Water risk can drown industry profits according to natural capital specialist

Financial risk associated with water supply can be greater than the entire profit margin in the global food and drink sector and top 40% of utilities’ earnings according to water risk assessment software has shown produced by water technology firm Ecolab in partnership with environmental, social and governance analysts, S&P Dow Jones Indices natural capital subsidiary Trucost.

Illustrative figures (pictured) produced using the Water Risk Monetiser technology demonstrate how water risk can outstrip the actual price paid by an industry depending on its exposure to water scarcity and dependence on water. Its developers claimed that it enables businesses to “factor current and future water risks into decision making to help them understand the impact of water quantity and quality on their operations.”

Microsoft, whose cloud technology is used to host the Water Risk Monetizer has used it to to prioritise sites for water management projects, such as data centres, which use large quantities of water in their cooling systems.

A Microsoft data centre located in a high water-stress region near San Antonio, Texas was, according to Trucost revealed that the site’s risk-adjusted water bill, was more than 11 times greater than the site’s current water bill.

Microsoft, with Ecolab devised a scheme to use recycled water at the site to save some 300 million litres of potable water and US$140,000 in water costs each year.