Embodied Value of Water: An Approach to Uncover Product Portfolio Risk from Water

The paradigm for sustainable water management is changing radically. The Embodied Value of Water (EVW) captures the true value of water in enabling revenue creation i.e. for every unit of product, it is revenue generated per unit water consumption over its lifetime. It is specific to product segments for an industry.

At a macro-level, all national production has ‘embedded water content’ in end-products. Most industries recognize the economic reverberations when water supply risks manifest at a widespread scale. Even a decade back, India, Australia and the United States were recognized among the top 3 countries whose export earnings appeared to be vulnerable to water shortages.

For the industrial sector, pressure on water resources manifests through:

Underutilization of installed capacity
Curtailing of growth plans
Instances of operational shutdown

In the last 5-8 years, leading industry associations and manufacturers have acknowledged the interconnectedness and integral nature (incl. ‘value’) of water to a business’s core manufacturing operations, for example:

Cost of treatment of input water
Embodied cost of energy
Embodied cost of productivity (e.g. turn-around time for processes, quality of outputs)
Efficiency in materials recovery (e.g. chemicals, dyes, fibres)
Burden of effluent treatment (where mandatory)
Burden of water infrastructure & power consumption for transport, handling & storage
Capacity for growth & expansion with respect to water supply

EVW provides a platform for cross-industry collaboration on acquifier / basin-level interventions that will enable equitable sharing of costs, benefits & risks mitigation based on the value of water to an industry player, not just the volume or water footprint alone.

The Embodied Water of Value Framework was introduced in the Water as a Business Risk session at the 4th Annual CXO Summit of the Sustainable Business Leadership Forum.

As a demonstration, the framework has been applied to the beverage sector and the paper and pulp sector, as below:

Download the Discussion Paper (PDF)

If you would like to recieve updates on this conversation / report, or engage in industry convenings relating to Water as a Business Risk, please contact SO Market Access & Insights Team: mait@sustainabilityoutlook.in

Presented as part of the The 4th Annual CXO Summit of the Sustainable Business Leadership Forum.