True Cost of Water

Water lies at the heart of our global economy.

Over the next decades, projected population and economic growth levels will, locally, push the stress on water resources to the limit. Freshwater availability could become the main growth limitation factor for cities and industries.

The development of water footprint indicators, such as Veolia's Water Impact Index, has been necessary to get more insight into the vulnerability of an activity to water challenges. In the current economic context, decision-makers are looking at an even more pragmatic and straightforward metric: dollars.

The True Cost of Water, a tool developped by Veolia Water, combines traditional CAPEX and OPEX calculations with analysis of water risks and their financial implications.

The True Cost of Water tool takes into account:

• Direct water costs: Capital & Operational Expenditures of water infrastructures,
• Indirect water costs: existing costs that are usually not attributed to water, e.g. water-related legal costs,

• Financial implications of water risks: costs arising during the lifetime of a plant that were not anticipated

These elements are organized in four categories: operational such as water shortages; financial, such as increase in cost of capital; regulatory such as obligation to meet ecological status; and reputational such as temporary loss of license to operate.