portfolios at the sub-industry level. In turn, this enables analysts to assess and engage with the potentially high-risk companies identified. We believe the framework may help reduce portfolio risk and unlock better returns.

Mapping Portfolio Biodiversity Risks

According to the Taskforce on Nature-related Financial Disclosures, nature-related risks are potential threats to an organization arising from dependency and impact on nature—the organization’s own, and those of society too. Dependency and impact are, respectively, physical and transition risks.

For example, fisheries that rely on water quality to sustain their fish stocks have a high dependency on nature, as they are exposed to the physical risk that water quality might deteriorate. Mining companies and property developers have a high impact on nature; as laws, regulations and trade practices change (transition) to reflect society’s growing awareness of biodiversity risk, they may become exposed to legal, reputational, market and other risks.

Using dependency, impact and related risks as a framework, we draw on the ENCORE database to map biodiversity risk exposure at the GICS³ subindustries level (Display).

The industries that fall in the upper right quadrant have both high dependency and impact and, therefore, the most nature-related risk. Our analysis shows that 15.7% of MSCI ACWI falls into this quadrant. For the equity portfolio in our client case study, the proportion is significantly lower, at nearly 10% (Display).

Understanding how dependency and impact risks are distributed across industries in a portfolio is a vital first step, but it’s also important to dive deeper to understand the risks at the issuer level. The ENCORE database lists risks individually and classifies them according to whether they are dependencies or impacts. Using this information, we can apply the framework to identify specific risks across a portfolio. This was how we discovered the extent to which the case-study portfolio’s biodiversity risks were dominated by water-related exposures (Display).

Most of these exposures fell in the dependencies category, but two of the top five impact exposures were also water-related—area of freshwater use, and emissions of toxic soil and water pollutants. This level of information is potentially helpful in deciding where to focus efforts to mitigate the portfolio’s biodiversity risks.

Having established which industries in a portfolio have the highest nature risk, we can identify individual holdings within those industries that we may wish to target for further research to understand which biodiversity risks are most material for them.

Company Engagements: Consistency and Comparability

For active portfolios managed by AB, this level of research may also lead us to engage⁴ directly with issuers to better understand their exposures and, if appropriate, work with them to help mitigate risks. We decide which issuers to engage with on a case-by-case basis, according to whether engagement is in clients’ best interests. When undertaking an engagement for clients whose strategy is implemented mostly with third-party funds, we partner with appointed managers to ensure that biodiversity is a priority for them. The engagement process may require multiple meetings over time to monitor issuers’ progress in achieving their risk-reduction goals.

We have engaged on biodiversity risk with issuers in various client portfolios. These issuers include, for example, Linde, a UK-based supplier of industrial gases; US water-treatment company Ecolab; and Swiss processed foods group Nestlé (Display).

All fall in the top-right quadrant of the risk matrix. Linde ranks high for impact and moderate for dependency; Ecolab also ranks high for impact but higher than Linde for dependency. Nestlé ranks highest of the three on both counts. Below, we use Linde and Ecolab to illustrate how we engage on water-related risks and Nestlé on deforestation-related risks.

The process begins with defining the objective of the engagement. In the case of Linde, we wanted to know the water-risk implications of its hydrogen production—especially its move to producing green hydrogen. Traditional hydrogen production uses steam methane reforming, in which steam reacts with methane to produce hydrogen. Green hydrogen, which is powered by renewables, uses an electric current to split water into hydrogen and oxygen. Both processes are water intensive.

When engaging with Linde, we noted that it had reported considerable water savings, but its steam consumption had increased. The company explained that this had been possible because of a move to closed-loop production processes in which steam is fed back into the production cycle. It planned to use a similar technique to conserve water when producing green hydrogen. We asked Linde to consider introducing a company-wide water-usage target, and it said it planned to do so soon.

With Ecolab, we wanted an update on its effort to help customers conserve water and how it might be affected by plans to service water-hungry AI data centers. While the company had made considerable progress with conservation (226 billion gallons out of a 300 billion target), it noted that further gains were being complicated by increased water demand. But the expansion of data centers and utilities to power them was also creating opportunities for new efficiencies in energy and water supply, and the company was looking for commercial water-solution opportunities across the AI value chain.

Our engagement with Nestlé on deforestation illustrates some of the challenges of risk mitigation and the value of monitoring progress. In 2010, the company aimed to eliminate deforestation from five key supply chains—palm oil, soy, meat, paper and sugar—by 2022. It progressed well except for palm oil, which is sourced from high-risk countries: deforestation in the chain had fallen only 70% by 2020. We tracked progress, and in 2021 the company, aided by satellite and field monitoring, had eliminated deforestation across 90% of the chain. Its next goal was to be deforestation-free in all supply chains by the end of 2025.

Not Just Risks, but Opportunities, Too

Biodiversity exposures are material risks for many portfolios and need to be addressed appropriately, in our view. Our framework—supported by specialist, third-party industry data—can show how these exposures are distributed across portfolios and identify issuers with high nature-related risks. Combined with fundamental research and, where appropriate, issuer engagement and stewardship, it can lead to a deep understanding of issuer- and portfolio-level risks and the actions needed to mitigate them.

But it’s not just about risk: it’s about opportunity, too. For example, our engagement with Linde improved our understanding of how green hydrogen—an important step in the move to a low-carbon economy—could be produced in a way that conserves water usage. And Ecolab helped us understand how the growth in AI data centers might lead to enhanced water and energy efficiencies and related commercial opportunities.

As part of a broad-based active investment strategy, the framework, in our view, can not only identify and mitigate nature-related risks in portfolios, but it may help unlock better returns, too.

¹ The analysis applied the framework to the client firm’s default investment offering for UK defined contribution (DC) pension savers to illustrate how the framework can surface biodiversity-related risks and highlight potential areas for deeper review. The results are provided for illustrative purposes only and are not intended as investment advice.

² The Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE) database is maintained by Global Canopy, the UN Environment Programme Finance Initiative and UN Environment Programme World Conservation Monitoring Centre.

³ Global Industry Classification Standard. Among the Standard’s various categories, the category “subindustries” provides the most granular classification of industries.

⁴ AB engages issuers where it believes the engagement is in the best interest of its clients.

The authors would like to thank Max Lulavy, Responsible Investing Research Analyst at AB, for his contributions to this article.
 

The views expressed herein do not constitute research, investment advice or trade recommendations, do not necessarily represent the views of all AB portfolio-management teams and are subject to change over time.

References to specific securities discussed are for illustrative purposes only and should not to be considered recommendations by AllianceBernstein L.P. It should not be assumed that investments in the securities mentioned have necessarily been or will necessarily be profitable.

The “target date” shown in a fund’s name refers to the approximate year when a pension scheme member expects to retire and begin withdrawing from his or her account. Target date funds gradually adjust their asset allocation, lowering risk as a member nears retirement. Investments in target date funds are not guaranteed against loss of principal at any time, and account values can be more or less than the original amount invested—including at the time of the fund’s target date. Also, investing in target date funds does not guarantee sufficient income in retirement.

MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein.

The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Learn more about AB’s approach to responsibility here.

What You Need to Know

Biodiversity risk is more nuanced and complex than many investors think. For instance, there’s a widespread belief that deforestation poses the biggest nature-related risk for most portfolios. But when we applied our proprietary biodiversity risk-assessment framework for a client, we found that water risk—not deforestation—was the portfolio’s biggest exposure. Our analysis of the MSCI AWCI Index using the same framework shows water risk is elevated for many companies, highlighting just how important it is to assess biodiversity risk accurately.

16%	35%	14%
of the MSCI ACWI is exposed to the highest level of biodiversity risk	the share of MSCI ACWI for which water risk is high or very high	the share of MSCI ACWI for which deforestation risk is high or very high

Authors

Sara Rosner| Director—Responsible Investing Research
David Hutchins, FIA| Portfolio Manager—Multi-Asset Solutions
Henry Smith, CFA| Investment Strategist—Multi-Asset Solutions

The importance of biodiversity as a nature-related risk in investors’ portfolios has become better understood in the past few years. Investors are beginning to appreciate how complex and nuanced biodiversity risk can be. For example, there’s a widespread assumption that deforestation is the biggest biodiversity risk in many portfolios. That’s understandable, given media attention around the topic, and because large-scale deforestation contributes to climate change, which can have a material impact on investments across the globe.

But such assumptions can fall short of reality. We recently analyzed the biodiversity risks in the equity allocations of a large UK pensions provider¹ and found that water stress, not deforestation, was the biggest risk (Display).

This may seem surprising, given that the impacts of water stress tend to be localized and not so obviously global as those of deforestation and its links to climate.

But this particular client is not an outlier. Our analysis of the ENCORE² industry biodiversity-risk database shows that the proportion of the MSCI ACWI Index for which water-related risk is high or very high is 35%—not very different from the client’s 31%. (The index also has a bigger exposure to high or very high deforestation risk—about 14%.) The insight underscores how important it is for investors and investment managers to analyze and identify their nature-related exposures correctly.

To that end, we have developed a proprietary risk-assessment framework that can identify nature-risk exposures across portfolios at the sub-industry level. In turn, this enables analysts to assess and engage with the potentially high-risk companies identified. We believe the framework may help reduce portfolio risk and unlock better returns.

Mapping Portfolio Biodiversity Risks

According to the Taskforce on Nature-related Financial Disclosures, nature-related risks are potential threats to an organization arising from dependency and impact on nature—the organization’s own, and those of society too. Dependency and impact are, respectively, physical and transition risks.

For example, fisheries that rely on water quality to sustain their fish stocks have a high dependency on nature, as they are exposed to the physical risk that water quality might deteriorate. Mining companies and property developers have a high impact on nature; as laws, regulations and trade practices change (transition) to reflect society’s growing awareness of biodiversity risk, they may become exposed to legal, reputational, market and other risks.

Using dependency, impact and related risks as a framework, we draw on the ENCORE database to map biodiversity risk exposure at the GICS³ subindustries level (Display).

The industries that fall in the upper right quadrant have both high dependency and impact and, therefore, the most nature-related risk. Our analysis shows that 15.7% of MSCI ACWI falls into this quadrant. For the equity portfolio in our client case study, the proportion is significantly lower, at nearly 10% (Display).

Understanding how dependency and impact risks are distributed across industries in a portfolio is a vital first step, but it’s also important to dive deeper to understand the risks at the issuer level. The ENCORE database lists risks individually and classifies them according to whether they are dependencies or impacts. Using this information, we can apply the framework to identify specific risks across a portfolio. This was how we discovered the extent to which the case-study portfolio’s biodiversity risks were dominated by water-related exposures (Display).

Most of these exposures fell in the dependencies category, but two of the top five impact exposures were also water-related—area of freshwater use, and emissions of toxic soil and water pollutants. This level of information is potentially helpful in deciding where to focus efforts to mitigate the portfolio’s biodiversity risks.

Having established which industries in a portfolio have the highest nature risk, we can identify individual holdings within those industries that we may wish to target for further research to understand which biodiversity risks are most material for them.

Company Engagements: Consistency and Comparability

For active portfolios managed by AB, this level of research may also lead us to engage⁴ directly with issuers to better understand their exposures and, if appropriate, work with them to help mitigate risks. We decide which issuers to engage with on a case-by-case basis, according to whether engagement is in clients’ best interests. When undertaking an engagement for clients whose strategy is implemented mostly with third-party funds, we partner with appointed managers to ensure that biodiversity is a priority for them. The engagement process may require multiple meetings over time to monitor issuers’ progress in achieving their risk-reduction goals.

We have engaged on biodiversity risk with issuers in various client portfolios. These issuers include, for example, Linde, a UK-based supplier of industrial gases; US water-treatment company Ecolab; and Swiss processed foods group Nestlé (Display).

All fall in the top-right quadrant of the risk matrix. Linde ranks high for impact and moderate for dependency; Ecolab also ranks high for impact but higher than Linde for dependency. Nestlé ranks highest of the three on both counts. Below, we use Linde and Ecolab to illustrate how we engage on water-related risks and Nestlé on deforestation-related risks.

The process begins with defining the objective of the engagement. In the case of Linde, we wanted to know the water-risk implications of its hydrogen production—especially its move to producing green hydrogen. Traditional hydrogen production uses steam methane reforming, in which steam reacts with methane to produce hydrogen. Green hydrogen, which is powered by renewables, uses an electric current to split water into hydrogen and oxygen. Both processes are water intensive.

When engaging with Linde, we noted that it had reported considerable water savings, but its steam consumption had increased. The company explained that this had been possible because of a move to closed-loop production processes in which steam is fed back into the production cycle. It planned to use a similar technique to conserve water when producing green hydrogen. We asked Linde to consider introducing a company-wide water-usage target, and it said it planned to do so soon.

With Ecolab, we wanted an update on its effort to help customers conserve water and how it might be affected by plans to service water-hungry AI data centers. While the company had made considerable progress with conservation (226 billion gallons out of a 300 billion target), it noted that further gains were being complicated by increased water demand. But the expansion of data centers and utilities to power them was also creating opportunities for new efficiencies in energy and water supply, and the company was looking for commercial water-solution opportunities across the AI value chain.

Our engagement with Nestlé on deforestation illustrates some of the challenges of risk mitigation and the value of monitoring progress. In 2010, the company aimed to eliminate deforestation from five key supply chains—palm oil, soy, meat, paper and sugar—by 2022. It progressed well except for palm oil, which is sourced from high-risk countries: deforestation in the chain had fallen only 70% by 2020. We tracked progress, and in 2021 the company, aided by satellite and field monitoring, had eliminated deforestation across 90% of the chain. Its next goal was to be deforestation-free in all supply chains by the end of 2025.

Not Just Risks, but Opportunities, Too

Biodiversity exposures are material risks for many portfolios and need to be addressed appropriately, in our view. Our framework—supported by specialist, third-party industry data—can show how these exposures are distributed across portfolios and identify issuers with high nature-related risks. Combined with fundamental research and, where appropriate, issuer engagement and stewardship, it can lead to a deep understanding of issuer- and portfolio-level risks and the actions needed to mitigate them.

But it’s not just about risk: it’s about opportunity, too. For example, our engagement with Linde improved our understanding of how green hydrogen—an important step in the move to a low-carbon economy—could be produced in a way that conserves water usage. And Ecolab helped us understand how the growth in AI data centers might lead to enhanced water and energy efficiencies and related commercial opportunities.

As part of a broad-based active investment strategy, the framework, in our view, can not only identify and mitigate nature-related risks in portfolios, but it may help unlock better returns, too.

¹ The analysis applied the framework to the client firm’s default investment offering for UK defined contribution (DC) pension savers to illustrate how the framework can surface biodiversity-related risks and highlight potential areas for deeper review. The results are provided for illustrative purposes only and are not intended as investment advice.

² The Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE) database is maintained by Global Canopy, the UN Environment Programme Finance Initiative and UN Environment Programme World Conservation Monitoring Centre.

³ Global Industry Classification Standard. Among the Standard’s various categories, the category “subindustries” provides the most granular classification of industries.

⁴ AB engages issuers where it believes the engagement is in the best interest of its clients.

The authors would like to thank Max Lulavy, Responsible Investing Research Analyst at AB, for his contributions to this article.
 

The views expressed herein do not constitute research, investment advice or trade recommendations, do not necessarily represent the views of all AB portfolio-management teams and are subject to change over time.

References to specific securities discussed are for illustrative purposes only and should not to be considered recommendations by AllianceBernstein L.P. It should not be assumed that investments in the securities mentioned have necessarily been or will necessarily be profitable.

The “target date” shown in a fund’s name refers to the approximate year when a pension scheme member expects to retire and begin withdrawing from his or her account. Target date funds gradually adjust their asset allocation, lowering risk as a member nears retirement. Investments in target date funds are not guaranteed against loss of principal at any time, and account values can be more or less than the original amount invested—including at the time of the fund’s target date. Also, investing in target date funds does not guarantee sufficient income in retirement.

MSCI makes no express or implied warranties or representations, and shall have no liability whatsoever with respect to any MSCI data contained herein.

The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed or produced by MSCI.

Learn more about AB’s approach to responsibility here.

AMSTERDAM, HONG KONG, OAKLAND, Calif., February 4, 2026 /3BL/ – Cascale and Worldly today released Navigating Global Water Regulation: Implications for the Textile and Consumer Goods Sector, examining how intensifying water scarcity and tightening regulation are reshaping the operating environment for the apparel, textile, and wider consumer goods sector.

The analysis maps evolving water policy across key production regions in Asia, the European Union, and the United States. It connects regulatory developments to operational, financial, and reputational risks, and outlines how companies can strengthen resilience as water becomes a strategic business concern alongside climate and supply chain due diligence.

With the global apparel and textile industry consuming an estimated 93 billion cubic meters of water annually and contributing roughly 20 percent of global industrial wastewater, water regulation is accelerating in regions already facing acute stress. Governments are responding with stricter controls on water use, wastewater discharge, and pollution, particularly in major manufacturing hubs.

The report highlights significant regulatory momentum in China and Vietnam, continued but uneven enforcement across other Asian production countries, expanding disclosure requirements in the European Union, and regulatory uncertainty in the United States. Together, these trends underscore the need for companies to elevate water risk from a site-level issue to a governance and strategy priority.

“Preserving our planet’s freshwater supplies is a top priority — water is life. Across the globe, legislators are responding by introducing new regulations, and water is quickly becoming a defining constraint on how and where the industry can operate,” said Elisabeth von Reitzenstein, senior director of policy and public affairs at Cascale. “This analysis is designed to help companies move beyond reacting to individual laws and instead understand the bigger picture. When water risk is integrated into sourcing, governance, and performance management, it becomes possible to protect both business continuity and local communities.”

The report also outlines practical actions companies can take now, including mapping facilities in water-stressed basins, validating wastewater compliance, strengthening supplier data collection, and embedding water considerations into sourcing and contingency planning. These steps are increasingly critical as regulation shifts from focusing on efficiency alone toward source sustainability and foundational environmental performance.

“Water policy provides essential direction for where supply chain action matters most,” said JR Siegel, vice president of sustainability at Worldly. “Leading companies rely on Worldly’s standardized, decision-grade data to prioritize action at the facility level—strengthening risk management, investment decisions, and supply chain resilience ahead of disruption.”

Key Takeaways

• Water regulation is accelerating globally. Governments are strengthening controls on water use, wastewater discharge, and pollution, particularly in water-stressed production regions.
• Risk exposure is uneven but growing. Major apparel and textile hubs in Asia face tightening regulation and enforcement, while EU disclosure requirements expand and U.S. policy remains uncertain.
• Water is now a strategic business issue. Companies are moving from treating water as a site-level concern to integrating it into governance, sourcing, and risk management decisions.
• Data and standardization matter. Visibility into water use, wastewater management, and basin-level risk is essential to manage compliance, protect operations, and maintain credibility.
• Early action builds resilience. Companies that invest now in efficient, compliant, and transparent water management are better positioned as scarcity and regulation intensify.

The publication reflects Cascale and Worldly’s shared commitment to supporting the industry with credible, actionable insight. Cascale’s Higg Index tools, developed in collaboration with Worldly, in addition to Worldly’s comprehensive data and analytics platform, help connect evolving regulation to measurable performance improvement at scale.

As water scarcity intensifies and enforcement strengthens across regions, the report concludes that the cost of inaction — from production disruptions to reputational damage — is likely to exceed the investment required today. Proactive, verifiable water management is increasingly a strategic imperative for long-term resilience in the consumer goods industry.

ABOUT CASCALE

Cascale is the global nonprofit alliance empowering collaboration to drive equitable and restorative business practices in the consumer goods industry. Formerly known as the Sustainable Apparel Coalition, Cascale owns and develops the Higg Index, which is exclusively available on Worldly, the most comprehensive sustainability data and insights platform. Cascale unites over 300 retailers, brands, manufacturers, governments, academics, and NGO/nonprofit affiliates around the globe through one singular vision: To catalyze impact at scale and give back more than we take to the planet and its people.

LinkedIn | Instagram | Facebook | YouTube

ABOUT WORLDLY

Worldly is the leading sustainability and supply chain intelligence platform for the consumer goods industry. The company empowers brands, retailers, and manufacturers to turn verified primary data into insight and action across complex global supply chains.

Trusted by a network of more than 40,000 companies across apparel, footwear, home furnishings, and sporting goods, Worldly provides visibility into environmental and social performance, including carbon, water, chemicals, and labor, at the product, facility, and value-chain levels.

Built on industry-recognized standards, including Cascale’s Higg Index, Worldly translates raw data into actionable intelligence that helps organizations reduce risk, meet evolving regulatory requirements, and drive measurable progress over time.

www.worldly.io

AMSTERDAM, HONG KONG, OAKLAND, Calif., February 4, 2026 /3BL/ – Cascale and Worldly today released Navigating Global Water Regulation: Implications for the Textile and Consumer Goods Sector, examining how intensifying water scarcity and tightening regulation are reshaping the operating environment for the apparel, textile, and wider consumer goods sector.

The analysis maps evolving water policy across key production regions in Asia, the European Union, and the United States. It connects regulatory developments to operational, financial, and reputational risks, and outlines how companies can strengthen resilience as water becomes a strategic business concern alongside climate and supply chain due diligence.

With the global apparel and textile industry consuming an estimated 93 billion cubic meters of water annually and contributing roughly 20 percent of global industrial wastewater, water regulation is accelerating in regions already facing acute stress. Governments are responding with stricter controls on water use, wastewater discharge, and pollution, particularly in major manufacturing hubs.

The report highlights significant regulatory momentum in China and Vietnam, continued but uneven enforcement across other Asian production countries, expanding disclosure requirements in the European Union, and regulatory uncertainty in the United States. Together, these trends underscore the need for companies to elevate water risk from a site-level issue to a governance and strategy priority.

“Preserving our planet’s freshwater supplies is a top priority — water is life. Across the globe, legislators are responding by introducing new regulations, and water is quickly becoming a defining constraint on how and where the industry can operate,” said Elisabeth von Reitzenstein, senior director of policy and public affairs at Cascale. “This analysis is designed to help companies move beyond reacting to individual laws and instead understand the bigger picture. When water risk is integrated into sourcing, governance, and performance management, it becomes possible to protect both business continuity and local communities.”

The report also outlines practical actions companies can take now, including mapping facilities in water-stressed basins, validating wastewater compliance, strengthening supplier data collection, and embedding water considerations into sourcing and contingency planning. These steps are increasingly critical as regulation shifts from focusing on efficiency alone toward source sustainability and foundational environmental performance.

“Water policy provides essential direction for where supply chain action matters most,” said JR Siegel, vice president of sustainability at Worldly. “Leading companies rely on Worldly’s standardized, decision-grade data to prioritize action at the facility level—strengthening risk management, investment decisions, and supply chain resilience ahead of disruption.”

Key Takeaways

• Water regulation is accelerating globally. Governments are strengthening controls on water use, wastewater discharge, and pollution, particularly in water-stressed production regions.
• Risk exposure is uneven but growing. Major apparel and textile hubs in Asia face tightening regulation and enforcement, while EU disclosure requirements expand and U.S. policy remains uncertain.
• Water is now a strategic business issue. Companies are moving from treating water as a site-level concern to integrating it into governance, sourcing, and risk management decisions.
• Data and standardization matter. Visibility into water use, wastewater management, and basin-level risk is essential to manage compliance, protect operations, and maintain credibility.
• Early action builds resilience. Companies that invest now in efficient, compliant, and transparent water management are better positioned as scarcity and regulation intensify.

The publication reflects Cascale and Worldly’s shared commitment to supporting the industry with credible, actionable insight. Cascale’s Higg Index tools, developed in collaboration with Worldly, in addition to Worldly’s comprehensive data and analytics platform, help connect evolving regulation to measurable performance improvement at scale.

As water scarcity intensifies and enforcement strengthens across regions, the report concludes that the cost of inaction — from production disruptions to reputational damage — is likely to exceed the investment required today. Proactive, verifiable water management is increasingly a strategic imperative for long-term resilience in the consumer goods industry.

ABOUT CASCALE

Cascale is the global nonprofit alliance empowering collaboration to drive equitable and restorative business practices in the consumer goods industry. Formerly known as the Sustainable Apparel Coalition, Cascale owns and develops the Higg Index, which is exclusively available on Worldly, the most comprehensive sustainability data and insights platform. Cascale unites over 300 retailers, brands, manufacturers, governments, academics, and NGO/nonprofit affiliates around the globe through one singular vision: To catalyze impact at scale and give back more than we take to the planet and its people.

LinkedIn | Instagram | Facebook | YouTube

ABOUT WORLDLY

Worldly is the leading sustainability and supply chain intelligence platform for the consumer goods industry. The company empowers brands, retailers, and manufacturers to turn verified primary data into insight and action across complex global supply chains.

Trusted by a network of more than 40,000 companies across apparel, footwear, home furnishings, and sporting goods, Worldly provides visibility into environmental and social performance, including carbon, water, chemicals, and labor, at the product, facility, and value-chain levels.

Built on industry-recognized standards, including Cascale’s Higg Index, Worldly translates raw data into actionable intelligence that helps organizations reduce risk, meet evolving regulatory requirements, and drive measurable progress over time.

www.worldly.io