How An ‘Internal Water Price’ Helps Companies Make Better Decisions

Setting an internal price focused on the true value of water helps leaders better understand and manage risk.

July 13, 2022
Glass sphere on a beach at sunset

Too often, water is seen as a low-cost commodity—and not the precious resource vital to life and business that it is. This mismatch is due in part to how much organizations pay for the water they use. The end price of water is often undervalued and divorced from local realities, meaning it does not adequately account for scarcity or quality concerns. In fact, water can be relatively inexpensive in areas that are highly water stressed. If left unaddressed, this underappreciation of water exposes organizations to a host of risks.

A recent article in GreenBiz—which includes the perspective of Emilio Tenuta, Ecolab’s senior vice president and chief sustainability officer—explains why companies need to take initiative to put their own price on water that reflects its true value. The article notes that this “internal water price” makes it easier for companies to factor water into its decision-making for a more accurate picture of risk, which leads to better outcomes for business and the environment.

Tenuta notes in the article that this nuanced water pricing structure builds on the more familiar concept of carbon pricing, making the case that a water price more “fully reflects the human health, environment and biodiversity issues associated with water scarcity and quality issues along with the future energy treatment costs.”

To help companies understand water risks and inform an internal water price, Ecolab developed the Smart Water Navigator, a free online tool that delivers an automated analysis of water use to enable informed, context-based goals that consider the water basin health within the community. The Ecolab Smart Water Navigator, first introduced in 2019, supports Ecolab’s broader mission to help industry reduce, reuse and recycle water to support resilient operations and healthy communities.

Considering that the world faces a 40% gap between global water supply and demand by 2030, as the article notes, businesses cannot afford inaction. Novel solutions such as an internal water price and tools like Ecolab’s Smart Water Navigator can help organizations make better decisions that consider water for what it is: our most precious resource.


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