Water underpins life and nearly all goods and services. It is an increasingly scarce resource due to overconsumption and pollution, putting business and economic growth at risk. Water is often underpriced, which makes it difficult for companies to invest in water efficiency improvements, even as the gap between demand and available supply continues to grow.
Natural capital valuation provides a way to value these water-related risks. A monetary risk estimate can help companies make the business case for investments in water stewardship and act to realize their growth ambitions, especially in water-stressed regions.
That’s why Trucost, part of S&P Dow Jones Indices, together with Ecolab and Microsoft, launched the Water Risk Monetizer - the first publically available global water risk assessment tool.
The tool is freely available to promote global water stewardship by demonstrating the financial materiality of water quality and resources to business. Making the tool freely available helps scale up use of natural capital accounting techniques by companies and helps Trucost and its collaborators demonstrate leadership in this area.
Microsoft is using the Water Risk Monetizer across its operations to prioritize sites for water management projects. These include data centers, which use a lot of water in their cooling systems.
For instance, Microsoft’s data center near San Antonio, Texas, USA, is located in a high water-stress region. The Water Risk Monetizer showed that the site’s risk adjusted water bill, representing the full value of water to Microsoft, is more than 11 times greater than the site’s current water bill.
Microsoft worked with Nalco, an Ecolab company, to develop a strategy to use recycled water at the site. This saves more than $140,000 in water costs per year, while also avoiding almost 60 million gallons of potable water per year.