Too much or too little water is a problem; water quality matters as well. We highlight what issuers in Chile and Mexico (the "thirsty" countries in Latam) are disclosing, and the link between water scarcity and potential stranded assets in power generation. Social unrest and major disruptions to economic activity come to mind in extreme scenarios, but additional energy and water-related costs are likely in milder scenarios. Investors should ask issuers about direct and indirect exposure to thermal energy, and what they are doing to manage scenarios with too much or too little water. We looked at water questionnaires from CDP.
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