With the world’s water supply in crisis, companies are increasingly recognizing the threats that they face from too little water, too much water, or polluted water, and how climate change is compounding these threats. Yet, there is a two-way interaction between the private sector and freshwater—industry affects water resources, just as water resources affect industry. Research and companies’ disclosures underscore the financial impacts that companies are already experiencing or are exposed to, and the impacts industry’s practices are causing for society.
While companies have used a variety of ways to quantify the financial value of water for their businesses, these approaches have typically focused on risks or damage costs, rather than the value that could be gained from taking action.
This brief introduces a framework to estimate both costs and benefits of engaging in water stewardship, enabling companies and investors to gain a more complete financial picture, better understand the full value of water, and prioritize action where it matters the most, to the business and to society.
By incorporating the full value of water into decision-making and understanding the cost of implementing solutions, as well as the resulting business and societal benefits, companies and investors can strengthen the business case for action and better identify where and how their investments can have the greatest impact.
This brief is a continuation of the work of the Valuing Water Finance Initiative, a global investor-led effort to engage companies with a high water footprint to value and act on water as a financial risk.