The comprehensive worth of water spans economic, social, and environmental dimensions, yet it is frequently ignored in financial planning and policy decisions. n nPersistent underfunding, disjointed funding mechanisms, and minimal involvement from private investors hinder the development of water systems capable of delivering maximum societal benefit. n nEmerging analytical tools and strategic frameworks now allow stakeholders to assess water’s true worth, evaluate trade-offs, and direct capital toward initiatives with the greatest impact. n nA simple glass of water embodies far more than its physical volume suggests. It supports public health by preventing illness and sustaining human life. It enhances workforce productivity, as individuals who are well-hydrated perform better. It also underpins economic activity — nearly every sector, from farming to power generation, relies on consistent access to freshwater. n nWith climate instability rising and freshwater resources becoming scarcer, reassessing how we value and fund water systems is no longer a choice but a necessity for leadership across industries. n nThe upcoming 2026 UN Water Conference, co-hosted by Senegal and the United Arab Emirates, will serve as a key global platform to accelerate progress through coordinated efforts. n nWith only five years remaining to meet the Sustainable Development Goals, the event will emphasize how innovation and financial reform can reshape water infrastructure and advance SDG 6: ensuring availability and sustainable management of water and sanitation for all. n n“ n nRecognizing water’s full value is the first step to overcoming investment barriers. n n” n nThe hidden economic potential of water n nWater’s value goes well beyond what markets charge. It includes direct applications like drinking, farming, and industrial processes; indirect advantages such as natural filtration, flood prevention, and carbon capture; and non-material values linked to cultural identity and intergenerational security. n nIn 2021, the total use value of freshwater — combining direct and indirect benefits — was estimated at $58 trillion, equivalent to 60% of global gross domestic product (GDP). Indirect benefits, including ecosystem services, outweigh direct uses by a factor of seven, yet they are rarely reflected in traditional economic models. n nUnderinvestment remains a critical issue: in urban areas, approximately 40% of treated water is lost due to leaks. Enhancing efficiency across sectors could yield substantial economic and social returns. n nIn agriculture, which consumes about 70% of the world’s freshwater, better irrigation techniques and management strategies can improve livelihoods while strengthening food and water security. n nEquitable access must also be expanded: women and girls collectively spend 200 million hours daily collecting water, and households in informal settlements often pay up to ten times more per liter than those connected to piped networks. n nLinking valuation with financial strategy n nAccurately capturing water’s multidimensional value strengthens the argument for long-term, large-scale investment. Funding water systems isn’t merely about constructing pipes and treatment plants — it’s an investment in resilience, fairness, and future prosperity. n nHowever, current funding approaches are both fragmented and inadequate. According to data from the OECD and the UN, only 3.1% of global official development assistance — roughly $8.5 billion — was allocated to water supply and sanitation in 2022. n nPrivate sector engagement remains limited, accounting for less than 2% of total investment in the water sector. n nUnderstanding water’s full significance is essential to breaking down financial obstacles. Once its economic, social, and ecological roles are fully acknowledged, funding mechanisms must adapt accordingly. n nIntegrating this understanding into investment planning involves leveraging blended finance, aligning with climate funds, creating supportive incentives, strengthening institutions, and ensuring inclusive outcomes. n nThree perspectives to reveal water’s real worth n nRecognizing water’s value is just the beginning; the next phase involves measuring and applying that understanding in real-world decisions. n nVarious methodologies have emerged to make water’s contributions visible in policy and business choices — tools that quantify intangible benefits, guide allocation decisions, and promote shared responsibility. Each offers a unique perspective, and together they turn principles into practical action. n nGlobal Common Good Framework n nDeveloped by the Global Commission on the Economics of Water (GCEW), this framework treats water not just as a local utility but as part of a shared global resource. n nIt acknowledges that actions in one part of a river basin affect communities downstream and even influence global climate patterns. n nBy classifying water as a common good, the GCEW encourages collective stewardship and a shift from isolated local management to coordinated global action for water security. n n“ n nvaluing water is the foundation of water resilience; investment in water is the key to unlocking that value. n n” n nTotal Economic Valuation (TEV) n nThe TEV model accounts for all forms of water-related benefits, including direct usage, non-use values, and broader societal contributions such as flood mitigation, carbon storage, and cultural importance. n nA TEV analysis of Beyşehir Lake in Turkey placed its annual value at TRY 271 million, or 13% of the local sub-catchment’s GDP. The study revealed that municipal water use generated over nine times more value per cubic meter than agricultural irrigation, underscoring inefficiencies in current allocation practices. n nWater Value Framework n nCreated by BCG and Oceanwell, this framework helps decision-makers move beyond theoretical figures and make practical choices. It evaluates “total value,” reflecting water’s broad societal role, and “marginal value,” indicating the added benefit of each additional unit used. n nFor example, in Israel, the marginal value of desalinated water is approximately $4 per cubic meter, representing the economic damage avoided by averting shortages. This method clarifies where each unit of water delivers the highest return. n nLoading… n nThe Water Impact Assessment Tool n nLaunched at the 2025 World Economic Forum in Davos by The Economist with support from the Grundfos Foundation, this tool quantifies the societal gains from investing in safe water access and translates abstract values into measurable indicators. n nBy modeling improvements in health, economic output, and productivity, it enables governments, financiers, and organizations to evaluate water investments using clear, evidence-based metrics. The tool supports: n nData-driven decisions on infrastructure and policy. n nMeasuring impact for strategic water programs. n nPrioritizing high-impact actions, particularly in underserved areas. n nBy making water’s societal contributions tangible, the Water Impact Assessment Tool helps align governance and funding with sustainable water management goals. n nOther initiatives are also advancing water valuation: n nThe Valuing Water Initiative offers value mapping and systemic change tools to inform decision-making. n nThe Ceres Valuing Water Finance Initiative evaluates corporate water risks, sets stewardship standards, and engages firms to treat water as a financial concern. n nThe WWF Water Risk Filter enables organizations to identify and prioritize water-related risks across operations and supply chains. n nThese efforts go beyond technical fixes — they foster collaboration, transparency, and accountability in managing water’s true worth. n nA call to global leadership n
— News Original —nWater’s true value is overlooked. Financing innovation can helpn nWater’s full value is vast and multidimensional but these values are often overlooked in investment decisions. n nChronic underinvestment, fragmented financing and limited private sector participation prevent water systems from realizing their full economic, social and environmental potential. n nTools and frameworks are emerging to operationalize water valuation and help stakeholders measure water’s worth, guide trade-offs and prioritize high-impact investments. n nA single glass of water holds immense, often overlooked value. It represents health, preventing disease and sustaining life. It also represents productivity, as hydrated, healthy people work at their best. And it represents economic growth – every industry, from agriculture to energy, depends on reliable water supplies. n nAs climate volatility intensifies and freshwater scarcity grows, revaluing and re-financing water is no longer optional. It is a leadership imperative across every sector. n nThe 2026 UN Water Conference, co-hosted by the Republic of Senegal and the United Arab Emirates, will mark a significant global milestone in accelerating results through collective action. n nWith just five years left to achieve the Sustainable Development Goals, the conference will highlight the pivotal role of innovation and finance in transforming water systems and advancing SDG 6: ensure availability and sustainable management of water and sanitation for all. n n“ n nRecognizing water’s full value is the first step to overcoming investment barriers. n n” n nThe hidden wealth of water n nWater’s worth extends far beyond market prices, encompassing direct uses such as drinking, irrigation and industrial; indirect benefits such as purification, flood control and carbon sequestration; and non-use values tied to cultural heritage and future security. n nIn 2021, the total use value of freshwater – covering both direct and indirect uses – was estimated at $58 trillion or 60% of global gross domestic product (GDP). Indirect values, such as purification, flood mitigation and carbon sequestration, are seven times greater than direct uses, yet they remain largely absent from economic models. n nChronic underinvestment in water systems is evident in cities where about 40% of treated water is lost to leaks. Improving efficiency across all sectors can unlock significant economic and social value. n nIn agriculture, which accounts for roughly 70% of global freshwater use, improved irrigation and management practices can enhance livelihoods while safeguarding food and water security. n nExpanding equitable access remains essential: women and girls spend a collective 200 million hours each day collecting water and households in informal settlements pay up to 10 times more per litre than those with piped connections. n nValuation and financing water together n nCapturing water’s full value significantly strengthens the case for sustained wide-scale investment. Water financing is not just about building infrastructure – it’s about investing in resilience, equity and long-term prosperity. n nYet, current financing models are fragmented and insufficient. According to data from the Organisation for Economic Co-operation and Development and the United Nations, only 3.1% of total official development assistance worldwide, or approximately $8.5 billion, was directed toward water supply and sanitation in 2022. n nPrivate sector participation remains modest, estimated at less than 2% of total investment in the water sector. n nRecognizing water’s full value is the first step to overcoming investment barriers. When its economic, social and environmental importance is fully understood, financing systems must evolve to reflect that multidimensional worth. n nEmbedding this principle in investment strategies means mobilizing blended and flexible capital, integrating with climate funds, aligning incentives, building institutional capacity and ensuring equity. n n3 lenses for seeing water’s true value n nIf recognizing water’s value is the first step, the next is measuring and applying it in practice. n nOver time, diverse approaches have emerged to make water’s worth visible in decision-making – frameworks that quantify hidden benefits, tools that guide trade-offs and models that foster collective stewardship. Each offers a distinct lens and together they help translate principle into action. n nGlobal Common Good Framework n nThe Global Common Good Framework from the Global Commission on the Economics of Water (GCEW) takes a practical stance: water is not just a local utility but part of a global commons. n nTreating the hydrological cycle as shared recognizes that upstream actions affect downstream communities and even global climate systems. n nBy framing water as a common good, the GCEW shifts the focus from fragmented local management to collective responsibility for water security and resilience. n n“ n nvaluing water is the foundation of water resilience; investment in water is the key to unlocking that value. n n” n nTotal Economic Valuation (TEV) n nThe TEV framework captures the full spectrum of water benefits, including direct use, non-use and broader societal values such as flood protection, carbon storage and cultural significance. n nA TEV assessment of Beyşehir Lake in Turkey estimated its value at TRY 271 million, or 13% of the local sub-catchment’s GDP. The study found that water allocated to municipal uses, such as drinking and sanitation, delivered over nine times more value per cubic metre than irrigation, highlighting the cost of inefficient allocation. n nWater Value Framework n nThe Water Value Framework, developed by BCG and Oceanwell, helps leaders move beyond abstract numbers and make informed trade-offs. It considers “total value,” capturing water’s full societal role and “marginal value,” showing the additional benefit of each unit used. n nFor example, in Israel, the marginal value of desalinated water is estimated at around $4 per cubic metre, reflecting the economic losses avoided by preventing shortages. This approach clarifies allocation by highlighting where each drop delivers the greatest impact. n nLoading… n nThe role of the water impact assessment tool n nAt the 2025 World Economic Forum in Davos, Switzerland, The Economist, supported by the Grundfos Foundation, launched the Water Impact Assessment Tool, which quantifies the societal benefits of investing in safe water access and translates abstract values into actionable metrics. n nBy modelling economic, health and productivity gains, it helps governments, investors and other stakeholders understand the returns on water investments in clear, data-driven terms. The tool bridges valuation and financing by enabling: n nEvidence-based decision-making for infrastructure and policy. n nImpact measurement for strategic water programmes. n nPrioritization of high-impact interventions, especially in underserved regions. n nBy quantifying water’s societal benefits, the Water Impact Assessment Tool helps guide governance and investment decisions aligned with sustainable water management. n nThere are also several other initiatives helping to operationalize water valuation: n nThe Valuing Water Initiative provides value maps and systemic-change tools to guide decisions. n nThe Ceres Valuing Water Finance Initiative benchmarks corporate water risks, sets stewardship expectations and engages companies to treat water as a financial risk. n nThe WWF Water Risk Filter helps organizations assess and prioritize water-related risks across operations and value chains. n nThese tools go beyond technical solutions – they enable collaboration, transparency and accountability in managing the value of water. n nA call to global leadership