This month I am compelled to stay on the topic of water's cost and value for several reasons. First, while discussions of the "full cost" or "true cost" of water are helpful, they do not capture the complexity of all of the issues related to the value of water. I also believe the human right to water needs to be part of this discussion.
When evaluating the impact of water-related risks on business value, companies will analyze and, if feasible, quantify regulatory and reputational risks. Once physical risks -- water quantity and quality -- are included, companies can get close to an understanding of their value at risk.
But what this evaluation does not include is a consideration of stakeholders, in terms of how they value water and the cultural and social values associated with water. Not only do stakeholders within a watershed care about how a company values water but stakeholders outside a watershed also can care.
Stakeholders care about water and very likely will value it differently from companies. They also can have different values and cultural norms regarding water.
Taking this further is the "human right to water" and how it relates to water pricing. Recent discussion in the media has left the impression that these two issues are in conflict. In fact, the pricing of water -- according to its value -- is not in conflict with the human right to water.
Next page: Background on the human right to water
Water pail image by LIU JIXING via Shutterstock.