Rethinking the Value and Risks of Water for the Private Sector
Aug 24, 2015
WWF & International Finance Corporation
What is the true value of water? What risks does water pose for the private sector? Why do various groups see the value of water differently, and how can these views be reconciled? These are some of the critical questions addressed by a new WWF discussion paper produced with support from IFC.
According to the report, The Value of Water: A Framework for Understanding Water Valuation, Risk and Stewardship, companies that do not account for the value of water are more likely to make bad investment choices – affecting shareholders, communities, and the environment. It found there was no comprehensive water valuation tool in wide use among the business community, meaning decisions are often made with inadequate information. The report suggests a framework to help companies assess the value of water in a tangible way.
It makes several recommendations to corporate leaders, such as:
Considering the value of water to different audiences and the impacts on public assets using platforms such as the Natural Capital Protocol
Conducting water risk assessments for their company’s operations portfolio
Including water-related value in balance sheets, income statements, and annual reports
Sharing with investors how water risk assessments can help maximize profitability
Such analysis can help companies make informed decisions about the value of water to their operations and assets, much like Financial Valuation Tool that helps companies choose the optimal set of sustainability investments for their circumstances. The full report is available on the WWF website and will be presented at a session on Revealing the Value of Water during World Water Week in Stockholm.